Can a Smaller Federal Workforce Drive GSA Growth?

We know it is old news, but the Trump administration and his second term in office are turning some heads in the federal government. One of the core tenets of his 2024 campaign was shrinking government bloat, and he came in to do just that with his Department of Government Efficiency (DOGE), a not-so-thinly veiled hat tip to the popular memecoin Doge. So far, according to the official DOGE website, the program has saved an estimated $180 billion. 

Mass-encouraged resignations/early buyouts and reductions in workforce (RIFs) are seriously changing the landscape of the federal workforce and putting money back in the coffers. 

So, a shrinking federal workforce sounds like a step back, but could it lead to more efficiency and growth for the GSA? We think so. The way ahead is to take money from bloated budgets and redundant payroll and put it back into capital investments. Let’s talk about the potential wins (and pitfalls) of this strategy and where we think it might be headed. 

Understanding the Trend: A Smaller Federal Workforce

Before we talk about the smaller workforce, there are a couple of objective truths about how the political parties have traditionally campaigned and who they appeal to. 

The GOP has always campaigned on a broad, strong Department of Defense, while the Democratic Party generally runs on social justice and societal reform. This political cycle is no different, and the DoD certainly appears poised to grow this cycle. Recruiting numbers are excellent, and the aging infrastructure is on the docket for modernization, with aging airframes like the AV-8B Harrier and A-10 Warthog on their way out to make room for next-generation aircraft. 

What does that have to do with the workforce?

A lot. 

The federal workforce is huge, with nearly 2.3 million employees in the Executive Branch. While the overall goal for reductions is unclear (and the numbers will probably be in flux for a long time as this thing shakes out, court interventions, etc.), the intention is sharp with some estimates as high as a 75% reduction. 

The annual wages for the Executive Branch are over $211 billion, so cutting this workforce by ¾ yields savings of over $158 billion.  

Why the Federal Workforce is Shrinking

The federal workforce is notoriously bloated and has been common knowledge for a long time. Not that there aren’t areas where the workforce is too thin; this has been a point of conflict for many years. 

DOGE conducted considerable research and effort into the workforce, along with entire departments and agencies, to see where the money was going. The all-too-common response was layer after layer of bureaucracy. There are literally thousands (or even tens of thousands) of different silos throughout the government where “pork” gets stuffed away. 

These first few months were about trimming the fat off programs that had outgrown their original intentions many times over. 

Impact on Government Operations

Fewer people mean day-to-day operations, program management, and administrative capacity disruptions. Of course, some of that is by design: the idea now is to see what was necessary the whole time anyway. 

However, there is no question that some gaps and holes will be opened up in the process as this all shakes out. Since the intent was to cut through bureaucracy, we are far from seeing the real impacts of these policy shifts. 

Certainly, the immediate effect was to freeze workforce spending, see where the money was actually going, and see what those employees bring to the table. The longer-term goal of the Trump administration is to make federal employment much more competitive, to attract and retain top-tier talent in an environment that breeds excellence. 

GSA’s Role in Filling the Gap

So, where does the GSA fall into all of this? First off, the GSA is not immune to these cuts, either. The GSA is looking at a 63% RIF in its Public Building Service division. While this is significant, due to silos in the workplace this will not likely have much spillover into the rest of the operations. But here is a clearer breakdown on what could potentially happen:

Direct Impact on GSA Advantage

  • The RIFs mainly target the Public Buildings Service (PBS) and the Federal Acquisition Service (FAS), which comprise about 3/4 of GSA’s workforce.
  • PBS is focused on real estate and property management, FAS is responsible for procurement, and GSA Advantage.
  • RIFs have eliminated entire offices and significant staff reductions, with nearly 1,000 federal employees let go across the Office of the Chief Financial Officer, PBS, and tech teams, and some 2,100 deferred resignations. 
  • The agency is also consolidating its physical footprint, disposing of non-core real estate assets and shifting resources to “critical” functions.

Potential Impact on GSA Advantage

There is no mention of GSA Advantage being discontinued or directly impacted by the PBS RIFs. However, the scale of workforce reductions and organizational upheaval could have indirect effects:

  • Reduced support for procurement operations.
  • Slower response times or poorer customer service for agencies using GSA Advantage.
  • Delays in platform updates, maintenance or modernization if tech teams supporting FAS are also affected.

The agency will focus on statutory and “critical” work, which includes maintaining core procurement services like GSA Advantage.

GSA is committed to Core Services

GSA leadership has said they are committed to meeting the mission needs of their customer agencies, including through the consolidation and optimization of services.

They are prioritizing essential operations, so GSA Advantage, as a critical procurement platform, will continue to work, maybe with reduced support or slower innovation.

What Does the GSA Do?

For the sake of this article, we will only focus on the portions of the GSA that support the GSA Schedule, which is the Federal Acquisition Service, which we talked about in our article “Exploring Government Contracting Procurement with Greenwood Aerospace.”

GSA acquisition services were originally conceived to stockpile goods for emergency preparedness and then to acquire strategic materials for wartime use. The GSA retained a number of its functions for emergency preparedness until the Federal Emergency Management Agency took over the tasks and overall control for emergency preparedness in 1979.

GSA is still a top source of listing and distributing emergency response items like bottled water, but it is so much more. It is not only responsible for posting the position on sources like SAM.gov, but then the GSA Schedule is used to pre-screen vendors.

Growth Opportunities for GSA Vendors

If the government is shrinking, then how in the world can the opportunities be growing for vendors? There are a couple of different ways that we might see growth in these channels. 

More Contracted Services

There is still a lot of work to be done in the federal workplace, and numerous maintenance and support functions also need to be addressed. Think about IT updates and upgrades. Or structural improvements on aircraft. There are a million different things out there that can be contracted out, and they have been routinely. 

However, the key point is that short- and medium-term contracts can be far more cost-effective than maintaining a team of permanent federal employees for these projects. This is nothing new; the government has been doing this for years, but it may become more widespread than before. 

Private contractors and GSA vendors benefit from the shift—more RFQs, larger IDIQ contracts, and expanded long-term needs. A lot of the services that have been kept in-house in the government can be shifted to contracts, so vendors need to be ready for the shift.  

Strategic Advantage for Small Businesses

There are already protections to give equal and fair consideration for small business vendors that are minority-owned or otherwise socioeconomically disadvantaged, and the coming years can be a huge opportunity to focus on government service contracts. 

Again, there are no promises, but given the overall trend of continued workforce cuts in the federal government, there will be a slack that needs to be filled elsewhere. Since the mission load has not decreased, slack has to be picked up elsewhere. 

Challenges and Considerations

There is no guarantee that this experiment in staffing and government reduction will ultimately yield all upside. Any time administrative cuts this deep are made across the board, there will be growing pains as the government rebuilds, because make no mistake, that is what this is: a government-wide rebuilding effort. 

Over-reliance on Contracting

One of the biggest concerns, and one that has been in the foreground for many years anyway, is a chronic overreliance on contractors. Nowhere was this more evident than during Operations Enduring Freedom and Iraqi Freedom, when contractors filled a wide range of roles overseas, including many that arguably should have been reserved for the uniformed services. 

With so many holes to fill in the systems, it will almost certainly fall on contractors to pick up the slack in the short term and medium term. Still, the challenge is making sure it does not become a permanent fix, or that they get tasked for things that are clearly beyond their abilities and scope. 

Accountability and Oversight

Strong oversight mechanisms will become increasingly important as outsourcing grows. And the problem is that as the federal workforce continues to shrink, will we be available to monitor the expanding roles that contractors will inevitably take on? 

This will give you a great opportunity as a contractor if you did good work with minimal oversight, though. There will be a surge of vendors and contractors when it becomes apparent how understaffed the government is, but most of them will drop off when it becomes clear that their quality of work is subpar.

If your organization is not available to contract with the federal government and it is not on the horizon for whatever reason, talk to our team of professionals today about partnering with us to land contracts. We contract in a Prime and/or Subcontract role with the leaders in the aerospace industry, securing contracts with all branches of the DoD.

But our services don’t stop at the military branches; we also serve the largest defense contractors. We want to simplify your operations by filling your government, military, and associated defense contracts fast. There’s more to providing a good customer experience than just finding and shipping a part. 

Our customers work on some of the most sensitive projects and technologies globally. We take client anonymity seriously. If your contract requires anonymity, we get it. To facilitate complete client anonymity, we offer a secure bidding, procurement, and fulfillment environment so your transaction is done with no fanfare. Also, our proprietary software system, Greenwood Parts Procurement Intelligence Program (GPIQ), provides market intelligence to match the needs of federal buyers with the availability on the market. 

GSA’s Expanding Role in a Leaner Government

Parts of the GSA are shrinking along with the rest of the government, but that does not mean that the GSA itself is going to either shrink or become less important. It will remain the focal point for listing and procuring millions of items for other government agencies, as it has for many years. It will also continue to source and provide a fleet of approximately 250,000 vehicles for government employees and military personnel to use. 

As the federal workforce shrinks, these agencies will be even more important for continuing to provide services, especially by entering into service contracts with other agencies. 

So a smaller federal workforce doesn’t mean doing less; it means doing things differently and often more efficiently with the GSA at the center of that change.