For those of us in the architecture, engineering, and construction (AEC), the challenges associated with working on federal government contracts have never been greater. A perfect storm of decreasing federal staffing, unpredictable tariffs driving up construction costs, and the critical rollout of the Cybersecurity Maturity Model Certification (CMMC) has created an environment of uncertainty and tension.
Yet, within these challenges lies an opportunity. With the right preparation and a strategic approach, AEC contractors can emerge stronger, more efficient, and better equipped to serve FedGov clients. This article explores the key headwinds AEC projects face and actionable steps to help the industry weather the storm.
The Challenges Facing AEC Professionals In FedGov
Federal Staffing Reductions
Federal agencies have been hit hard by layoffs and staffing cuts. According to the Partnership for Public Service, federal employment shrank by 8% from 2018 to 2022, while the New York Times reports that federal agencies could see another 12% reduction of the civilian workforce in 2025 alone. Operating on reduced resources is expected to directly impact the speed of project approvals, communication with contractors, and the overall efficiency of project management within federal government contracts.
The shake-up within the federal government is expected to create a ripple effect throughout the AEC industry. Agency staffing reductions are expected to limit AEC contractors’ access to vital project information and add administrative burden upon contractors, ultimately leading to project delays. This challenging environment demands proactive communication and modern, lean, processes to stay on schedule.
Ever-Changing Tariffs
The construction industry is no stranger to economic shifts, but pricing increases over the last few years have been particularly steep. As of early 2025, construction input prices have risen by 40.5% compared to February 2020, according to the U.S. Bureau of Labor Statistics’ Producer Price Index. This substantial increase reflects the cumulative impact of various economic pressures over the past five years, but tariff volatility has been particularly disruptive. Changes in U.S.-China trade relations, steel and aluminum tariffs, and other geopolitical factors have sent material costs soaring even further.
These cost fluctuations complicate budgeting and bidding processes for AEC professionals working on federal projects. Fixed-price contracts, common in federal projects, leave little room for managing unforeseen increases in material costs. Creativity in sourcing and incorporating cost-saving technologies will become increasingly vital for companies to remain competitive.
Implementation of CMMC Compliance
Cybersecurity is no longer optional in federal projects. The Department of Defense’s (DoD) Cybersecurity Maturity Model Certification (CMMC) program introduces a new level of accountability for federal government contracting. Designed to protect sensitive data, CMMC requires all contractors interacting with DoD to demonstrate compliance with stringent cybersecurity standards.
This requirement represents a significant shift for AEC firms unaccustomed to implementing advanced cybersecurity protocols. Achieving compliance can be resource-intensive, requiring upgrades to technology systems, employee training, and comprehensive audits.
Preparing for the Future: Turning Challenges into Opportunities
While these headwinds are daunting, the AEC industry has the tools and talent to adapt. Here’s how firms can not only manage these challenges but thrive as they adapt to meet them.
Leverage Advanced Technology to Reduce Costs
There are strategies contractors can use to offset rising construction costs, but they require a willingness to adopt innovative new strategies. Building technologies, including fault-managed power systems, intelligent lighting, and fiber networks, have been around for several years but remain under-adopted due to the changes required in both design and installation. Yet leveraging these technologies can lead to both upfront and long-term operational cost savings.
For example, CRUX Solutions recently integrated fault-managed power into a one-million-square-foot building complex. This single change reduced the amount of material required throughout the project and simplified installation. This reliable power source also offers the potential to reduce operational energy costs over the lifecycle of the building.
As this example suggests, now is the time for AEC professionals to proactively investigate smart building solutions that deliver financial savings while improving performance and meeting sustainability goals.
Invest in Workforce Training and Development
Empowering your team with knowledge is a strategic advantage in today’s competitive landscape. By dedicating time to learning about emerging technologies and optimizing the use of existing tools, your staff can play a crucial role in driving down both construction and operating costs. A well-trained, adaptable workforce ensures your organization is prepared to meet evolving challenges and capitalize on new opportunities with confidence.
Leverage AIA-Accredited Learning Programs
AEC teams have many options for pursuing AIA-accredited learning programs. Selecting programs specifically designed to educate AEC professionals about the latest strategies and emerging technologies in the industry can be a significant differentiator. By participating in tailored courses, AEC organizations can stay ahead of the curve, improve project outcomes, and enhance overall efficiency. Investing in professional development ensures AEC teams are equipped with the expertise needed to innovate and excel in an ever-evolving market.
Promote Industry-Recognized Certifications
Encouraging your team to pursue industry-recognized certifications such as LEED, WELL, and SmartScore can provide your organization with a significant competitive edge. Because these certifications demonstrate a commitment to sustainability, health, and cutting-edge technology, they align federal projects with modern standards and client expectations. Not only do these credentials enhance the credibility of your workforce, they also open doors to new business opportunities by establishing an AEC company as a leader in innovation and quality.
Achieve CMMC Compliance Now
CMMC Certification can take organizations anywhere between six months to a year to complete. Don’t wait for the deadlines to start preparing for this imminent requirement. Begin your path to CMMC compliance today to ensure your team can confidently bid on federal projects without setbacks.
Think Beyond the “Usual”
With federal projects facing delays, AEC firms may need to consider a change. Private, local, and tribal opportunities may help firms sustain growth during uncertain times. These markets offer diverse projects where forward-thinking AEC firms can apply their FedGov expertise. Many of CRUX Solutions’ most successful engagements have been with tribal nations, where our intelligent building designs have delivered immense value.
CRUX Solutions: Prepared to Guide You Forward
The headwinds facing AEC professionals serving FedGov are strong – but with preparation, innovation, and the right resources, they’re manageable.
The challenges we face today aren’t new to us at CRUX Solutions. Over the past decade, we’ve worked on numerous federal government contracts, equipping us with the expertise needed to lead the way through this turbulent landscape. We offer AEC partners:
- RCDD-Certified Professionals: Our team includes top-tier experts in designing network infrastructures, electronic security, audio/visual systems, and smart building solutions.
- Proven Results: From VA hospitals to Air Force base upgrades, CRUX has brought efficiency and innovation to complex federal projects.
- Forward-Thinking: We stay ahead of industry trends, delivering solutions that reduce costs while enhancing performance.
If you’re ready to explore how CRUX Solutions and our credentialed experts can help you tackle your challenges and deliver smarter, forward-looking projects, contact us today. Whether it’s maintaining compliance with CMMC, integrating cost-saving technologies, or staying agile to adapt to federal staffing challenges, CRUX Solutions is here to help you find smarter, more efficient ways to build. Together, we’ll overcome these headwinds and chart a new course for success.