What happens when agencies are asked to do double the work with half the people? For contractors, it means new expectations, higher risks, and fewer resources on the government side. For acquisition teams, it means every decision carries more weight than ever.
On The Optimize Podcast, Erv Koehler, former Assistant Commissioner at GSA’s Federal Acquisition Service, joined Jeff Shapiro to talk candidly about the pressure on the federal workforce, the ripple effects for GovCon, and what contractors should prepare for as FAR reforms, AI, and consolidation collide.
Shrinking Workforce, Growing Expectations
The math is brutal: fewer acquisition professionals, more contracts to manage, and increasing compliance requirements. The system strains under the load.
“You’re asking people to do twice as much with half the workforce. Something’s going to give, and it’s usually creativity or speed.”
That shortage doesn’t just impact government staff, it impacts contractors directly. Solicitations take longer to release. Evaluations drag on. Feedback windows shrink.
For GovCon teams, this means higher stakes for every submission. One unclear sentence or compliance miss can sink a proposal. Contracting officers no longer have the bandwidth to “fix” messy narratives.
Jeff put it plainly:
“If your proposal makes the CO work harder, they’ll move on. They don’t have time to fix your story.”
Contractors must now anticipate stretched reviewers. They must deliver clarity, precision, and compliance upfront. Anything less risks rejection.
FAR 2.0: Simplification Meets Skepticism
The Federal Acquisition Regulation is undergoing its most significant rewrite in decades. Policymakers promise shorter sections, clearer instructions, and less bureaucratic clutter.
On paper, this is encouraging. Agencies could award contracts faster. Contractors could navigate solicitations with fewer headaches. Everyone could spend less time deciphering outdated rules.
But Erv remains skeptical. Simplification often breaks down when layered with agency-specific guidance. A rule that looks simple federally may balloon once individual departments add their interpretations.
“Simpler language doesn’t always mean simpler processes. Once agencies add their guidance, the workload can actually grow.”
For contractors, this creates uncertainty. Do you rely on the plain language of FAR 2.0? Or do you prepare for inevitable “clarifications” that complicate compliance again? The safest path is flexibility, build capacity to pivot quickly.
AI: Help or Headache?
Artificial intelligence promises speed. Agencies already experiment with AI tools for compliance reviews, data checks, and contract justifications. Contractors do the same for proposals.
The potential is real. AI can summarize complex regulations, flag gaps, and format sections faster than any junior analyst. Proposal teams can save hours.
But the risks are just as real. Hallucinations in legal filings prove AI still fabricates data. That can sink credibility.
“AI can summarize, check boxes, and crank out drafts. But if it hallucinates in a legal filing, you’re in trouble.”
AI should augment, not replace, GovCon expertise. Let AI draft a compliance matrix. But let humans frame the mission, capture the nuance, and build trust with evaluators.
The winning teams will use AI where it excels: structure, speed, and repetition. They will keep people where it matters most: judgment, strategy, and credibility.
What Contractors Should Do Next
Workforce shortages, FAR changes, and AI are not abstract issues. They affect proposals, pipelines, and profit margins right now. Contractors can respond in four clear ways:
- Submit cleaner proposals – Remove ambiguity, write concisely, and structure responses so contracting officers can read quickly.
- Anticipate government gaps – Expect delays and reduced feedback. Build redundancy into schedules and capture planning.
- Leverage expertise – If you lack in-house knowledge, use consultants, trainers, or external experts to avoid costly mistakes.
- Strengthen relationships – A trusted contracting officer can guide you through confusion faster than any regulation rewrite.
Scattershot pursuits are dead weight in this environment. Focus matters. Pick your agencies, know their pain points, and tailor every response. Precision wins when attention is scarce.
Listen for the Full Story
The GovCon landscape is changing under workforce pressure, regulatory reform, and the rise of AI. Erv Koehler and Jeff Shapiro cut through the noise and explain what these changes mean in practice, where contractors should adapt and how to prepare for what’s coming next.
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