A major shift in federal procurement is underway, and if your business sells to the government, you need to pay close attention.
On July 18, 2025, the Office of Management and Budget released Memo M-25-31, titled Consolidating Federal Procurement Activities. This memo signals one of the biggest moves toward centralized government buying in recent history. It changes how billions of dollars in contracts are awarded, and small businesses have a real opportunity to get ahead.
GSA First Starting Now
The memo makes it clear that federal agencies must use existing General Services Administration or other governmentwide contracts before launching their own. If agencies want to go outside those channels, they must formally justify their decision.
This requirement is being added to the Federal Acquisition Regulation section 8.004. The 60-day implementation window started on July 18, 2025, which means agencies must comply by September 16, 2025. After that date, the GSA Schedule will no longer be optional but the default starting point for federal buying.
If your business is not already on the GSA Schedule, you will be competing from the outside, while contracts get streamlined through centralized purchasing vehicles you are not listed in.
Centralized Buying Means Fewer Barriers for Vendors in the System
The GSA is taking on a much larger role as the government’s procurement hub. Agencies have 60 days from the memo date to submit plans outlining which procurement functions they will hand off to the GSA. Then, within 90 days from the memo date, the GSA will release a governmentwide implementation plan.
Meanwhile, the GSA is working with federal category managers to consolidate high-spend areas, such as information technology, facilities, office supplies, and more. This means fewer one-off contracts and more bulk awards, especially through GSA Schedules.
For small businesses, this is a moment of leverage. If you are already in the system, you are first in line. If you are not, you risk being shut out to these streamlined deals.
What is Driving This Acceleration
This is not just a policy; it is execution. In the first 100 days of the current administration, GSA leadership has already made bold moves that impact the entire acquisition ecosystem.
Here are the most relevant outcomes for small businesses:
- Termination of 9.400 governmentwide contracts, generating $30 billion in savings
- Reduction of $313 million in internal spending by canceling 185 contracts
- Closure of 595 vacant or underutilized leases, eliminating $298 million in future obligations
- A 35% reduction in software costs across the agency
- Sale of 15 federal buildings, avoiding $47 million in deferred maintenance
- Suspension of 470,000 government-issued credit cards to reduce fraud and waste
On procurement reform, GSA:
- Launch of a government wide procurement consolidation effort, with agencies like SBA and OPM already onboarded
- Federal fleet consolidation to eliminate redundancy and reduce costs
- Rewrite of the Federal Acquisition Regulation in partnership with OMB, DoD, and NASA
- Creation of the OneGov Strategy to modernize government buying and improve commercial engagement
- Implementation of stricter controls around consulting contracts, requiring agencies to justify external spend and opening opportunities for performance-based vendors
These changes focus on outcomes rather than red tape, and open the door to faster, more transparent contract awards.
Why This Matters for Small Businesses
If you are already on a GSA Schedule, you are in a prime position to benefit from this consolidation. Agencies will buy through your contract more often and more easily.
If you are not yet on a GSA Schedule, time is not on your side. Every day you remain outside the system is a day where contracts are awarded without you in the running.
This is the moment to act:
- Prepare your qualifications
- Get aligned with the GSA’s acquisition priorities.
- Partner with FAMR to guide you through the registration and schedule process quickly and correctly
The rules are changing, but that does not mean you have to lose out. FAMR is here to help you adapt, get qualified, and stay competitive.
OMB Memo M-25-31 is a new policy directive issued on July 18, 2025, that requires federal agencies to prioritize using existing government-wide contracts, like the GSA Schedules, for their procurement needs. This is also known as the “GSA First” policy.
While not legally required for all transactions, this policy makes it practically necessary for sustained success. Agencies must now justify not using a GSA Schedule, making it the primary path for most federal contracts.
The process can take several months, depending on the complexity of your offer and GSA’s review times. Given the September 16, 2025 compliance deadline, it is crucial to start the application process immediately.
This change is a major opportunity for small businesses that hold a GSA Schedule. It provides a direct path to federal buyers and levels the playing field with larger competitors within the GSA system. Many GSA contracts are set aside specifically for small businesses.
