Women Contractors Face a Shifting Federal Landscape

Government contracting is changing fast in 2025, and women-owned businesses are caught in the middle of the shake-up. With the recent Executive Order 14173, federal agencies have been directed to review and even eliminate contract clauses tied to diversity, equity, inclusion, and accessibility (DEIA). That means programs many women entrepreneurs have leaned on, like Women-Owned Small Business (WOSB) set-asides, are now under scrutiny. Legal challenges and agency suspensions are adding to the uncertainty, leaving many asking what opportunities will remain.

This matters because progress has already been slow. In FY 2024, women-owned firms received just 3.44% of federal contracting dollars, falling short of the government’s 5% goal. This was a step back from FY 2022, when WOSBs received $26.2 billion in federal awards and helped the government meet its 5% target for the third year in a row. Without strong support, the gap could widen, making it even harder for women-led businesses to gain a foothold in industries where they are already underrepresented.

At the same time, EO 14173 is creating new compliance risks. Contractors must now certify they do not maintain certain DEI programs, with false certification carrying False Claims Act liability. Some provisions have already been temporarily blocked by a federal judge, leaving contractors navigating a gray zone between policy changes and pending litigation.

Yet, women leaders are responding with resilience. Many are shifting strategies, forming partnerships, pursuing broader contract vehicles, and doubling down on performance excellence to stay competitive. In industries like defense, construction, and IT—fields where women remain underrepresented despite being among the highest areas of federal spend, these strategies are especially critical.

Advocacy groups like the U.S. Women’s Chamber of Commerce are also rallying to ensure women’s voices are heard as policy debates unfold. Research shows that women leaders are also nearly twice as likely as men to mentor younger professionals, amplifying their impact beyond individual contracts and strengthening the broader small business ecosystem.

This moment is a reminder that leadership isn’t just about holding a contract; it’s about adapting to change, speaking up, and paving the way forward. As women contractors navigate this evolving landscape, their strength and vision continue to prove that they truly mean business.

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