Chris Crowder, GovCon Business Unit Leader,Unanet Thriving in today’s challenging market starts with a mature AI program, new GAUGE benchmarking report for GovCons finds
What qualities enable a government contracting firm to thrive in the face of heightened procurement pressure, mounting and rapidly shifting regulatory requirements, deep market uncertainty, profound technological change and other destabilizing forces?
In findings from the forthcoming (and 10th annual) GAUGE benchmarking report from Unanet and CohnReznick (click
here to access the report free of charge), one attribute in particular stands out for its ability to help government contractors navigate the headwinds they’re encountering in 2026. That attribute is maturity in the deployment of artificial intelligence.
Based on a survey of about 1,200 GovCon executives and leaders, this year’s GAUGE report finds that AI-mature firms (those that have integrated AI into their business operations, along with policies and controls) are outperforming their less AI-mature counterparts in key areas like win rate and profit. These companies more frequently report win rates above 50% on new business pursuits and enjoy profit margins exceeding 10%, well above the industry averages of 39% and 7.6%, respectively.
AI as Force Multiplier
Not surprisingly given the correlation between firm performance and AI maturity, AI usage has increased significantly among GovCon firms, with 70% indicating they use it in some capacity here in 2026, up from 54% in 2025 and 33% two years ago. What’s more, about three-quarters (74%) of respondents believe AI and process automation will do more to transform government contracting than any other force on the horizon. Today firms are employing AI most frequently for business development and marketing functions. They’re also relying increasingly on AI for compliance, with more than one-third (36%) of firms now actively using it for that purpose, up sharply from 14% last year.
All of which highlights a growing gap between firms with mature AI and data-usage programs and those without. As the latest GAUGE report findings underscore, firms that invest in AI maturity and connected, structured data are pulling away from the field. They’re winning more contracts, earning stronger margins and generally putting themselves in better position to succeed.
There’s an important qualifier regarding AI usage among GovCon firms, however, and that’s the extent to which firms take measures to govern their AI implementations with formal policies and procedures. While the 36% of firms that say they use AI with formal policies and procedures in place is up significantly from 12% in 2024, it highlights an important and potentially perilous disconnect in which many firms are adopting AI capabilities without adequate guardrails in place. That’s a critical consideration for GovCon firms and their CIOs. A lack of governance and support for AI not only can undermine AI investments, it can also cast doubt on the outputs AI produces for a firm and its government customers.
Another Major Differentiator: Operational Maturity
The 2026 GAUGE Report reveals a range of other key factors that separate top-performing government contracting firms from the crowd. One is operational maturity. That shows up in the project management office (PMO). More than half (57%) of GovCon execs rate their PMO function as mature; 43% say there’s room for improvement; and just 10% say their PMO is fully optimized.
Here’s another area where CIOs have an opportunity to make a big impact by arming their companies with better digital tools and foundations, connected core systems (customer relationship management, enterprise resource planning, etc.) to enable data-driven decision-making and on-point forecasting, and integrated project and workforce visibility. Today, 86% of firms lack a unified platform that connects these systems and the offices that use it, including PMO, business development and the C-suite.
Win-rate is another sign of operational maturity. What’s clear in our GAUGE findings this year is that firms with higher win rates tend to be:
• Less affected by procurement slowdowns.
• Better able to avoid workforce reductions.
• More focused on key issues like cybersecurity and human capital strategy.
In fact, landing new government contracts is the most concerning operational issue for GovCon firms, followed by winning pricing strategies.
