Federal Fatigue, State Momentum, and the Path Forward

After months of time, energy, and industry-wide anticipation, the HHS MAHA contract was canceled — a frustrating outcome for firms who invested heavily in the pursuit. While a revised version may be forthcoming, the broader sentiment across the industry is skepticism. This isn’t an isolated case. Across the federal landscape, we’re seeing:

• Fewer open competitions, with many agencies opting for closed or pre-qualified pools

• Contract consolidation and slower-moving recompetes, creating long windows of uncertainty

• De-scoping of active contracts, especially in health and human services, as budgets tighten and agencies prioritize speed over scale

That said, not all the news is bad. We've gone back and reviewed several years’ worth of federal contract activity in this market. While the tone on the ground might feel overwhelmingly negative, the data shows a more nuanced picture: Only 30–40% of contracts (by volume, not dollars) have actually been canceled. And while we do suspect some of the remaining contracts may not be exercised in the next fiscal year, the rest are still holding — for now.

So while it’s smart to stay cautious, there’s no need to panic.

Meanwhile, we’re seeing real momentum in the state market. We’ve been helping clients pivot into more active and accessible state-level opportunities — particularly in public health and outreach — and we have supported recent wins in California, Ohio, and Michigan. The investment is real, the procurements are moving, and it's one place to more readily parlay your federal experiences.