Unanet and CohnReznick Release 10th Annual GAUGE Report, Revealing What Sets Winning Government Contractors Apart
Unanet, the leader in AI-first ERP and growth software for the government contracting (GovCon) industry, together with CohnReznick LLP, today released the 10th annual GAUGE Report, In It To Win It: Outthink, Outbid, Outlast. Widely recognized as the most comprehensive survey of its kind, the GAUGE arrives at a pivotal moment for the federal contracting community and delivers a clear message: the gap between AI-ready firms and the rest of the industry is widening quickly.
Against a backdrop of federal market volatility, the GAUGE reveals clear and measurable characteristics of successful GovCons. Specifically, AI-mature firms are outperforming key measures including win rates and net profit. These firms, which have integrated AI into their business operations, are generally winning more than 50% of their award pursuits and are reporting an average net profit margin of greater than 10%, compared to the reported average of 7.6%.
AI-mature firms are outperforming key measures including win rates and net profit.
This underscores why AI has become a priority for the 70% of GovCons using it (up from 33% just two years ago), and why 74% of industry professionals believe AI and process automation will do more to transform government contracting than any other force on the horizon.
Business development and marketing continue to be major drivers of AI adoption, but the technology is now gaining momentum across the broader enterprise. AI use for compliance is accelerating rapidly, with 36% of firms actively leveraging AI to improve compliance efficiencies – more than double last year’s 14% – signaling a growing shift toward organization-wide operational transformation. As GovCons continue modernizing CRM, ERP and project management systems, unified platforms that connect pipeline, projects, people and financials will help them unlock even greater value from AI through better visibility, smarter decisions and improved efficiency.
Beyond AI adoption, the report highlights an industry balancing resilience with rising pressure. Nearly two-thirds (65%) of contractors reported that 10% or fewer of their contracts had been canceled, modified, or descoped, despite widespread market disruption. Compliance readiness also remains strong, with 88% expressing confidence in their ability to successfully navigate an unexpected audit and nearly half of respondents identifying as CMMC Level 2. Together, these findings suggest compliance is no longer viewed as a back-office requirement, but as an operational and competitive advantage.
“Even in a tougher market, the firms that are staying focused, disciplined and willing to evolve are finding ways to grow,” said Kim Koster, Unanet GovCon expert and GAUGE co-author. “The companies pulling ahead are the ones using AI and better data to make smarter decisions, improve efficiency and stay agile. They’re positioning themselves to win through change.”
“For ten years, the GAUGE Report has helped GovCon leaders benchmark performance, identify emerging trends and make smarter strategic decisions in a constantly evolving market,” said Christine Williamson, GAUGE co-author and partner at CohnReznick. “This year’s findings highlight the resilience of the GovCon community and the significant opportunities ahead for firms embracing stronger operational practices, compliance readiness and AI-driven innovation.”
The 2026 GAUGE Report captures responses from 1,204 GovCon professionals across a broad range of company sizes and revenue bands, making it the largest edition in the report’s history. To learn more about Unanet for GovCon, the AI-first business platform connecting growth, delivery and finance, visit www.unanet.com.
