By Katie MacDonald
Opportunity knocks for members of Alabama’s defense sector. The U.S. Army Contracting Command at Redstone Arsenal awarded more than $34.2 billion in fiscal 2025 across nearly 14,000 contract actions, while the Army Engineering and Support Center in Huntsville completed another 3,500 contract actions totaling $2.9 billion, its highest annual contract commitment ever.
But an expanding market does not guarantee a larger share of the pie for every contractor in the state. These days, to win federal contracts, firms must prove their operational readiness. Those that can demonstrate they are ready to perform, not simply capable of performing, will be best positioned to carve out a thriving present and future in Alabama’s highly competitive defense sector.
New opportunities are part of that present, but so, too, are persistent labor constraints, more stringent cybersecurity and compliance requirements, tighter margins, and increased pressure to mobilize and deliver quickly. All these factors test a firm’s operational readiness — and its ability to win federal defense contracts.
What operational readiness means for defense contractors
Before the advent of new regulations like FAR 9.104, defense firms could win contracts based largely on their technical expertise. That’s no longer the case. Today agencies are evaluating firms on much more than their technical chops. They’re requiring prospective contractors to demonstrate adequate financial resources, the ability to meet performance schedules, a satisfactory performance record, and requisite organizational, accounting systems, operational controls, personnel, and technical skills.
Cybersecurity readiness also carries increasing weight in the calculus around award eligibility. Under current DFARS (Defense Federal Acquisition Regulation Supplement) requirements, contractors pursuing covered opportunities must specify their CMMC (Cybersecurity Maturity Model Certification) status in many solicitations.
Requirements like these are landing in an already challenging operating environment. According to the 10th annual GAUGE benchmarking report from
Unanet and CohnReznick (click here to access the report free of charge),
which is based on a survey of more than 1,200 government contracting executives, contractors typically forecast staffing needs only about four months into the future; one in eight struggles to forecast even one month. In terms of margins, meanwhile, firms report average profits of just 7.6%, with one-third operating at single-digit margins and 13% reporting losses.
Signs your firm is operationally ready
With so little room for error, operational readiness is emerging as a true differentiator in competing for federal projects. To be ready to capitalize on an expanding market for their services, contractors must be able to identify the best-fitting opportunities, make disciplined bid decisions, and understand whether the people, funding, partners, and infrastructure required to perform will be available. They also must be able to connect what their business development team is promising with what their operations and finance teams are contractually obligated to deliver. Any disconnect there can spell trouble for the firm and a specific project.
To win more new business, it’s also critical that firms demonstrate their readiness to defense agency contract decision-makers. To do so, they may need to detail:
- Named and available key personnel;
- Credible staffing and transition plans;
- Sufficient financial capacity;
- Reliable accounting and project controls;
- Current cybersecurity assessment status (Level 1 or Level 2 under CMMC, for example);
- Documented subcontractor oversight;
- The availability of audit-ready records; and, of course,
- Strong past performance.
Signals like these resonate with agencies come contract award time because they are perceived to reduce risk for the contracting agency. They send a strong message to agency decision-makers that they can trust a contractor to begin work quickly, protect sensitive information, manage taxpayer funds responsibly, meet delivery commitments, and address problems before they threaten the mission.
For Alabama’s defense contractors, deep technical knowledge and mission expertise still matter. But in the competition for new federal work, they can carry a firm only so far. Those who are best at instilling confidence that they’ll be operationally ready from Day One of a project are bound to rise to the top in a market flush with new opportunities.
To learn more about Unanet’s AI-first business and growth platforms and how they empower government contractors to capitalize on market opportunities and run their operations and projects more efficiently and profitably,
visit unanet.com.
About Katie MacDonald
Katie MacDonald is a Senior Product Marketing Manager for GovCon at Unanet, where they bring more than a decade of B2B marketing experience, including seven-plus years focused on government contractors. With an MBA in Operations and Supply Chain and a PhD in Psychology, Katie has led marketing and business development efforts across cybersecurity, infrastructure, IT/MSPs, and services. Known as a connector between executive vision, customer reality, and go-to-market teams, Katie specializes in clarifying complex stories, rebuilding foundational systems, and turning marketing programs into measurable pipeline and revenue.
