FY2025 in Review: Key Takeaways and the Road Ahead for Federal Furniture Sales

Welcome back to Catalyst Conversations! In our latest session, Michelle Warren, along with Catalyst experts Ryan Hay and Dan Conaty, analyzed the close of Fiscal Year 2025 and looked ahead to the trends and opportunities defining FY2026. The good news? Despite a significant government shutdown, the federal furniture market is poised for stability and new growth, but vendors must adapt their strategies.

The FY2025 Data: Stability Despite a Slow Start

The immediate data from the end of FY2025 requires some context, as Ryan Hay pointed out: "These numbers are likely not accurate due to the shutdown". Government agencies were delayed in reporting final spending, skewing the preliminary totals.

• Federal Furniture Spend: Preliminary data showed total federal furniture spend down 23% to approximately $750 million. However, not everyone has reported sales and the sales reported have not been input into the reporting system.

• GSA Contract Sales: Year-over-year GSA reported sales for furniture are expected to remain stable. Hay believes "it looks like 2025 is going to be a flat year, to FY24, which is a positive”.

• The Unseen Spend: It is important to note that purchase card transactions are not included in the data on USA Spending - that data is solely contracts. If the purchase card sale was made against a GSA Contract, that information will be reported under contract sales and will show up in that captured data. On the other hand, VHA IDIQ Sales are not reported through GSA contracts. When issued as a contract, these sales will show up in the USA Spending report.

• The September Spike: The importance of year-end spending was visually clear in the data, with Ryan confirming: "September dwarfs everything else". This pattern confirms that vendors must be ready from the November start right up to the September 30th deadline.

FY2026: Agencies to Watch and Strategic Opportunities

With the government back up and running, several areas are showing significant funding and presenting clear opportunities for manufacturers and dealers.

• Top Spending Agencies: The Department of Defense (DOD) continues to lead, with Hay noting: "With DoD, especially Navy, we have seen a lot of money funneled that way". The Navy, Department of Homeland Security (DHS), the courts, and the Department of Energy are all expected to be significant spenders in the new fiscal year.

• IDIQ "Sweet Spot": The Department of Veterans Affairs (VA) IDIQ is projected to exceed $100 million again.

• Large-Scale Activity: Even during the shutdown, major contracts were moving. Warren highlighted: "we've seen a lot of large BPAs come out, like PTO, USDA, the large GSA, IDIQ, so there's been a lot of activity already, even though the government was shut down".

Key Trends to Follow

The discussion identified two major trends that will redefine engagement with the public sector: personnel changes and government goals.

1. Navigating Personnel Attrition and Change

With a significant number of experienced government specifiers and designers retiring, new decision-makers are taking over. Dan Conaty sees this as a chance for vendors to reset their relationships and become trusted experts:

"Just think of it as an ample opportunity to find out who the new decision makers are, and what BPAs and instruments are they going to be using to drive that business, and guess what? Let's be in there early to drive the specifications and the education around how to utilize these contracts".

2. Increased Focus on Set-Asides

Vendors should also pay close attention to the government's push to meet small business goals. Michelle Warren noted a clear increase in one specific category: "they said they had seen a tremendous increase in HubZone set-asides and sole sources". This suggests that prioritizing partners with specific socioeconomic status will be critical for a strong public sector strategy.

3. Don't Hesitate to Bid

Ryan Hay stressed that manufacturers need to be aggressive in bidding on large RFQs, even if they don't expect to win the entire project, simply to ensure they are part of the conversation:

"You want to make sure that you're putting your best foot forward and bidding on them, getting involved with them as much as you can, even if it's just for one of your products, getting it on there, getting a foot in the door, because you don't want to be left behind".

Conclusion and Next Steps

The outlook for the federal furniture market remains one of stability and opportunity, driven by key agency spending, strategic contract maneuvers, and the ability of manufacturers to engage with a new generation of specifiers. Thank you to Ryan Hay and Dan Conaty for providing their market-leading insights.