President-elect Donald Trump announced the creation of the Department of Government Efficiency (DOGE), to be led by Elon Musk and Vivek Ramaswamy. This initiative aims to cut excess regulations, eliminate wasteful expenditures, and restructure federal agencies. The project, described as a “Manhattan Project” for efficiency, plans to complete its work by July 4, 2026, aligning with the nation’s 250th anniversary. Musk previously estimated that $2 trillion could be trimmed from the federal budget, while Ramaswamy proposed drastic workforce reductions, such as firing 50% of federal employees:

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"On Day 1, *instantly* fire 50% of federal bureaucrats.

Here’s how: if your SSN ends in an odd number, you’re fired.

That downsizes government by half. Absolutely *nothing* will break as a result.

It doesn’t violate civil service rules because mass layoffs are exempt."

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Trump emphasized plans to address fraud, improper payments, and conduct a comprehensive audit of federal spending-- stating that DOGE will finish operations by no later than July 4th, 2026. However, this aggressive downsizing could significantly disrupt government contractors (GovCon) heavily reliant on federal budgets. 

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Companies like CACI, Leidos (LDOS), Booz Allen Hamilton (BAH), and SAIC may face substantial revenue losses as federal agency restructuring reduces contracting opportunities. The reduction in bureaucratic oversight and elimination of redundant projects may also lead to fewer contracts for intelligence, IT, health, and defense services, forcing these firms to adapt fast or risk decline.

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