by Bernie Kluger and Andrea Delgado
Federal agencies responsible for the management of public lands reduced their spending with vendors nationwide by $1.3 billion between 2024 and 2025. In western states the small business sector was acutely affected, losing $1.0 billion in federal revenue. Federal cuts in 2025 impacted a majority of the 6100 small businesses who provided critical services to federal public land agencies in 2024. Among these small businesses, 913 (14.8%) received no new work in 2025, according to a recent Prospect Partners and Hawk Eye Strategies analysis of federal contracting data.
Some of the largest changes in federal contract spending by the US Department of the Interior (DOI) and the USDA Forest Service (USFS) had a direct impact on wildland fire management investment. From 2024 to 2025, vendors experienced a $255 million decline in contract spending for primarily on-the-ground fire suppression work as the Trump administration moved federal dollars toward higher-cost private aviation and aerial firefighting contracts. Among vendors in western states, the total loss of revenue reached $400 million.
Table 1: Change in Spending ($M) by DOI and USFS on Contracted Services in Western States from 2024 to 2025 (Calendar Year)
The loss of federal contracts by local businesses in the West follows an order by the Secretary of the Interior in 2025 to transfer the entire national contracting workforce, totaling over 1000 employees, to the direct control of his office. Between 2024 and 2025, bureaus within the U.S. Department of the Interior (DOI) and USDA’s U.S. Forest Service (USFS) consolidated federal contracts into fewer firms and eliminated more than 300 federal contracting positions.
To better understand the impacts of changes to federal contracting investments by the agencies involved in the analysis, Prospect Partners and Hawk Eye Strategies reviewed public data from eleven Western states: Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming. Highlights for each state follow below.
THE BIGGEST LOSERS: COLORADO, NEW MEXICO, OREGON
Oregon, New Mexico and Colorado absorbed 81 percent of all contract reductions across the west, losing a combined $807 million out of the region’s total loss of $1 billion.
New Mexico:
- Contract spending by DOI and USFS with local businesses in New Mexico dropped by $262 million from 2024 to 2025, second only to Oregon.
- This decline was driven by decreases in wildfire-related spending (nearly $60 million reduction) and delays in water-related projects ($177 million reduction).
- More than half of New Mexico’s counties (17 of 33) experienced a reduction in the number of vendors doing business with the DOI and USFS in 2025.
Colorado
- Colorado-based businesses lost more than $189 million worth of contract spending with DOI and USFS in 2025.
- Colorado businesses that build and maintain infrastructure and facilities on public lands were hit especially hard, losing more than $67 million in business.
- Nearly half of Colorado’s counties (30 out of 64) experienced a reduction in the number of local vendors doing business with DOI and USFS between 2024 and 2025.
Oregon:
- Between 2024 and 2025, Oregon-based vendors lost more business with DOI and USFS than any other Western state, a $355 million decline.
- This drop was largely the result of contracting reductions from the USFS, which moved nearly $306 million away from Oregon-based vendors.
- Spending on frontline services in Oregon dropped across the board, but no other category even came close to the amount of money moved out of fire suppression: a reduction of more than $187 million.
- 31 of 33 counties in Oregon that had vendors doing contract work for DOI or USFS in 2024 experienced a reduction in the number of vendors doing business with the agencies in 2025.
LOSSES IN OTHER WESTERN STATES
Arizona: Arizona-based vendors saw contract spending with federal land management agencies drop by 28%, from $241.3 million in 2024 to $173.7 million in 2025, resulting in a loss of roughly $68 million and 96 fewer contractors.
Colorado: Colorado-based businesses lost more than $189 million worth of contracts with DOI and USFS in 2025, a decrease from $601.5 million in 2024 to $412.1 million in 2025. The number of contractors dropped by 110 over the same period.
Nevada: Vendors in the state of Nevada experienced a $43 million decrease in contract spending, a 30.3% drop from $142.2 million in 2024 to $99.1 million in 2025, and 9 fewer contractors.
New Mexico: Contract spending by DOI and USFS with local businesses in New Mexico dropped by $262 million (-68.9%), from $380.8 million in 2024 to $118.5 million in 2025, second only to Oregon.
Oregon: Oregon-based vendors lost more business with DOI and USFS than any other Western state, a $355 million decline (-30.8%) from $1,155.6 million in 2024 to $800.1 million in 2025, and 290 fewer contractors.
Utah: Utah-based vendors experienced a $7.9 million decline (-3.3%) in contract spending, from $241.0 million in 2024 to $233.0 million in 2025. Utah was the only Western state that gained contractors (8) while all others lost contracts.
Washington: Washington-based vendors lost $159.4 million (-33.7%) in contracting dollars in 2025, a drop from $473.5 million in 2024 to $314.1 million in 2025, combined with a loss of 94 contractors.
Wyoming: Wyoming-based vendors lost $3.2 million (-3.8%) in contracting dollars in 2025, a drop from $83.5 million in 2024 to $80.3 million in 2025, combined with 42 fewer contractors.
A MIXED STORY: CALIFORNIA, IDAHO AND MONTANA
California: California-based vendors experienced a $2.9 million increase in contract spending from federal land management agencies, with revenue rising from $948.9 million in 2024 to $951.8 million in 2025, but with 194 fewer California-based firms doing business with public land agencies in 2025. The net increase is attributable to a single project: $217.2 million in net contract obligations for work at Yosemite National Park funded prior to the 2024 presidential election.
Idaho: Idaho-based vendors experienced a modest increase of $5.8 million in contract spending, from $327.5 million in 2024 to $333.3 million in 2025, but with 60 fewer Idaho-based firms doing business with public land agencies in 2025. As with California, a single $45.5 million line item, a previously funded project at Yellowstone National Park, reversed what would otherwise have been a net decline in 2025 contract obligations.
Montana: Montana-based vendors experienced a $81 million increase in contract spending with federal land management agencies, from $495.8 million in 2024 to $576.8 million in 2025, even as total contractor counts fell by 61 vendors, suggesting fewer but larger awards. This 16.3% increase was driven by a Bureau of Reclamation project awarded to a company based in Bozeman, MT to rehabilitate the Sisk Dam in California’s San Joaquin Valley.
A complete report of findings is available for download on our website. Questions and feedback are always welcome. Contact us at media@prospectdc.com or through this link. We look forward to hearing from you.
Photo Credit: Historic postcard from Medford, OR, one of the communities hardest hit by spending cuts in 2025. Photo is the public domain and available for download at http://collections.carli.illinois.edu.
