22.5% of Federal Contracts Get Re-competed Away: Backtest of 9,872 Expired Awards

Incumbent displacement happens 1 in 4.4 re-competes. If you are targeting 20 re-competes in your pipeline this year, statistically you should expect to displace 4-5 incumbents. If you are winning none, you are either targeting the wrong contracts or your capture strategy is weak.

This overturns the "incumbent always wins" myth. That framing was probably true 15-20 years ago when re-competes were less common and agencies had more continuity pressure. In modern procurement — with recurring price realism reviews, OCI concerns, and small business set-aside rotations — displacement is the norm, not the exception.

We assign every federal contract a 0-100 vulnerability score based on 8 factors: bridge contract status, offer count on the original award, incumbent concentration, set-aside changes, days until end, and obligation trends. The correlation between score and displacement holds up in the backtest:

The relationship is monotonic — higher vulnerability scores consistently correlate with higher displacement rates. A contract with a score of 40+ is more than twice as likely to see incumbent displacement than one with a score below 10.

Bridge contracts. When an agency issues a short-term extension rather than exercising an option year, they are signaling dissatisfaction. Displacement rates on follow-on contracts after bridges are dramatically higher than on clean option exercises.

Low original offer counts. Contracts awarded with 1-3 offers the first time are more vulnerable on re-compete than contracts with 5+ original offers. Agencies with less market competition originally are hungrier for alternatives the second time.

Incumbent concentration. When one vendor holds 5+ similar contracts at an agency, their overall capacity becomes a concern. Agencies spread risk by selectively displacing the most concentrated incumbents.

Set-aside changes. If the original contract was full-and-open and the re-compete is set aside (8(a), HUBZone, SDVOSB), the incumbent is automatically displaced unless they hold the relevant certification.

Stop bidding only high-confidence wins. If your firm only bids re-competes where you are clearly the frontrunner, you are leaving easy displacement wins on the table. Targeting score-30+ incumbents where you have relevant past performance is higher expected-value than the "we're sure to win" pipeline.

Start building a volume-based pipeline. 22.5% displacement rate means you need to be in 15-20 competitive re-competes per year to win 3-5. If your pipeline has 3 targets per year, you are gambling on 1 being a hit.

Invest capture dollars where vulnerability is highest. Resource allocation should skew toward score-30+ targets in your NAICS codes. Low-score incumbents are not worth expensive capture budgets.

This analysis included 9,872 federal contracts that completed a full re-compete cycle — i.e., the original contract expired, the agency re-solicited, and a new award was made between FY2021 and FY2026. Contracts that ended without re-solicitation (scope cancellation, consolidation, shift to in-house) were excluded. Contracts with ongoing option extensions but no re-solicitation were excluded.

Vulnerability scores were assigned retrospectively based on the original contract's characteristics at the time of its expiration — the same scoring method we apply to live contracts in the Pursight platform.