Small businesses are facing the fallout of Trump’s cuts to science funding in unexpected ways

Wildlife Computers’ sales dropped after federal cuts

Wildlife Computers is a small technology company based in Washington state that makes data-collection tags for wildlife telemetry. Wildlife Computers sells tracking devices to researchers and agencies, including the National Oceanic and Atmospheric Administration.

Melinda Holland, the company’s leader, said 2025 ended with the firm’s first layoffs in 40 years.

Wildlife Computers’ sales to federal agencies fell 30 percent between 2024 and 2025, according to Holland. Company leadership said the decline followed reduced federal research activity and uncertainty around agency funding.

Melinda Holland cut staff after 2025 slide

After the 2025 downturn, Wildlife Computers says it had to scale back staffing and slow internal investment. Company leadership tied the pullback to weaker demand from federally funded research customers and increased uncertainty in agency budgets.

Sales to federal agencies like NOAA dropped 30 percent from 2024 to 2025, according to Holland. The decline followed federal cuts that reduced research activity and demand for animal tracking tags.

NOAA contract demand weakened after science cuts

Federal spending reductions hit companies tied to environmental and wildlife research. Holland said NOAA-related sales declined sharply between 2024 and 2025, which reduced demand for telemetry tags used in field science.

Other small businesses told POLITICO’s E&E News they saw slower orders and weaker federal demand in 2025. These firms linked the pattern to cuts and shake-ups at federal science agencies.

GovCon Intelligence found a 2025 small contract drop

Federal spending on small business contracts declined in 2025, according to contract expert Sam Le. Le said it was the first decrease in a decade, based on his analysis posted on GovCon Intelligence.

Le told E&E News that many small businesses had contracts cut during mid-2025 amid heightened activity from the administration’s DOGE cost-cutting operation, according to contract analysis cited in the report. Le also said the administration pushed consolidation, turning multiple smaller contracts into one larger contract.

Tonya Saunders says contractors lost support

Small contractors said doing business with Washington became harder in 2025. Tonya Saunders of the nonprofit Mid Tier Advocacy said some companies lost internal small-business support systems within agencies.

Saunders said small businesses used to rely on advocates within agencies to help navigate procurement and contracting. Saunders said that support has weakened, creating friction and delays compared with earlier years.

Trump workforce cuts hit NOAA, NASA, and EPA

Data cited in reporting show the federal workforce overall fell by roughly 10% over that period (about 220,000 positions). Science-focused agencies were among those facing staffing strain, according to the same reporting.

Business leaders said science agencies lost staff and capacity. Federal budget experts said thousands of employees departed science-focused agencies such as NOAA, NASA, and EPA.

Federal science grants stalled, then restarted

Researchers and universities reported significant disruption in NIH funding decisions, including grant applications being paused or held for additional review in certain categories. Court actions and legal settlements later pushed NIH to resume or re-review some of the affected applications.

Legal challenges pushed funding back into motion. An appeals court affirmed a ruling that the administration cannot cap indirect research costs, according to the report’s summary of court actions.

NIH indirect cost cap proposed 15 percent

NIH announced a proposed 15% cap on indirect-cost reimbursement for grants, but courts blocked it on appeal. Separately, some small firms said a similar 15% cap affected specific SBIR-funded work, raising concerns that it could spread more broadly.

University associations and states argued the cap violated Congress’s directions and NIH policies. The dispute triggered lawsuits and broader alarm across research institutions.

NIH spending caught up after summer pressure

NIH appeared at risk of failing to spend the full $36 billion Congress allocated for outside grants in 2025. Jeremy Berg of the University of Pittsburgh, who tracks NIH spending, said the agency was getting way behind earlier in the year.

Over the summer, Republican senators demanded NIH distribute the money Congress had awarded. After that pressure, the agency shifted practices to move money out more quickly.

Congress set NIH funding at $48.7B

Congress largely rejected proposed deep cuts to science for the fiscal year 2026. The NIH is scheduled to receive $48.7 billion, a $415 million increase over 2025, according to a bill summary cited in the report.

The package included targeted boosts. Congress increased cancer research funding by $128 million, added $100 million for Alzheimer’s disease, and boosted ALS research by $15 million.

Environmental contracts fell in key categories

Federal contract data compiled by Sam Le showed mixed results across environmental categories. Environmental engineering services dollars for small businesses rose from fiscal 2013 through 2024, then declined in 2025.

Environmental remediation services increased from 2015 through 2024 but decreased in 2025. Environmental consulting services increased from 2021 through 2024, but also declined in 2025.

Avanti Corp lost $2M and cut headcount

AvantiCorp’s revenue from federal contracts fell about $2 million short of expectations in 2025, according to President and CEO Lynn Petrazzuolo. Avanti supports agencies with science and engineering studies and environmental compliance consulting.

Petrazzuolo said Avanti had built environmental justice qualifications during the prior two years. Those contracts dried up after Trump’s executive actions rolled back environmental justice and halted federal DEI-related programs.

For a broader look at how shifting federal priorities are affecting organizations nationwide, see how Arkansas moved to drop PBS branding after federal funding dried up.

SBIR program lapse blocks new R&D bids

The Small Business Innovation Research program was established in 1982 and requires some agencies to allocate budget shares to small company research. The SBIR needed reauthorization, and Congress failed to pass an extension, leaving the program nonexistent as of early 2026.

A company president told E&E News the firm could not apply for new SBIR funding for four months while negotiations continued. Jere Glover of the Small Business Technology Council warned that indirect cost caps could make small firms lose money.

For more on the broader political standoff behind these disruptions, read why shutdown tensions are rising as Democrats warn over ICE funding.

What do you think about small businesses facing the fallout of Trump’s cuts to science funding in unexpected ways? Share your thoughts and drop a comment.

This slideshow was made with AI assistance and human editing.

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