By Kim Koster, vice president of industry marketing at Unanet
In government contracting, how you structure your project management office can significantly impact project delivery, compliance and profitability. One of the most debated decisions among GovCon leaders is whether to operate a centralized or decentralized PMO. We are excited to see that since 2018, there has been a steady decrease in the number of GovCons that report having no PMO.
The soon-to-be-released 2025 GAUGE Report focuses on operational alignment—how government contractors are connecting their project management, resource planning and business development functions to succeed despite tighter budgets, rising competition and ever-present regulatory demands. With all this in mind, GovCons are reassessing their internal systems and structures to improve coordination, decision-making and delivery across teams. Having the right kind of PMO in place is critical for making these improvements.
The 2025 GAUGE Report reveals that while both centralized and decentralized PMO models are widely used, the right structure depends on your GovCon’s goals, contract complexity and compliance landscape—not necessarily your size.
What the Data Shows
GovCons with a formal PMO report:
- Companies with a PMO are 1.5 times more likely to collect accounts receivable in under 15 days accelerating cash flow and reducing financial risk
- 4.5 times more likely to have “very mature” PM practices
- 2.5 times more likely to have “very mature” RM practices
- 2 times more likely report a high level of AI maturity
- 1.5 times more likely to report effective communication
But beyond whether a PMO exists is how it’s structured — and that’s where the choice between centralized and decentralized becomes strategic.
Centralized PMO: Structure, Consistency & Compliance
A centralized PMO consolidates project governance under one roof. It defines and enforces standardized tools, templates and methodologies across all contracts, improving consistency and visibility.
The benefits of a centralized PMO are:
- It makes it easier to maintain compliance, supporting FAR, EVMS, MMAS and other audit requirements
- Using a centralized PMO allows you to standardize reporting and forecasting
- It provides enterprise-level insights into project health and risk
- You can leverage a centralized PMO to minimize rework and onboarding time through shared processes
- You give yourself a ready-made training ground for new project managers
Centralized PMOs are not just for large GovCons, however. Many small and mid-sized contractors adopt this model to increase efficiency, maintain compliance and prepare for growth. Companies of all sizes can benefit from the use of a centralized PMO.
One thing you will want to watch out for is to avoid creating a data silo. Centralization can sometimes create bottlenecks or reduce flexibility if execution teams feel disconnected from decision-making.
Decentralized PMO: Flexibility & Customer Alignment
A decentralized PMO pushes project oversight closer to project or portfolio delivery teams. Project managers operate within their business units or customer segments and tailor processes to their specific contract requirements.
The benefits of a decentralized PMO are:
- You may achieve greater alignment with customer preferences and agency norms
- You’ll have more flexibility to adapt tools and workflows by program or client
- You can enable faster decision-making for project-specific needs
Decentralized PMOs are often preferred by companies with diverse portfolios or distinct customer groups (e.g., civilian vs. defense), or where contracts demand unique delivery models.
One caveat: without standardized practices, decentralized PMOs may struggle with cross-project visibility, compliance consistency, or audit readiness.
Hybrid PMOs: The Best of Both Worlds?
Many GovCons are turning to hybrid PMO models, combining centralized governance with decentralized execution. These models:
- Establish core standards and reporting templates
- Allow divisions or programs flexibility in how they execute
- Balance compliance with agility
This structure enables scalable growth while respecting the unique demands of different government customers. According to Christine Williamson of Cohn Reznick, one of the co-authors of the 2025 GAUGE Report, “This year’s GAUGE data reinforces what we see in the field: GovCons with mature PMOs are better equipped to manage complexity and scale their operations. A clear structure, whether centralized or hybrid, helps teams respond faster and stay aligned with both regulatory and customer demands.”
The 2025 GAUGE Report shows that when GovCons invest in a structured PMO, they see measurable improvements—in compliance, project delivery and financial performance. The choice between centralized or decentralized isn’t one-size-fits-all, but either model can drive real operational benefits when applied intentionally.
Key Takeaways
- Both centralized and decentralized PMOs are viable — the best model depends on contract complexity, growth goals and compliance obligations.
- Centralized PMOs offer control, consistency and audit readiness — and are increasingly used by small and mid-sized GovCons.
- Decentralized PMOs enable flexibility and customer alignment but require guardrails to maintain oversight.
- Hybrid models help companies scale while staying nimble.
If you’re curious how your peers are structuring their PMOs, check out the 2025 GAUGE Report. You can explore more data-backed insights in our annual report with guides on benchmarking, best practices and effective business systems across the GovCon ecosystem.
[Download the full report now]
