State of Federal Contracting 2026
A data-driven look at federal procurement trends, agency spending patterns, and market opportunities for government contractors. All data sourced from USAspending, FPDS, and SAM.gov.
Published March 20, 2026 · Data through FY2026 Q2 · Updated quarterly
Top Agencies by Contract Spending
FY2026 year-to-date obligations. Year-over-year change compared to same period FY2025.
| # | Agency | Spend | Share | YoY Change |
|---|---|---|---|---|
| 1 | Department of Defense | $420.3B | 62.1% | +4.2% |
| 2 | Department of Health and Human Services | $42.8B | 6.3% | +8.7% |
| 3 | Department of Veterans Affairs | $38.6B | 5.7% | +6.1% |
| 4 | Department of Energy | $36.2B | 5.4% | +3.8% |
| 5 | General Services Administration | $24.1B | 3.6% | -1.2% |
| 6 | Department of Homeland Security | $22.7B | 3.4% | +5.4% |
| 7 | NASA | $19.8B | 2.9% | +7.3% |
| 8 | Department of Justice | $11.4B | 1.7% | +2.1% |
| 9 | Department of State | $10.9B | 1.6% | -3.4% |
| 10 | Department of Transportation | $9.7B | 1.4% | +4.8% |
Agency Spending Visualization
Source: USAspending.gov + FPDS-NG. Includes definitive contracts, purchase orders, delivery orders, and BPA calls.
Fastest-Growing Industries
NAICS codes with the highest year-over-year growth in federal contract obligations.
Key Trend: Cloud & Cyber Dominance
Computing infrastructure (518210) and computer systems design (541512) continue their multi-year growth streak, driven by federal cloud migration mandates, zero trust implementation deadlines, and the ongoing CMMC rollout across the Defense Industrial Base. Contractors with FedRAMP authorizations and CMMC certifications are positioned to capture disproportionate share of these growing markets.
Set-Aside Program Performance
Small business set-aside allocations as percentage of total federal contract spending.
Small Business
Trending up8(a) Business Development
Trending upService-Disabled Veteran (SDVOSB)
Trending upWomen-Owned Small Business (WOSB)
Trending upHUBZone
Trending downEconomically Disadvantaged WOSB
Trending upSmall Business Exceeds 26% Goal
Federal agencies collectively exceeded the 23% small business contracting goal for the fifth consecutive year, reaching 26.4% of total obligations. WOSB programs saw the largest year-over-year increase (+0.4 percentage points), while HUBZone participation dipped slightly amid ongoing certification backlogs at the SBA.
Award Timeline Analysis
Average days from solicitation to award, by contract type and value.
The Q4 Spending Surge
Federal agencies historically obligate 30-35% of their annual budget in Q4 (July-September).
Quarterly Spending Trend
Q1-Q2 actuals from USAspending.gov. Q3-Q4 projected based on historical spending patterns and enacted appropriations.
Q4 2026 Outlook
With no continuing resolution expected (full-year appropriations signed in February 2026), agencies have budget certainty earlier than usual. This means Q3 and Q4 spending could be more evenly distributed. Contractors should begin Q4 positioning by April — monitor for Sources Sought notices, attend industry days, and have capability statements ready for new agency contacts.
Methodology
This report aggregates data from three primary federal data sources: USAspending.gov (obligation amounts and agency breakdowns), FPDS-NG (contract action details, NAICS codes, and set-aside designations), and SAM.gov (active solicitations and entity registrations).
All spending figures represent obligations (not outlays) and include definitive contracts, purchase orders, delivery orders, BPA calls, and indefinite delivery vehicle task orders. Grant spending is excluded. Data is current through March 15, 2026 and will be updated quarterly.
Year-over-year comparisons use the same fiscal period (October 1 through March 15) for both years to account for seasonal spending patterns. Growth rates for NAICS codes are calculated using 12-month trailing obligations compared to the prior 12-month period.
Track These Trends in Real Time
Bureauify monitors all four federal data sources and surfaces opportunities matched to your business. Set up alerts for your NAICS codes, target agencies, and set-aside programs.