March 2026 Federal Contracting Update

March 2026 saw $31.8B in federal contract obligations, marking month 6 of FY2026. This represents a +18% change from February's $27.1B.

Key Statistics: - Total Contract Obligations: $31.8B - Top Agency: Department of Homeland Security ($11.6B - 36.3% of total) - Leading Industry: Commercial and Institutional Building Construction ($8.8B) - Small Business Set-Asides: $1.7B combined

Notable Trends: - DHS led spending with major program investments - Commercial and Institutional Building Construction saw strong contract activity - 8(a) Business Development program led small business awards at $1.2B

Federal contract spending in March 2026 totaled $31.8B. This is +18% compared to February's $27.1B.

FY2026 Month 6 Analysis: - February 2026 (Month 5): $27.1B - March 2026 (Month 6): $31.8B - Change: +18% increase

Spending Velocity: Contract obligations increased this month, reflecting typical federal spending patterns for FY month 6. Mid-fiscal-year spending patterns reflect ongoing program execution.

Department of Homeland Security led all agencies in March 2026.

Top 15 Agencies by Spending: 1. Department of Homeland Security (DHS): $11.6B - 36.3% 2. Department of Veterans Affairs (VA): $4.5B - 14.2% 3. Department of Energy (DOE): $3.5B - 11.0% 4. General Services Administration (GSA): $2.3B - 7.2% 5. Department of Health and Human Services (HHS): $1.5B - 4.8% 6. National Aeronautics and Space Administration (NASA): $1.3B - 4.1% 7. Department of Justice (DOJ): $1.3B - 4.0% 8. Department of Transportation (DOT): $1.2B - 3.7% 9. Department of Education (ED): $740M - 2.3% 10. Department of State (DOS): $659M - 2.1% 11. Department of Agriculture (USDA): $532M - 1.7% 12. Department of the Interior (DOI): $505M - 1.6% 13. Department of Commerce (DOC): $458M - 1.4% 14. Department of the Treasury (TREAS): $394M - 1.2% 15. Social Security Administration (SSA): $375M - 1.2%

Agency Insights: - Department of Homeland Security spending reflects major program investments and ongoing operations - Department of Veterans Affairs maintained strong contract activity - Civilian agencies showed robust spending this month

Commercial and Institutional Building Construction led March contracting activity.

Top 10 Industries (by NAICS): 1. Commercial and Institutional Building Construction (236220): $8.8B 2. Direct Health and Medical Insurance Carriers (524114): $2.8B 3. Computer Systems Design Services (541512): $1.6B 4. Facilities Support Services (561210): $1.6B 5. Other Computer Related Services (541519): $1.5B 6. Security Guards and Patrol Services (561612): $1.4B 7. Engineering Services (541330): $1.1B 8. Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology) (541715): $1.0B 9. Other Basic Inorganic Chemical Manufacturing (325180): $900M 10. Other Activities Related to Credit Intermediation (522390): $647M

Industry Analysis: - Commercial and Institutional Building Construction led with $8.8B in contract obligations - Professional services and IT continue to see strong federal demand - Healthcare services maintained steady investment levels

Small business set-aside programs recorded $1.7B in March 2026 obligations.

Set-Aside Performance: - 8(a) Business Development Program: $1.2B - Service-Disabled Veteran-Owned (SDVOSB): $494M - HUBZone: $18M - Women-Owned Small Business (WOSB): $35M

Analysis: The 8(a) Business Development program continues to lead small business contracting, with Service-Disabled Veteran-Owned (SDVOSB) showing strong performance.

Set-Aside as Percentage of Total: At 5.4% of total March spending, set-asides are below the 23% annual goal. This is typical for individual months—small business percentages are measured annually and often increase in Q3/Q4 as agencies push to meet goals.

April 2026 outlook and upcoming opportunities.

Expected Trends: - Steady contract activity anticipated - IT modernization and cybersecurity contracts continue strong - Professional services demand remains robust across agencies

Opportunities to Watch: - Major agency IT modernization initiatives - Healthcare services contracts (VA, HHS) - Defense program task orders - Infrastructure and facilities management

Key Dates: - End of Q2 FY2026 (mid-year review)

Contractor Recommendations: 1. Monitor SAM.gov for new solicitations in your target agencies 2. Track agency forecast and procurement schedules 3. Prepare for upcoming recompetes and new requirements 4. Engage with small business offices for set-aside opportunities