Executive Summary
Q3 FY2026 (April-June) saw $81.9B in federal contract obligations. This represents a -61% change from Q2's $212.2B.
Quarterly Highlights: - Total Contract Obligations: $81.9B - Top Agency: Department of Homeland Security ($20.6B) - Leading Industry: Commercial and Institutional Building Construction ($13.7B) - Small Business Set-Asides: $5.8B (7.1% of total)
FY2026 Progress: Q3 shows strong program execution heading into the final quarter. Year-end planning intensifies.
Spending Breakdown
Detailed analysis of Q3 FY2026 contract obligations.
Total Spending: $81.9B - Previous Quarter (Q2): $212.2B - Quarter-over-Quarter Change: -61%
Spending Distribution: - Defense Sector: $56M (0.1%) - Civilian Agencies: $81.8B (99.9%)
Spending Patterns: Mid-fiscal year spending patterns reflect ongoing program execution and new requirements.
Agency Analysis
Top federal agencies by Q3 FY2026 contract obligations.
Top 15 Agencies: 1. Department of Homeland Security (DHS): $20.6B - 25.2% 2. Department of Veterans Affairs (VA): $15.8B - 19.3% 3. Department of Energy (DOE): $12.1B - 14.7% 4. General Services Administration (GSA): $6.7B - 8.2% 5. Department of Health and Human Services (HHS): $5.4B - 6.6% 6. National Aeronautics and Space Administration (NASA): $3.4B - 4.1% 7. Department of Transportation (DOT): $3.2B - 3.9% 8. Department of Agriculture (USDA): $2.9B - 3.5% 9. Department of Justice (DOJ): $2.3B - 2.9% 10. Department of the Interior (DOI): $2.0B - 2.5% 11. Department of State (DOS): $1.8B - 2.1% 12. Department of the Treasury (TREAS): $1.6B - 1.9% 13. Department of Commerce (DOC): $1.4B - 1.7% 14. Social Security Administration (SSA): $397M - 0.5% 15. Department of Education (ED): $377M - 0.5%
Agency Sector Analysis: - Defense spending remains dominant at 0.1% of total - Healthcare agencies (VA, HHS) combined: $21.2B - Technology-focused agencies (GSA, NASA, DHS) active in modernization initiatives
Industry Trends
Industry sector performance for Q3 FY2026.
Top 10 Industries (by NAICS): 1. Commercial and Institutional Building Construction (236220): $13.7B 2. Direct Health and Medical Insurance Carriers (524114): $7.8B 3. Computer Systems Design Services (541512): $6.4B 4. Facilities Support Services (561210): $5.1B 5. Other Computer Related Services (541519): $3.8B 6. Engineering Services (541330): $3.0B 7. Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology) (541715): $2.9B 8. Ship Building and Repairing (336611): $2.3B 9. All Other Professional, Scientific, and Technical Services (541990): $2.0B 10. Research and Development in the Physical, Engineering, and Life Sciences (541710): $1.9B
Industry Insights: - Professional and technical services dominate federal contracting - IT services continue strong growth across agencies - Healthcare and R&D sectors maintain robust demand - Construction and facilities services reflect infrastructure investments
Small Business Performance
Small business set-aside program performance for Q3 FY2026.
Set-Aside Spending: $5.8B (7.1% of total)
Program Breakdown: - 8(a) Business Development Program: $3.6B - Service-Disabled Veteran-Owned (SDVOSB): $2.0B - HUBZone: $98M - Women-Owned Small Business (WOSB): $102M
Small Business Analysis: Q3 small business spending at 7.1% is below the 23% annual goal. Quarterly figures often vary—annual totals are the key measure.
Program Trends: - 8(a) Business Development continues to lead small business contracting - Service-Disabled Veteran-Owned shows strong performance - Agencies increasingly using set-asides for IT and professional services
Q4 FY2026 Outlook
Outlook for Q4 FY2026 and beyond.
Expected Trends: - End-of-fiscal-year spending acceleration expected - Agencies working to meet annual obligations - Small business goals push likely
Key Focus Areas: - IT modernization and cybersecurity investments continuing - Cloud migration and zero trust implementation - Healthcare services demand (VA, HHS) - Infrastructure and sustainability initiatives
Opportunities: - Monitor SAM.gov for new solicitations - Engage with agency small business offices - Track agency procurement forecasts - Position for upcoming recompetes
Contractor Recommendations: 1. Review agency strategic plans for FY priorities 2. Build relationships with program offices 3. Ensure compliance certifications are current 4. Prepare competitive pricing strategies 5. Develop past performance documentation
Data sources & methodology
Analysis based on prime contract awards only; sub-contract spending excluded. Federal spending figures sourced directly from USASpending.gov (U.S. Department of the Treasury). Typical 30–90 day publication lag from award date. Methodology and figures may be updated as additional data becomes available.
Related Reports
Turn this intelligence into won contracts.
Responding to federal RFPs with FAR compliance, Section L/M mapping, and SF330s is where most teams slow down. Book a 30-minute walkthrough to see Bidara analyze a real federal RFP and generate a compliant first draft live.
Book a Demo