FY26 Federal Contracting Outlook: Opportunities and Shifts Contractors Need to Track

In FY26, federal contracting will be shaped by two main factors: a robust pipeline of enterprise vehicles worth more than $120 billion and a procurement environment facing budget uncertainty, efficiency demands, and ongoing reforms. For small and mid-sized contractors, this brings both new opportunities and real challenges. To succeed, companies will need to build a strong pipeline, stay alert to changing timelines, and adjust their strategies to keep up with the latest reforms.

Budget and Timing Pressures

The FY26 budget cycle is expected to start with continued uncertainty. Agencies anticipate more continuing resolutions, which will push new spending and solicitations later into the year. Procurement teams are already adjusting their timelines to manage these delays.

Several high-profile vehicles remain on hold or delayed:

• MAPS (Army) and AAMAC (DOD CDAO) remain paused pending internal reviews.

• VPAS (VA) was formally paused in June 2025.

• HOPSS (HHS/NIH) was extended through 2027, with recompete activity unlikely until late FY26.

While these delays add uncertainty, they also show where agencies are focusing their priorities. Contractors should prepare flexible plans that can adjust as schedules change.

Efficiency and Consolidation

Efforts to improve efficiency will influence the market just as much as budget decisions. Agencies are being asked to:

• Consolidate duplicative programs.

• Reduce overlapping contract vehicles.

• Enhance reliance on enterprise platforms for IT modernization, cybersecurity, and data-driven initiatives.

GSA’s consolidation of MAS schedules and increased use of category management are early examples of this shift. Small businesses now need MAS eligibility to compete for major opportunities. Large integrators will need strong OEM partnerships, competitive pricing, and dependable channel networks to maintain their edge.

Procurement Reform: The FAR Overhaul

The FAR Overhaul (RFO) is the biggest reform in decades. With 75 percent finished and Phase 1 set for completion by September 30, the goals are clear:

• Simplify acquisition rules.

• Expand the use of set-asides and lower entry barriers for small businesses.

• Streamline evaluations for speed and efficiency.

The SBA will soon issue new guidance to match the changes in FAR Part 19. Contractors should treat these reforms as requirements to act on now, not as distant goals.

FY26 Vehicle Pipeline

Even with delays, theDespite delays, the primary contract vehicles remain on track. Agencies plan to release major IDIQs and BPAs throughout 2025 and 2026. Key examples include:

• CYBER DOME (CISA): $18–20B | Agency-wide cyber | Feb 2026

• AFCAP VI (USAF): $15B | Contingency/OCONUS logistics | Sep 2026

• JWCC NEXT (DISA): $9B | Enterprise cloud | Mar 2026

• 2GIT Follow-On (GSA): $5.5B | IT hardware/software | Nov 2025

• SOFGSD (USSOCOM): $3.2B | SOF enterprise services | Nov 2025

• CenTAM (Census): $1B+ | MAS BPA for app modernization | Mar 2026

• SWIFT 2 (DHS ICE): $1.09B | Agile/DevSecOps | Nov 2025

• SWES 2.0 (DOT): $548M | Agile/DevSecOps BPA | Jun 2026

In short, opportunities are delayed but not canceled. Agencies still need enterprise partners to help them meet their goals.

GSA’s Role and Market Signals

At the September Growth Officers Association session in Reston, GSA leaders outlined near-term priorities:

• Polaris SB remains viable, but patience has limits. If progress stalls, changes may follow.

• OASIS+ Phase 1 awards are the current priority, with additional domains and a winter on-ramp possible.

• CIO-SP4 is effectively dead, with no GSA takeover.

• NASA SEWP VI will remain stable until awards are made, then long-term transfer of administration is expected.

• OneGov launched in 2025 with software, expanding into broader IT solutions in FY26 and beyond.

GSA also plans to designate the MAS program as Best-in-Class (BIC), positioning MAS as the primary contract vehicle for IT acquisitions.

Small Business and VARs

The commitment to supporting small businesses remains clear. SBA instructions tied to the FAR overhaul will make more set-aside opportunities official. At the same time, GSA emphasized that Value-Added Resellers (VARs) remain crucial to the system. Many manufacturers still prefer not to sell directly, so VARs remain a regular part of federal buying.

AI in Federal Acquisition

AI is moving from pilot projects to operational support:

• Acquisition planning and regulatory compliance.

• IT cost optimization.

• Contract oversight and program performance monitoring.

Agencies are being encouraged to pilot AI and update their policies as they gain experience. For contractors, the ability to leverage AI is rapidly becoming a core differentiator.

What Contractors Should Do Now

• Plan for delays: Build flexibility into capture schedules and resource planning.

• Strengthen partnerships: Small business teaming, 8(a), and SDVOSB alignments will become even more valuable.

• Treat compliance as baseline: MAS eligibility, CMMC, and security clearances are now essential requirements.

• Adapt capture strategy: Procurement reform will reward agile proposals, lean teams, and data-driven approaches.

Outlook

FY26 will bring significant change at the leadership level, but demand for cyber resilience, IT modernization, and enterprise services will stay strong. The real shift is in how companies access the market. Contractors who adapt early will be best positioned when delayed opportunities become available.