October 1 is more than a date. It’s a starting point for smart contractors.
Every year, the federal government resets its budget starting October 1st. The mistake most contractors make is waiting until then to act. The real preparation happens three months before.
From July through September, you can still capture final FY2025 awards while setting yourself up for FY2026. If you wait until Q1 to start thinking about strategy, you’re already behind.
Here’s what we know is coming, and what you should be doing right now.
What’s in the Pipeline for FY2026
Congress has yet to finalize FY2026 appropriations, but agency budget requests and House proposals suggest where funding will go.
Defense remains the top priority. The Department of Defense requested 1.01 trillion dollars for FY2026, including 1.3 billion specifically for small business innovation programs. That covers the Defense Innovation Unit, APFIT, and the Office of Strategic Capital. Key focus areas include cybersecurity, AI, and shoring up the defense industrial base.
Health and Human Services is targeting expanded rural healthcare access and modernization. Its “Make America Healthy Again” initiative includes a $500 million request to fund provider expansion, tribal health support, and healthcare tech upgrades.
Infrastructure investment is expected to remain steady, particularly through the Department of Transportation. While proposed FY2026 budgets include reductions to some clean energy initiatives, such as a $15 billion rollback affecting DOE and EPA programs, there's continued emphasis on large-scale transportation, broadband, and energy reliability projects. Contractors in climate-focused sectors may find new opportunities by aligning with traditional infrastructure and modernization efforts.
Technology modernization is still on the table. Agencies like GSA, DHS, and SBA are staying committed to cloud migration, cybersecurity compliance, and automated acquisition systems. While there’s interest in artificial intelligence procurement, there’s no confirmed FY2026 expansion of federal AI vendor programs.
What Changes When the Fiscal Year Starts
When October 1st hits, agencies that were nearly out of funds get a clean budget, and backlogged procurement goals reappear. Contracting officers shift from year-end exhaustion to new fiscal expectations.
This is often when first-time vendors break in. But it only works if your certifications are in place, your profile is up to date, and you’ve already shown performance or outreach.
A small award in August could be what gets you in the door for something larger in November. But not if you miss the window.
The Two-Track Strategy Contractors Use to Win
The most effective federal contractors aren’t choosing between FY2025 and FY2026. They’re working on both sides.
In July, they finalize their SAM registration, update capability statements, and track which agencies are still obligating end-of-year funds.
In August, they submit simplified bids while building a NAICS-aligned strategy for the upcoming fiscal year.
In September, they push for final FY2025 wins and confirm that their 2026 outreach is lined up.
In October, they begin executing with a clean slate, warm agency contacts, and real performance on the record.
One USFCR client, an SDVOSB in the healthcare space, won two VA contracts in under 90 days after submitting quotes during the summer. When FY2026 began, they had performance in place and were eligible for additional awards right away.
What’s Real and What’s Hype in FY2026
Let’s ground this in facts.
Confirmed: DoD small business funding. The 1.3 billion allocation for DIU, APFIT, and related programs is real. These channels are built for small vendors to prototype emerging tech and scale into long-term defense contracts.
Unconfirmed: GSA AI expansion. While technology modernization is active, there is no confirmed rollout for expanded AI vendor pools or procurement templates in FY2026. Watch the space, but don’t hinge your business development on it yet.
Changing: Climate-related spending. With DOE and EPA facing deep cuts, green construction and electrification work will be more limited than in prior years. Instead, look to DOT and DoD for infrastructure and facility upgrades.
How to Position Yourself Right Now
Here’s where we see real results:
Secure past performance. A single 10,000-dollar simplified contract in Q4 can count in FY2026 if it’s relevant to the agency or NAICS code. That can make the difference in competitive bids later.
Start certifications now. Programs like SDVOSB (through SBA VetCert), WOSB, and HUBZone take time. If you want them reflected in your SAM and DSBS profiles by October, start now.
Get your materials right. Your Capabilities Statement should match your NAICS codes, highlight relevant experience, and use federal-facing language. Most businesses miss the mark here and stay invisible.
Use the right tools. USFCR's Advanced Procurement Portal (APP) helps contractors find simplified acquisitions, track set-asides, and view short-turnaround opportunities. You don’t need to guess what’s available. You need to log in and act fast.
What’s Next
Build your FY2026 strategy now while capturing final FY2025 opportunities. This summer is where positioning happens. When October comes, you should already be moving.
If you need help with registration, capability updates, or targeting, USFCR can help. But the main takeaway is this: don’t wait.
How do I find final FY2025 opportunities in time?
Use the USFCR Advanced Procurement Portal (APP) to search by set-aside type, award size, and agency—filter for simplified acquisitions and short response times to move quickly before September 30.
Which certifications matter most for FY2026?
That depends on your ownership and location. SDVOSB, WOSB, EDWOSB, and HUBZone all carry weight. Start now so your status is verified and visible in FY2026.
Can a $10,000 FY2025 contract help me in FY2026?
Yes, as long as it’s aligned with the NAICS code or agency you’re targeting. Save the award info and use it as past performance in upcoming bids.
What changed in climate-related contracting?
Proposed FY2026 cuts include a $15 billion rollback from clean energy programs and reduced DOE spending on renewables. Infrastructure is still active, but climate-specific funding is more limited than in recent years.
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