Government Funded Through September 30: What It Means for Federal Contractors

Yesterday, President Trump signed a $1.2 trillion spending package into law, ending the partial government shutdown and funding most federal agencies through September 30, 2026. For small businesses pursuing federal contracts, this is significant news—here's what you need to know.

What Just Happened

The House passed the funding package by a narrow 217-214 vote on Tuesday, following Senate approval last week. The legislation provides full-year funding for:

• Department of Defense
• Department of Labor
• Department of Health and Human Services
• Department of Education
• Department of State
• Department of Treasury
• Department of Transportation
• Department of Housing and Urban Development

Why This Matters for Federal Contractors

1. Agencies Can Release New Contract Opportunities

During shutdowns and continuing resolutions (CRs), agencies often freeze new procurements. With full-year funding now in place, expect to see:

• New solicitations hitting SAM.gov over the coming weeks
• Delayed RFPs finally being released that were held during the funding uncertainty
• Increased activity from contracting officers who now have budget clarity

2. Contracting Officers Have Spending Authority

When agencies operate under short-term CRs, contracting officers are limited in what they can obligate. Full-year appropriations mean:

• Larger contract awards can move forward
• Multi-year projects can be initiated
• Agencies can commit to new programs rather than just maintaining existing ones

3. End-of-Year Spending Pressure Begins

With funding locked in through September 30, the familiar "use it or lose it" dynamic kicks in. Federal agencies must obligate their budgets before the fiscal year ends, which historically leads to:

• Increased small-dollar purchases in Q3 and Q4
• Accelerated procurement timelines as summer approaches
• More opportunities for small businesses as agencies look to meet small business contracting goals

Agencies to Watch

Based on the appropriations details, here are agencies likely to see increased contracting activity:

Defense (DoD): Always the largest piece of federal spending, expect continued opportunities in IT modernization, cybersecurity, and logistics support.

Health and Human Services (HHS): With an $85 million increase for early learning programs and continued healthcare priorities, look for opportunities in health IT, program administration, and support services.

Transportation (DOT): Infrastructure investments continue to drive opportunities in construction, engineering, and project management.

Labor (DOL): Workforce development and employment services contracts typically see steady activity.

What About DHS?

If your business focuses on homeland security contracts, stay alert. DHS is only funded through February 13, and Congress has just 10 days to negotiate a deal. Areas that could be affected include:

We'll be monitoring this closely and will update you as the situation develops.

Action Items for Small Businesses

This Week

1. Check SAM.gov daily for new opportunities from funded agencies
2. Review your SAM.gov registration to ensure it's current and complete
3. Update your capabilities statement to reflect recent past performance

This Month

1. Reach out to contracting officers you've worked with—they now have budget certainty
2. Research agency procurement forecasts for Q2-Q4 opportunities
3. Consider teaming arrangements for larger opportunities you couldn't pursue alone

Before September 30

1. Position for end-of-year spending by building relationships now
2. Monitor for sole-source opportunities as agencies rush to obligate funds
3. Stay ready to respond quickly to expedited solicitations

The Bottom Line

Full-year funding is good news for federal contractors. After months of continuing resolutions and a brief shutdown, agencies finally have the budget clarity they need to move forward with procurements.

The next eight months present real opportunities for small businesses prepared to pursue them.

Stay tuned for updates on the DHS funding situation. We'll keep you informed as Congress negotiates over the next 10 days.