The federal government's fourth quarter runs July 1 through September 30, and it is when agencies spend the most money of the entire year. In fiscal year 2025, agencies committed $290.5 billion to contracts in Q4 alone, 37 percent of the year's total, based on our analysis of USAspending.gov data. For small businesses the effect is even stronger: 43 percent of their annual contract dollars arrived in these same three months. The reason is simple. Most agency budgets expire on September 30, and money that is not committed to a contract by then goes back to the Treasury. The next 90 days are when federal buyers stop deliberating and start awarding.
Here is what the year-end rush actually looks like in the numbers, why 2026 is different from every year before it, and what to do with the time you have left.
Why end-of-fiscal-year spending spikes
Congress gives most agencies their operating money one year at a time. If an agency has not obligated those funds by September 30 (obligated means committed to a contract or order), the money expires. There is no rollover. And a program office that hands money back rarely gets a bigger budget the next year.
So every summer, the same thing happens. Program managers count what is left, contracting offices work through their backlog, and purchases that sat in review since spring suddenly move. It is not carelessness. It is a deadline, and the deadline has money attached.
Washington even has a name for this ritual: the sweep. Scott Kupor, Director of the U.S. Office of Personnel Management, wrote an unusually candid post about the year-end sweep on September 30, 2025. Agencies, in his words, "sweep up" any unused funds before they expire, and the contracting industry has coined its own term for the result: "sweep-up awards," the business of "grabbing the cash before it disappears." He also pointed to reporting that contract dollars awarded in September run roughly double every other month. Hold that claim; our numbers are next.
For a contractor, that changes the texture of the market. In October, a federal buyer has twelve months to make a decision. In August, they have weeks. Speed, availability, and a clean registration stop being nice-to-haves and become the whole game.
Q4 by the numbers
We pulled the FY2025 contract obligation data from USAspending.gov, the government's own spending database, and totaled it by quarter. The saved search is public, so you can open the same dataset yourself. The year-end surge is not a GovCon legend. It is visible in every row:
| FY2025 quarter | Contract dollars | Share of the year |
|---|---|---|
| Q1 (October to December) | $156.7 billion | 20% |
| Q2 (January to March) | $153.2 billion | 20% |
| Q3 (April to June) | $178.0 billion | 23% |
| Q4 (July to September) | $290.5 billion | 37% |
Inside Q4, the money tilts hard toward the end. Agencies obligated $71.9 billion in July 2025 and $70.1 billion in August. Then September hit $148.5 billion, more than July and August combined, and nearly as much as the entire second quarter. One month out of twelve carried 19 percent of the year. Kupor's "roughly double" holds up almost to the dollar.
September is not a bonus round. It is the single busiest buying month on the federal calendar, and it rewards the vendors who prepared in July.
Small businesses win a bigger share of Q4 than anyone
Here is the part of the data that matters most if you are reading this. Small businesses took home $76.6 billion of their $176 billion in FY2025 contract dollars during the fourth quarter. That is 43 percent of their year, compared with 37 percent for the market as a whole, and 2.7 times what they won in the first quarter.
The reason is structural. When a contracting office needs to move money in weeks instead of months, it reaches for the fastest tools it has: purchase-card buys, simplified acquisitions, and quick-turn set-asides. Those are exactly the lanes where small businesses compete best. Big, complex procurements do not get planned and awarded in a quarter. A $40,000 facilities repair, a $200,000 IT refresh, or a $15,000 equipment order does.
Year-end season is, dollar for dollar, the most small-business-friendly stretch of the federal calendar. Which raises the obvious question: how do you position for it?
What makes Q4 2026 different
This is the first year-end spending season under the new acquisition thresholds, and the fast lanes are wider than they have ever been.
Since October 1, 2025, the micro-purchase threshold sits at $15,000, up from $10,000, and the Simplified Acquisition Threshold sits at $350,000, up from $250,000. Both came out of the broader rewrite of federal buying rules; our FAR Overhaul guide for small businesses covers them in detail. And as of last week, one more line moved: for defense contracts entered into after June 30, 2026, the certified cost and pricing data requirement no longer kicks in until $10 million, up from $2.5 million.
Put plainly: a federal buyer trying to commit money before September 30 can now award more work, faster, with less paperwork than in any previous year-end. Purchases up to $15,000 can go straight to a capable vendor with almost no process. Work up to $350,000 can move through streamlined procedures measured in days. That speed favors whoever the buyer can find, verify, and pay without friction. Your job between now and September is to be that vendor.
The 90-day playbook
July: get findable. Start with SAM.gov, the registry federal buyers use to find and pay vendors. Not registered yet? Begin now. Registration is free, and activation can take weeks, so starting in July is what keeps you eligible for the September rush. Already registered? Do not assume it is fine. Open your profile and confirm it is active and accurate: the right NAICS codes, a monitored email address, and a capability narrative that says what you actually sell. Buyers searching for a vendor in September will not chase down your correct contact information. Then pick three to five target agencies that already buy what you offer, and study what they bought last September on USAspending.gov. Year-end buying patterns repeat.
August: get in front of buyers. Respond to sources sought notices and requests for information in your lane, even when they feel preliminary. They are how contracting officers build the vendor lists they will call in September. Reach out to the small business offices at your target agencies. If you can team with an established prime as a subcontractor, August is when those conversations happen. And have your numbers ready: a buyer with expiring funds wants a quote today, not a pricing exercise next week.
September: be fast. Answer solicitations and quote requests the day they arrive. Keep your certifications, representations, and past performance references ready to send. Stay reachable through September 30, including the last week, when awards are still being signed. A capable vendor who responds in two hours beats a slightly better one who responds on Thursday.
What not to do
Do not go quiet in August. The awards signed in September were scoped in July and August. If you wait until you see solicitations to engage, you are competing for the leftovers.
Do not ignore the small stuff. A $12,000 purchase-card order will not make your year, but it makes you a known vendor with past performance at that agency, and it often arrives with almost no competition. Next year's $300,000 simplified acquisition goes to someone the buyer already trusts.
Do not chase everything. A blanket bid-on-it-all approach burns your proposal capacity on work you will not win. Three agencies you know well beat thirty you found last week.
Do not assume you are too new. Q4 is the easiest season for a first federal win precisely because buyers need vendors who can simply take the order. If you have never sold to the government, start with our step-by-step guide to winning your first federal contract.
How FEDCON helps
FEDCON helps small businesses get positioned before the money moves: SAM.gov and SBS registration done right, target-agency mapping, and hands-on proposal support when the solicitation drops. If you want a clear read on where your business fits in this year's Q4, talk to a FEDCON advisor. You can also reach our Help Desk at 1-855-233-3266.
Frequently asked questions
When does the federal fiscal year end?
The federal fiscal year ends on September 30. Fiscal year 2026 runs from October 1, 2025 through September 30, 2026, and the fourth quarter covers July 1 through September 30. Most agency operating funds must be obligated by the September 30 deadline or they expire.
How much does the government spend in the fourth quarter?
In fiscal year 2025, federal agencies obligated $290.5 billion on contracts in the fourth quarter, about 37 percent of the year's $778 billion total, according to USAspending.gov. September was the largest single month at $148.5 billion, more than July and August combined.
What happens to federal funds that are not spent by September 30?
Most annual appropriations expire at the end of the fiscal year. Money that has not been obligated (committed to a contract or order) by September 30 is returned to the Treasury, and the agency loses the ability to spend it. This use-it-or-lose-it rule drives the year-end surge in contract awards.
Is the fourth quarter a good time for small businesses to win federal contracts?
Yes. In fiscal year 2025, small businesses won 43 percent of their annual federal contract dollars in the fourth quarter, a higher year-end concentration than the market overall. Agencies moving money quickly lean on purchase cards, simplified acquisitions, and quick-turn set-asides, which are the lanes where small businesses compete best.
What is end-of-fiscal-year spending?
End-of-fiscal-year spending is the surge in federal purchasing that happens between July and September 30, when agencies rush to obligate funds that would otherwise expire. In FY2025 it added up to $290.5 billion in contract dollars, 37 percent of the government's spending for the whole year.
What is the year-end sweep in federal contracting?
The sweep is the government's year-end budget ritual: agencies gather up (sweep up) any appropriated funds they have not yet spent and rush to put them on contract before the fiscal year ends on September 30. Contractors call the resulting awards sweep-up awards. In FY2025, September contract obligations ran roughly double those of a typical month.
Where can I find fourth-quarter federal bid opportunities?
Active federal solicitations post for free at SAM.gov, where you can save searches by NAICS code and get email alerts as new opportunities and sources sought notices appear. Agency procurement forecasts preview what is coming, and USAspending.gov shows what your target agencies bought in previous Septembers. Relationships with agency small business offices and prime contractors also surface quick-turn work that never appears in a formal solicitation.
Where do I register to bid on federal contracts?
All federal contractors register at SAM.gov, the government's official vendor registry. Registration is free, and no third party is required to do it. Activation can take several weeks, so start well before the opportunity you want to chase. Once active, you can submit bids and appear in the databases federal buyers search.
Which companies win fourth-quarter federal contracts?
Vendors that are registered, findable, and fast. In FY2025, small businesses won $76.6 billion in fourth-quarter contract dollars, 43 percent of their annual total, because year-end buying leans on purchase cards, simplified acquisitions, and set-asides that favor small, responsive firms.
What services are most in demand at the end of the fiscal year?
In September 2025, the biggest categories small businesses won included IT services and software, professional and engineering support, program management, and building construction and repair, based on USAspending.gov data. Services that can start quickly fit the year-end window best, because agencies are buying against a hard deadline.
Sources
- FEDCON analysis of USAspending.gov FY2025 contract transaction data, pulled July 6, 2026. Saved searches: all contracts and small business recipients; quarterly and monthly totals aggregated through the USAspending API
- Acquisition.gov, "Threshold Changes, October 1, 2025"
- National Defense Authorization Act for Fiscal Year 2026, Pub. L. 119-60, Section 1804
- U.S. Small Business Administration, "SBA Releases FY25 Scorecard for Small Business Contracting," June 25, 2026
- U.S. Office of Personnel Management, Scott Kupor, "You Had One Job, Spend the Money!", September 30, 2025