Government Fiscal Year Explained: How to Use It to Win More Contracts

What Is the Federal Fiscal Year?

The federal government operates on a fiscal year (FY) that runs from October 1 through September 30 — not the calendar year. This schedule was established by the Congressional Budget Act of 1974 and applies uniformly across all federal departments and agencies: the Department of Defense, civilian agencies like HHS and DHS, and independent bodies like GSA and the SBA.

FY2026 runs from October 1, 2025 through September 30, 2026. When a contracting opportunity references "FY26 funding," it means money appropriated for that window. Note that state and local governments operate on varying fiscal calendars — many end June 30 — so if you pursue both federal and SLED (state, local, education) work, you are tracking multiple budget cycles simultaneously.

Each fiscal year begins with an appropriations process: Congress must pass spending bills to fund each agency. When that process runs past October 1 — which happens more often than not — the government operates under a Continuing Resolution (CR), a stopgap measure that funds agencies at prior-year spending levels until full appropriations are enacted. CRs have significant implications for contractors, which we cover below.

Quarter-by-Quarter Breakdown

The federal fiscal year divides into four quarters, each with distinct procurement behaviors. Understanding the rhythm of each quarter lets you allocate your business development resources strategically rather than spreading effort evenly across the year.

Q1 (October – December): Slow Start

The new fiscal year opens, but funding often is not fully available. Congress historically misses the October 1 deadline for appropriations, leaving most agencies operating under a Continuing Resolution. Under a CR, agencies are restricted to prior-year spending rates and cannot initiate new programs or make large new contract awards that were not already in progress.

New solicitations are rare during Q1 CRs. Agencies use this period to keep existing contracts funded and defer new competitions until full-year appropriations arrive. Rather than chasing contracts that are not moving, use Q1 to build relationships, attend industry days (many agencies schedule them in October and November for the new fiscal year), and update your SAM.gov registration before it lapses.

Q2 (January – March): Ramp Up

By January, appropriations are usually enacted — either as a full-year spending bill or a long-term CR. Either way, agencies have clearer visibility into their budgets and can begin planning new acquisitions. This is when market research activity picks up sharply.

RFIs and Sources Sought notices peak in Q2. Agencies are market-researching future procurements, and your responses to these notices are shaping the solicitations that will drop in Q3. Do not treat Q2 Sources Sought responses as low-priority — they are your best opportunity to influence requirements before the RFP is written and to signal capability to contracting officers who do not yet know your firm.

Q3 (April – June): Peak Solicitation Season

Q3 is the highest-volume period for new solicitations on SAM.gov. Agencies need enough time to run a full competition, evaluate proposals, and make awards before September 30. If a program office wants to award a new contract in Q4, the solicitation needs to drop by April or May at the latest — sometimes earlier for complex acquisitions.

Pre-solicitation notices and draft RFPs circulate in Q3, giving industry a preview of requirements and additional opportunity to comment. If you are tracking an opportunity that has been in the pipeline, this is when it surfaces as a live solicitation. Proposal resources — writers, pricing specialists, subject-matter experts — are in highest demand during Q3. Do not wait until you receive the final RFP to start assembling your team.

Q4 (July – September): The Spending Rush

Q4 is when the "use it or lose it" dynamic takes full effect. Federal appropriations law requires that unspent funds be returned to the Treasury at fiscal year-end (with limited exceptions for multi-year or no-year appropriations). Program managers and contracting officers who have budget remaining must obligate it before September 30 or lose it permanently.

The result: contract awards surge. Sole-source justifications increase in frequency as agencies look for ways to move quickly. Simplified acquisitions and task orders under existing vehicles are processed at high volume. GovConToday users consistently see 30–50% more award notices in August and September compared to Q1. If you hold positions on IDIQs or GWACs, your Q4 task order responsiveness is often the difference between a strong year and an exceptional one.

Continuing Resolutions — What They Mean for You

A Continuing Resolution funds the government at prior-year levels when Congress does not pass appropriations bills on time. CRs are now more the norm than the exception — Congress has passed full-year appropriations on time only a handful of times in the past two decades.

For contractors, CRs create real friction:

• New programs cannot start. If an agency received new funding for a program in the current-year budget, a CR restricts that program from launching until full appropriations are enacted.
• Award values are capped. Agencies operating under a CR typically cannot award contracts at the full annual value — they may be limited to a pro-rated portion of the anticipated annual spend.
• Competitions are delayed. Even solicitations that were in process may be paused if award was contingent on new-year funding that a CR has not released.

The strategic response to a CR is counterintuitive: do not slow down. Use CR periods to aggressively build your pipeline for when funding opens up. Contractors who stay visible and responsive during a CR are positioned to move fast when appropriations land — typically in January or February.

In rare cases, Congress fails to pass either a full-year bill or a CR, triggering a government shutdown. Shutdowns halt most non-essential contracting activity and are disruptive for prime and sub contractors alike. Monitor the congressional budget process in late September — the weeks before October 1 are when shutdown risk is highest.

How to Use the Fiscal Calendar Strategically

Most small businesses in government contracting treat the fiscal year as background noise. The contractors who win consistently use it as a planning tool. Here is how to build the fiscal calendar into your business development cadence.

• Q1–Q2 positioning: Attend agency industry days, respond to all relevant Sources Sought and RFI notices, and schedule capability briefings with contracting officers in your target agencies. This is your relationship-building window. The contracting officer who knows your firm in January is far more likely to invite you to bid in April.
• Q3 execution: This is your highest-leverage period. Assign proposal resources before RFPs drop. Dedicate writing capacity. Track SAM.gov daily for new solicitations in your NAICS codes. Pre-proposal conferences are often held in Q3 — attend every one that is relevant, because the questions asked (and answered) at those events shape winning proposals.
• Q4 opportunism: If you hold positions on GWAC, IDIQ, or BPA vehicles, this is where those investments pay off. Task orders in Q4 can be processed in days. Have a rapid-response process for task orders — if your standard proposal cycle takes six weeks, you will miss Q4 opportunities that close in ten days.
• Year-round intelligence: Monitor agency budget justifications and actual spend data on USASpending.gov. Agencies that are increasing spend in your NAICS codes are building pipeline for future awards. Agencies cutting spend are signaling contraction. This kind of market intelligence informs where to invest your business development time twelve months in advance.

FY2026 Dates to Know

If you are planning your government contracting strategy for the current fiscal year, these are the dates that matter:

• FY2026 start: October 1, 2025
• Q1 FY2026: October 1 – December 31, 2025 (highest CR risk window)
• Q2 FY2026: January 1 – March 31, 2026 (Sources Sought peak)
• Q3 FY2026: April 1 – June 30, 2026 (peak solicitation season — you are here now)
• Q4 FY2026: July 1 – September 30, 2026 (spending rush)
• FY2026 end: September 30, 2026

If you are reading this in April 2026, you are at the opening of Q3 — the single most important period to be tracking solicitations actively. Opportunities published now will close in June and July, with awards made in Q4. This is not the time to take your foot off the pedal.

How GovConToday Helps You Track the Cycle

The fiscal year calendar is only useful if you have the visibility to act on it. GovConToday is built around the procurement cycle:

• Daily opportunity feed: Solicitation volume in your NAICS codes updates every day, so you can see the seasonal patterns in real time and adjust your pursuit pace accordingly.
• Pre-Q3 alerts: Set up your NAICS code preferences before April so you have a baseline established when solicitation volume peaks. You do not want to be configuring your alerts in the middle of peak season.
• Award notices: Award data in your NAICS codes shows who is winning Q4 contracts in your space — the agencies spending, the dollar values, and the awardees. This is the intelligence layer that turns the fiscal calendar from abstract knowledge into a concrete competitive advantage.

To act on Q2 Sources Sought notices, see how to respond to a Sources Sought notice.

Register on SAM.gov before Q1 — SAM.gov registration guide.

Understanding your NAICS codes is essential for tracking the right solicitations — NAICS codes guide.