Uptime Report Research · Spending Ledger

Federal IT Spending 2026: Where IT Services Contract Dollars Went, and Why the Headline Number Misleads

Federal IT spending 2026 looks like a decline if you add up the raw numbers: IT services contract obligations of $57.4B, down 4% from FY2025. That reading is wrong. Defense Department obligations for the final quarter of the fiscal year have not yet posted to USAspending.gov. Measured like for like, spending grew, and civilian agencies set a record.

Eight years of IT services contract obligations

Contract obligations (award types A to D) under NAICS 541512, 541513, and 541519, by federal fiscal year (October to September). FY2026 as of early October 2026.

Obligations grew from $43.6B in FY2019 to $60.0B in FY2025, a 38% increase in nominal dollars. The FY2024 total of $61.9B remains the high point in this series.

How big is the Defense reporting gap?

Defense obligations for July to September 2026 total $0.2B in the data, against $7.8B for the same quarter of 2025. Civilian agencies show no such gap: their July to September 2026 obligations are present at normal levels. Comparing the first three quarters only, Defense obligations rose 9.2% and civilian obligations rose 8.1%.

The civilian full-year figure can be compared directly. Civilian agencies obligated $43.9B for IT services in FY2026, up 9.6% from $40.0B, the highest in the series.

The seven largest recipients took $14.0B in FY2025, 23% of all obligations under these codes. FY2026 recipient figures are incomplete for the same reason as the Defense total.

Which kind of IT services is growing?

NAICS 541513, computer facilities management, is the code closest to outsourced infrastructure management, the work most managed service providers do. It is also the smallest of the three in federal contracting.

What this means for MSPs selling to government

Federal IT services demand did not shrink in FY2026, and civilian agencies spent more than in any prior year. The top seven contractors hold 23% of obligations under these codes, which leaves roughly 77% spread across all other prime recipients. Subcontract dollars flowing down from the large primes are not counted here. Watch the Defense figures as the delayed quarter posts; the like-for-like trend suggests the final FY2026 total will be close to or above FY2025.

Frequently asked questions

How much does the federal government spend on IT services?

Contract obligations under the three computer services NAICS codes (541512, 541513, 541519) totaled $60.0B in fiscal year 2025, according to USAspending.gov. The peak year was FY2024 at $61.9B.

Did federal IT spending fall in 2026?

Not on a like-for-like basis. The raw FY2026 total of $57.4B is 4% below FY2025, but Department of Defense obligations for July to September 2026 show only $0.2B in the data versus $7.8B a year earlier, a reporting lag. Comparing October to June in both years, obligations rose 8.5%.

Which agency spends the most on IT services contracts?

The Department of Defense, with $20.0B in FY2025, followed by Veterans Affairs ($6.5B), GSA ($6.0B), and HHS ($5.4B).

Who are the largest federal IT services contractors?

In FY2025, by obligations under these NAICS codes: Accenture Federal Services LLC ($2.8B), General Dynamics Information Technology, Inc. ($2.4B), and Leidos, Inc. ($2.2B).

Why is Defense contract data delayed?

The data itself shows it: Defense obligations for the last quarter of FY2026 are nearly absent from USAspending as of early October 2026, while civilian agencies’ September obligations are present. Any FY2026 comparison that includes Defense should be redone once the delayed records post.

Methodology

References

1. USAspending.gov, Advanced Search. Accessed October 2026.
2. USAspending API endpoints. Accessed October 2026.
3. U.S. Census Bureau, NAICS 5415 Computer Systems Design and Related Services. Accessed October 2026.