On January 1, most businesses close the books on one year and open another. The federal government does not. Its fiscal year runs from October 1 through September 30, and it is named for the calendar year in which it ends. So fiscal year 2027, for example, begins on October 1, 2026.
For contractors, this calendar shapes when agencies plan purchases, when money becomes available and when awards tend to cluster.
A short history
The federal fiscal year has not always started in October. For many years it began on July 1. The Congressional Budget and Impoundment Control Act of 1974 moved the start date to October 1, giving Congress more time to work through the budget process. The change took effect in the late 1970s, and the October start has been in place ever since.
The four quarters, from a contractor’s view
- Q1 (October to December): The year begins, often under a continuing resolution if full-year appropriations are not yet enacted. Agencies may be cautious about starting new work.
- Q2 (January to March): Planning activity increases. Agencies refine acquisition plans, release market research notices and prepare solicitations for the year.
- Q3 (April to June): More solicitations go out and competitions move forward, especially once funding is settled.
- Q4 (July to September): Often the busiest stretch for awards as agencies obligate remaining funds before they expire. Many contractors call it year-end buying season.
These patterns are general tendencies, not rules. Each agency and program has its own rhythm, and the timing of appropriations can shift everything.
Why funds expire
Many appropriations are available for obligation only for a limited period, often a single fiscal year. If an agency does not obligate those funds by the deadline, it generally cannot use them for new obligations. This is one reason fourth-quarter activity can be intense. Other appropriations are available for multiple years or until spent, so not every program feels the same pressure.
What January means for contractors
By January, an agency is a quarter into its fiscal year. If full-year funding has been enacted, programs may be moving forward. If the government is still under a continuing resolution, agencies may be holding back on new starts. Either way, Q2 is a strong time for market research, relationship building and positioning for the solicitations that will drive Q3 and Q4 awards.
Using the fiscal calendar in your planning
Try mapping your business development activities to the government’s quarters rather than your own. Schedule capability briefings and responses to sources sought notices in the early quarters. Prepare proposal templates, past performance write-ups and pricing data before summer. Make sure your team has capacity in late summer, when quick-turn requests and year-end awards often arrive.
Reading the fiscal calendar will not tell you exactly when a contract will be awarded, but it will help you be ready when it is.