Two years ago the Department of Homeland Security obligated $431 million on construction in February through May. In the same four months of 2026 it obligated $15.3 billion.
That is not growth. That is a department acquiring an entirely new function, and it happened inside eighteen months.
The firm that took the largest single share of it, Barnard Construction, does not appear anywhere in the hundred largest federal construction recipients of two years ago. It is now the fifth-largest recipient of federal contract dollars of any kind, ahead of Northrop Grumman and Huntington Ingalls.
If you bid federal construction work and your target list still looks the way it did in 2024, it is pointed at the wrong agency, in the wrong state, and quite possibly at the wrong prime.
We pulled the whole picture apart in a data study built on the federal award record — agency by agency, firm by firm, state by state, with the methodology written out. This is the short version, aimed at the practical question: what does a bidder do differently now?
Nothing shrank. Everything got bigger, and construction got bigger fastest
Start by discarding the assumption underneath most conversations about federal spending since January 2025. Contract obligations did not fall. They rose 40% — $224.6B to $313.7B across matched February–May windows.
Federal construction rose faster still: $12.8B to $34.0B, a 2.7-fold increase.
And the growth is not one agency's story, even though one agency dominates the headline:
- Homeland Security, 3.5× across all sectors — $7.4B to $26.2B.
- Veterans Affairs +52%, Transportation +34%, Energy +20%.
- Defense +46%, and its construction spending alone up 70%, from $8.7B to $14.7B. The Pentagon did not lose this race; it was simply outrun from a much smaller base.
- USAID, −76%. The Small Business Administration's own contracting went net negative.
That Defense number deserves a flag, because we got it wrong the first time we published this. Defense and the Army Corps of Engineers withhold their contract data for 90 days for operational security, so any window running closer to the present than that shows almost no defence activity and reads as a collapse. It isn't one. Every window here now stops where defence has actually reported. The methodology note explains it in full.
Five of the ten largest construction contractors are new
This is the part that should change a teaming conversation.
Of the ten largest federal construction recipients in the most recent window, five do not appear anywhere in the hundred largest of two years ago:
| Recipient | Feb–May 2026 | Two years earlier |
|---|---|---|
| Barnard Construction | $5.47B | outside the top 100 |
| Fisher Sand & Gravel | $3.83B | outside the top 100 |
| Southwest Valley Constructors | $2.25B | outside the top 100 |
| Spencer Construction | $2.10B | outside the top 100 |
| Cochrane USA | $0.64B | outside the top 100 |
Others did not arrive so much as detonate. Thalle Construction went from $30M and 69th place to $1.74B and 5th — a 58-fold increase in two years.
The useful read is not that these are lucky firms. It is that the federal construction prime list is not a closed shop right now. A list that turns over by half at the top in two years is a list a serious bidder can still get onto — through a prime seat on the right vehicle, or as a sub to a firm that has just multiplied its backlog and cannot possibly self-perform all of it.
Where the work physically is
Texas went from $16.8B to $50.2B. Arizona went from $3.7B to $11.5B — more than tripling. Virginia added $12.0B, California $6.9B, Florida $5.3B, Washington $5.0B.
What is striking is the other side of the ledger: there barely is one. The largest decline of any state is Wisconsin at −$1.3B. The District of Columbia is down $0.4B. When the total rises this much, the question stops being who lost and becomes who captured the growth.
One caveat that matters if you plan around this: a federal award is recorded where the source says the work happens, which is not always where it happens. The bias is real and we describe it on our coverage map. Directionally, though, a $33B move into Texas is not a data artefact.
Small business: the doors held, the share did not
Here is the number nobody quotes correctly, including us in an earlier version of this post.
Small-business set-aside obligations went up — $17.3B to $18.7B, a rise of 8%. Anyone telling you the set-aside pipeline collapsed in absolute terms is wrong.
But total obligations rose 40% over the same window. So as a share of all contract dollars, set-asides fell from 7.69% to 5.96%.
That is the real squeeze, and it is arguably worse than a headline decline would have been. The small-business programme did not shrink — it simply did not participate in the expansion. Nearly a quarter of the share it held two years ago is gone, in a period when the money on the table grew by almost ninety billion dollars.
Meanwhile the opportunity count has not collapsed. Of the federal solicitations open right now, thousands are explicitly reserved for small business — total small-business set-asides, SDVOSB, WOSB, HUBZone, 8(a) and tribal programmes. Among the notices that publish a set-aside status at all, the clear majority are reserved.
So the doors are still there. What has thinned is the money behind each one relative to everything else on the table. Bid selection matters more than it did: chasing the same number of set-asides while the unreserved market grows 40% is how a small firm burns a year of proposal capacity for a shrinking slice.
What to actually do
- Re-point the target list at the growth. DHS above all, then VA, Transportation and Energy. And do not write off DoD — its construction spending grew 70%, which the first version of this analysis missed entirely.
- Look at the newcomers as teaming partners, not just competitors. Firms that went from nothing to billions in eighteen months have a capacity problem, and capacity problems are subcontracts.
- Follow the work geographically. Texas and Arizona are where the construction dollars landed. Registration, bonding and labour in those states is a concrete, boring, decisive advantage.
- Get more selective inside the set-aside pipeline. The reserved work is still there and still growing; it is growing far slower than everything around it. Qualification is no longer the binding constraint — choosing well is.
The full analysis, with every figure, chart and caveat, is in the data study. Every number in it comes from USAspending.gov and can be checked against the same source.
If you would rather be told when matching work opens than go looking for it, the tender portal is free and does not need an account.
