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FY 2026 Budget Outlook: AEC Market Trends

From defense cuts to major infrastructure boosts, this report breaks down the FY 2026 federal budget request for AEC services, helping contractors align with agency priorities, uncover growth opportunities, and stay ahead in a shifting market.

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Where Federal AEC Dollars Are Headed in FY 2026

Deltek’s latest AEC market outlook reveals how the FY 2026 budget request is reshaping the federal architecture, engineering and construction landscape. Inside, you’ll find:

Top Agency Budgets: See which departments are increasing AEC investments, like VA, DHS and DOT, and where cuts are concentrated.
Defense Downshift: Understand the 14% drop in DoD AEC funding and how it impacts Army and Navy contractors.
Infrastructure Priorities: Explore major funding boosts for FAA facilities, VA medical centers, and border wall construction.
Policy Watchpoints: Stay informed on permitting reform, tariff shifts, and potential IIJA budget rescissions.
Strategic Guidance: Get expert insights to help your firm navigate funding shifts and win more federal AEC work.

“Since becoming a GovWin IQ member, we realized very quickly why Deltek's known as the 'gold standard' for research and tracking of the government market.”

Tomette Herring, Sr. Business Development Director, DCS

Key Takeaways to Guide Your FY 2026 AEC Strategy

Infrastructure Momentum

DOT and VA are driving major increases in AEC funding—up to 66% and $3B respectively—creating new opportunities for contractors.

DoD Budget Cuts

AEC funding at the Department of Defense is down 14%, with the Army and Navy seeing the largest reductions in spend.

Policy & Permitting Shifts

New executive orders and tariff policies are reshaping how and where projects get approved. Contractors must stay agile and informed.

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