4 US Defense Procurement Trends to Look Out for in 2026
Stay ahead in U.S. defense contracting with this essential 2026 guide. This eBook outlines four critical trends, including CMMC 2.0 enforcement, evolving software acquisition pathways, data-driven performance contracting, and AI-powered proposal development, and provides practical strategies for proposal managers and sales leaders to boost compliance, streamline proposals, and win more contracts.
4 US Defense Procurement Trends to Look Out for in 2026
Four trends set to impact US defense acquisition in 2026 and practical advice for bid managers and sales leaders on how to stay ahead of the changes.
Introduction
In this guide, we outline four key trends shaping bid and proposal strategy in the US defense market in 2026, and offer practical steps you can take to increase your chances of winning a share of the opportunities.
2026 represents a pivotal year for United States defense acquisition. A blend of modernization pressure, growing regulatory enforcement, and technology acceleration, mean contractors face both extraordinary opportunity and heightened risks.
The urgency to modernize is driven by a multitude factors. There’s the perceived threat from China. There are the lessons learnt from the Ukraine conflict around rapid adaptation, autonomy, attritable systems, and near-real-time innovation.
And Defense Secretary Hegseth has put speed to capability delivery as the Department’s organizing principle. This will accelerate changes happening to the way the Department of Defense (DoD) and others acquire goods and services.
The modernization drive is backed by a 2026 budget of $924.7bn for national defense, of which $878.7bn is for the DoD. Priorities include artificial intelligence (AI), cybersecurity, and uncrewed aircraft systems (UAS).
At the same time, compliance burden for contractors is at an all-time high. CMMC 2.0 third-party certification will be mandatory from November 2026 for applicable solicitations.
Section 805 of the FY 2024 National Defense Authorization Act (NDAA) introduces additional acquisition and supply chain prohibitions, the first of which come into force at the end of June 2026.
And while outcome-based contracting will encourage suppliers to offer innovative solutions, it will also result in a greater onus on contractors to collect objective performance data.
The acquisition landscape itself is shifting too. Other Transaction Agreements (OTAs) and the Middle Tier of Acquisition (MTA) pathway are growing in popularity, driving increased pace. The DoD’s OTA obligations in FY 2024, for example, totaled more than $18bn – a 10x increase compared to FY 2016. FAR has also been revised. Suppliers must therefore be adept at navigating a variety of pathway-specific compliance and proposal structures to win contracts.
Meanwhile, despite the change of administration, there has been policy continuity in certain areas. The Replicator Initiative, for example, continues and retains funding.
The rollout of CMMC 2.0 enforcement has also continued. And bipartisan consensus persists around issues such as supply chain security and counter-China legislation. For defense contractors in the United States, these significant funding levels, modernization drive, and complex compliance requirements mean a blend of opportunity and risk. Those who are able to streamline their proposal processes, demonstrate verifiable compliance, and align with the various acquisition pathways, will be in pole position to lead the market.
TREND 1
CMMC 2.0 and enhanced cyber requirements
Aspiring defense contractors must ensure they’re on the road to third-party certification.
With defense capabilities increasingly reliant on software systems, and cyberattacks on the defense industrial base on the rise, emphasis on cybersecurity is growing significantly.
As of November 2025, the first phase of CMMC 2.0 enforcement – self-assessment to level one or two for applicable solicitations – took effect.
The second phase will require contractors to achieve third-party certification to CMMC 2.0 level two if they’re to be considered for certain solicitations. This is due to begin on November 10th 2026, though the DoD may implement certification requirements for selected procurements before this date.
Systems you use to bid for or deliver defense programs will be assessed as part of the audit, to ensure they meet the required standards. Defense contractors must therefore be assessing their tools, ways of working, and supply chains today.
Any applications or partners that could derail their ability to achieve CMMC 2.0 level two certification need to be replaced.
| How to Win | |
|---|---|
| How to win | To achieve your CMMC 2.0 level two certification, you’ll need to demonstrate that the software platforms you’re using to win or deliver DoD contracts meet stringent security standards. Software that has a FedRAMP High ATO provides important assurances. This signifies that the supplier offers environments where you can work securely, in compliance with government regulations, without concern that data could flow out of the system. This is particularly important for applications that use large language models, as you’ll need to be sure your data isn’t used for training. |
| Get your CMMC 2.0 level two certification as soon as possible | While November 2026 may seem a long time into the future, CMMC 2.0 level two certification typically takes at least seven months. Moreover, with the DoD already having the ability to request level two compliance, those still at level one could already be excluded from some opportunities. If you haven’t already started the level two certification process, now’s the time to contact your CMMC third-party assessment organization (C3PAO), to get the ball rolling. |
| Embed your cybersecurity posture in your proposals | Meeting the DoD’s growing compliance requirements is going to require increasingly detailed proposal responses. You’ll need to clearly and convincingly demonstrate how you’ll safeguard sensitive data, potentially in greater depth than you have done in the past. To assist your proposal writers, seek out compliant, generative AI-enabled software that can securely store information about your cybersecurity processes, surface relevant details, and produce high-quality responses aligned to the requirements in the RFP. |
TREND 2
Software acquisition transformation
The way the Government buys software for the military is changing, with expedited acquisition pathways to support innovation.
The drive to put fewer human soldiers on the front lines, and develop lower-cost and higher-flexibility military systems in response to rapidly changing threats, is resulting in shifting acquisition patterns to encourage innovation.
Other Transaction Agreement (OTA) is a contracting mechanism that’s becoming particularly popular in the DoD, as evidenced by the figures mentioned in the introduction. OTAs promote rapid research, prototype of production projects outside of the FAR process. Their rise looks set to continue, following the Secretary of Defense’s mandate of OTAs as one of two preferred solicitation and award approaches for software acquisition. This further accelerates the DoD’s shift towards software-defined defense capabilities.
Meanwhile, the Middle Tier of Acquisition (MTA) is a specific acquisition pathway under the DoD’s Adaptive Acquisition Framework, designed to rapidly prototype or field military capabilities. MTA programs aim to deliver outcomes within five years.
Unlike OTA, MTA is not a contracting mechanism, but is a streamlined acquisition pathway that can use various contracting approaches, including OTA. Data on the total value of MTA pathway spending isn’t easily available, but the Government Accountability Office (GAO) reported in June 2025 that the DoD has plans to invest $44.5bn across 20 of the most expensive MTA programs.
FAR-based contracting will also remain prominent. This too has seen changes when it comes to software acquisition, with updates to parts 12 and 13 designed to streamline acquisitions and encourage innovation.
And in addition to opportunities that are contracted through FAR in their entirety, some OTA contracts may transition to FAR-based production contracts once theefficacy of prototypes has been proven.
All of this means that current and aspiring defense contractors must monitor multiple sources of information for opportunities, and become familiar with the differing requirements, mechanics, and speeds of the various acquisition pathways
| How to Win | |
|---|---|
| Join OTA consortia | A significant portion of OTA opportunities are let through so-called consortia. These are partnerships between the Government, private businesses, and research organizations, set up to drive innovation in a specific domain. To be awarded OTA work through a consortium, your business needs to be on that consortium in the first place. There is no centralized list of OTA consortia, so suppliers should monitor SAM.gov solicitation notices, agencyspecific OTA or innovation program websites, and announcements from consortium management organizations. Third-party directories, including Existing OTA Consortia from Mitre, are another useful resource, though they may not immediately reflect newly launched consortia. When you find consortia you wish to join, contact that consortium manager to discuss your options, as membership requirements vary. Lastly, note that not all consortia will be defense-related. |
| How to Win | |
|---|---|
| Build volume response capability | OTAs bring a new set of challenges for contractors. If you’re a member of multiple consortia, you’ll typically have a large number of opportunities to respond to. And instead of having months for each response, as you typically would under the FAR process, OTAs are characterized by their accelerated pace, including during acquisition. While response windows will vary by agency and complexity, you may have as little as two weeks in some situations. Smarter working for your proposal teams is going to be essential, with software that not only unlocks efficiency, but also higher-quality responses to help you stand out in a crowded market. Look for agentic capabilities that can curate responses that simultaneously demonstrate technical excellence, align with Government/consortium needs, and differentiate from the competition by showcasing innovation. |
| Flexibility | Different contract types and acquisition pathways will require different types and speeds of response. OTA opportunities, for example, may require you to produce white papers, prototype proposals, and responses to broad agency announcements or research announcements. Some opportunities will come with rigid expectations around response length and structure. Others will be more flexible. Some will be requirementsbased, but a growing number will be outcome-driven, demanding very different types of response. Proposal management software that can accommodate a wide variety of response types and processes will liberate your teams from spending hours on menial formatting and document management tasks, so that they can focus more of their time on delivering quality responses. |
TREND 3
Data in the spotlight
Outcome and performance-based contracting mean the focus on objective data is growing.
With the US Government shifting focus to performanceand outcome-based contracting in the defense space, the collection of objective data by contractors has gained new importance.
The DoD’s 2025 Acquisition Transformation Strategy sets out requirements for new portfolio scorecards and access to real-time performance data, to enable effective monitoring of defense programs. The onus to supply this data is likely to fall, at least in part, on defense contractors. The Strategy’s focus on data-driven acquisition will also mean more emphasis on objective, evidence-backed statements in bidders’ proposals.
This is happening alongside forthcoming changes to the Contractor Performance Assessment Reporting System (CPARS). As part of the FY 2026 NDAA, currently passing through Congress, Section 867 seeks to eliminate subjective performance ratings, and replace them with a standardized, data-driven scoring system.
This will primarily focus on negative events associated with a contractor’s performance of government contracts, or in relation to government interests. Subcontractor performance will also be in scope. These reports will be used by procurement teams when selecting contractors – and where no negative performance items exist, contractors will be assessed based on price, technical capability, and other relevant areas.
Alongside the CRP requirements, expect to be asked for more detail around your wider environmental, social, and governance (ESG) commitments, including areas such as biodiversity, waste reduction and resource efficiency.
As with your social value responses, general corporate social responsibility (CSR) statements or certificates are no longer sufficient. Winning bidders must show demonstrable action around ESG, both for their own business, and their supply chain partners.
This means, of course, that environmental considerations are now an essential part of the due diligence those suppliers need to go through.
| How to Win | |
|---|---|
| Collect measurable data throughout delivery | Gathering performance data throughout your delivery of any defense project will be essential, to demonstrate that you’re on track to meet the outcomes specified in the contract. If you’re not already, ensure security-compliant datacollection and processing capabilities are part of your products and services, so that you can report on your performance in a timely manner. Although this data may not feed directly into your CPARS, it will be a powerful way of demonstrating credibility of your technical solutions in future proposals. |
| Layer data into your proposals | With acquisition teams looking for objective data on which to base supplier choices, your proposal teams must ensure data aligned to the RFP requirements is front and center. The data you collect as part of your contract performance needs to be available to your proposal teams, including via any proposal writing software they’re using. Can these tools surface prior performance metrics, and generate data-backed narratives to strengthen the messaging around your technical solution, aligned to the outcomes the acquiring team is seeking? Using data associated with defense contract performance will of course require appropriate security safeguards, particularly where proposal software using large language models is involved. A FedRAMP High ATO establishes the security baseline required to pursue DoD Impact Level 5 (IL5) authorization, subject to additional DoD controls and DISA approval. |
| Visualize data where appropriate | As the saying goes, a picture is worth a thousand words. Displaying data visually can be a powerful way to convey your messaging in proposals. Modern proposal teams need to be adept at working with data, and different visualization techniques. Provide training and access to appropriate software to enable them to quickly create compelling visualizations. AI-enabled proposal writing software can support them in this, by generating tabular data, or by recommending ways in which certain datasets could be visualized most effectively |
TREND 4
AI Transformation
The Government’s receptive stance towards responsible AI brings new opportunities to use it across your operations, including proposal development
The US Government is showing a new-found receptiveness to secure, responsible AI solutions. The AI Rapid Capabilities Cell (AI RCC), for example, which sits under the DoD’s Chief Digital and Artificial Intelligence Office, is seeking to accelerate and scale efforts around the use of AI across the many facets of DoD operations.
This positive stance on AI doesn’t just apply to the way you might now be delivering defense projects. It also brings opportunities to adopt AI across your wider operations, including the tools you use to win those Government contracts.
Advancements in AI-enabled proposal writing continue at pace, transforming the way teams are working. Where once the focus of generative AI was to get to first drafts faster, software such as AutogenAI is now driving an increase in response quality, while also supporting teams throughout the proposal journey.
Many businesses are finding this uptick in quality to be game-changing. Several AutogenAI customers have achieved 100% scores on buyer-evaluated technical responses developed using the software.
This demonstrates how AI-assisted drafting can materially raise the quality of proposal submissions. Key to enabling this are agentic capabilities, which can curate responses that simultaneously demonstrate technical excellence, align with customer needs, and differentiate from the competition.
| How to Win | |
|---|---|
| Build AI into your end-to-end proposal process | As we touched on above, generative AI in proposal writing is no longer about faster first drafts. Modern agentic tools can increase response quality and offer value at every stage of the proposal journey. Seek out software that can support with everything from capture support to proposal management, market and competitor research, writing, and reviewing. Generative AI can also be a powerful innovation partner, helping your proposal teams surface new ideas and approaches, in response to DoD requests. In particular, look for software that uses semantic. intelligence and natural language understanding in the way it parses previous responses and other information stored in its content library, and turns this into tailored responses to the RFP’s questions. This is where you’ll really see the benefit in the quality of the proposals you’re able to create. |
Summary
Set yourself up for success in 2026 by investing in your security, compliance, data, and AI capabilities now.
With substantial change happening in US defense acquisition, traditional and non-traditional contractors must adapt fast to leverage the opportunities presented by the DoD’s substantial 2026 budget.
The rollout of CMMC 2.0 enforcement will mean thirdparty certification will be high on the agenda for many defense contractors this year. In parallel, adaptation to the increasingly diverse acquisition patterns will be essential, with proposal teams required to sharpen their ways of working to remain competitive.
Outcome- and performance-based contracting adds a further layer of change, with greater onus on suppliers to collect data and align it to outcomes specified in RFPs.
Thankfully, advances in AI, and the Government’s newfound enthusiasm for it, bring opportunities to overhaul the end-to-end proposal development process, from capture to submission.
Importantly, organizations using tools such as AutogenAI are finding that the software drives an increase in response quality, as well as speeds.
With many new defense opportunities coming forward over the next 12 months, winning your share is going to demand teamwork. Empowering departments across your business – from infosec and compliance to proposals and project delivery – with the right skills and tools will set you on the road to success in 2026 and beyond.
AutogenAI Federal
An AI Linguistic Engine Purpose-Built for Government Contracting
AutogenAI is an AI-powered proposal engine trusted by federal contractors to write more compelling, evaluator-focused proposals. Developed by leading AI practitioners and validated by experienced GovCon proposal professionals, AutogenAI Federal is designed to support the full federal proposal lifecycle, helping teams respond accurately to requirements while strengthening clarity, structure, and scoring alignment.
Unlike acquisition lifecycle platforms or generic AI tools, AutogenAI is purpose-built as a linguistic engineering platform. It orchestrates multiple large language models to translate complex solicitation requirements into persuasive, compliant narratives—engineering proposal language that aligns precisely with how federal evaluators assess compliance, risk, and value. We don’t just generate text; we engineer winning language.
With FedRAMP High authorization via Palantir’s FedStart program anticipated in Q1 2026, AutogenAI Federal is designed to meet the security baseline required for the most demanding federal proposal environments—enabling sophisticated proposal automation for mission-critical competitions, subject to applicable agency authorizations.
Trusted by more than 200 enterprise organizations, including major defense contractors and federal systems integrators, AutogenAI delivers measurable impact in the federal marketplace.
Independent analysis of FY23/24 results shows AutogenAI users increasing revenue by 12.6%, while comparable non-users experienced a 7.1% decline
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