PUBLIC SECTOR FINANCING INSIGHTS

Additional Topics

DoD Network Modernization

One Big Beautiful Bill Act (OBBBA) 

With the passage of the One Big Beautiful Bill Act (OBBBA) fiscal priorities are defined and aligned with expectations for the FY ’26 Federal Budget due in September. What does this mean for Investors? It’s a signal that federal contracting is entering a period of opportunity.

The OBBBA is not the annual spending bill, but rather a blueprint ahead of the next fiscal year Federal Budget. It sets federal priorities according to the Administration’s goals, and 10-year forward-looking agenda. While headlines have focused on reductions to various social programs, overall Federal IT spending is not expected to materially decline, in fact, this bill will unlock billions of dollars for AI, cybersecurity, border technology, and defense IT modernization.

Civilian Agencies and DOD are prioritizing IT modernization, Cyber resilience and AI under this Administration. Notable programs that will drive investment opportunities in the next FY ‘26 include VA’s Electronic Health Records, DHS’s Science and Technology Directorate focused on cybersecurity and AI, Army’s Next Generation Command and Control (NGC2) Network Modernization, and FAA’s Telecom infrastructure modernization and systems upgrades to name a few.

The blueprint is set, and the September federal budget will turn that vision into real dollars. Together, OBBBA and the budget create a high degree of predictability for capital allocation. Within that framework, cybersecurity, digital enforcement, AI infrastructure, and mission-critical IT systems stand out as both protected and growth-oriented areas.

For investors and federal contractors, this is an opportunity to align today’s offerings with updated agency priorities. Agencies are preparing to move quickly once FY ’26 appropriations are finalized, and they will look to existing contract vehicles, proven vendors, and commercially ready solutions to get dollars on contract efficiently.

Positioning investment opportunities now can drive meaningful portfolio growth, as federal IT remains a top priority under this Administration.

Department of Defense Network Modernization

The Department of Defense Chief Information Officer (DOD CIO) is prioritizing Technical Refresh and will look to leasing solutions for Network Modernization as it begins to shape IT priorities in this next Fiscal Year.

The Department of Defense’s operating environments are complex and require a unified and seamless network from the tactical edge to the enterprise. The Department of Defense and components (US Army, US Navy, US Air Force…etc.) require data transport technologies and capabilities that enable rapid decisions thereby ensuring operational advantages against increasingly capable adversarial methods. Technical debt and aging networks pose significant challenges to missions across the globe.

To address technical refresh requirements DOD CIO is exploring better acquisition and technology ownership models. The leasing of routers, switches, and other information technology (IT) equipment or "Hardware as a Service" (HaaS) has the potential to provide the Department and its components the opportunity to leverage existing authorities in leasing IT equipment to accomplish the entire mission.

Be on the lookout for practical efforts and announcements from the Department of Defense that support network infrastructure refresh, and the establishment of leasing agreements to facilitate Hardware as a Service (HaaS). More to come as Four Inc. stands ready to bridge these requirements in FY ’26!