How Big Is the Federal RFP Market?

Federal government procurement accounts for 25.0% of all RFPs in Settle's database. Out of 7,569 listings analyzed between October 2025 and February 2026, 1,892 reference federal agencies, procurement regulations, or government-specific processes. This makes the federal government the single largest buyer category in the dataset, larger than any individual industry vertical. For companies that serve the public sector, these numbers confirm what many already suspect: federal contracting is not a niche market. It is the market.

Within the federal landscape, two agencies dominate. The Department of Veterans Affairs (VA) appears in 171 RFPs, making it the most active single agency in our dataset. The Department of Defense (DoD) follows closely with 156 mentions across Army, Navy, Air Force, and defense-wide procurements. The Army Corps of Engineers (USACE) accounts for 47, followed by GSA (19), NASA (17), FAA (14), IRS (12), and NIH (11). Understanding which agencies are buying, and what they need, is the first step toward building a targeted federal pipeline.

What Types of Contracts Are Being Awarded?

Federal procurement uses several distinct solicitation types, each with different requirements and competitive dynamics. In our dataset, Requests for Information (RFIs) are the most common at 6.2% of all listings (472 RFPs). These are market research tools where agencies gauge industry capabilities before issuing a formal solicitation. Requests for Proposal (RFPs) account for 4.0% (299 listings), while Sources Sought notices represent 1.9% (144) and Requests for Quotation (RFQs) make up 0.9% (71). Invitations for Bid (IFBs), used primarily for construction, appear in 34 listings.

Sole source awards are a particularly interesting segment. 2.3% of all RFPs in our dataset (173 listings) are sole source procurements where the agency intends to award without competition. Healthcare IT has the highest sole source rate at 8.5%, reflecting the specialized nature of medical systems integration. Software follows at 3.9%. For incumbent vendors, sole source notices are opportunities to defend existing contracts. For new entrants, they signal which markets have limited competition and may be ripe for disruption in future recompetes.

Where Is Federal Procurement Concentrated?

Washington DC has 263 RFPs per million residents, making it the highest-density procurement market in the United States by an enormous margin. Maryland ranks second at 39.8 RFPs per million, followed by Colorado at 30.2 and Virginia at 24.6. These four jurisdictions form the core of the federal procurement corridor, and together they account for a disproportionate share of all government RFP activity.

The concentration is not just geographic. It is also structural. The DC-Maryland-Virginia triangle houses the headquarters of nearly every major federal agency, along with the contractors, consultants, and systems integrators that serve them. Colorado's high ranking reflects the concentration of military installations and defense contractors along the Front Range. For companies considering where to establish a federal sales presence, these density metrics are more useful than raw volume counts.

What Does the Federal Government Buy?

Construction is the dominant federal procurement category, driven by the VA's ongoing infrastructure modernization program and USACE civil works projects. Federal construction RFPs frequently mention multi-year timelines, budgets between $10 million and $50 million, and requirements for Service-Disabled Veteran-Owned Small Business (SDVOSB) participation. Software and IT Services form the second major federal cluster, with the IRS, DHS, and DoD issuing significant procurements for enterprise platforms, cybersecurity solutions, and data management systems.

The compliance landscape for federal proposals is substantial. 3.1% of all RFPs reference the Federal Acquisition Regulation (FAR), 2.5% cite specific NAICS codes, and 1.0% mention SAM.gov registration requirements. The most common NAICS codes in federal RFPs are 236220 (Commercial and Institutional Building Construction) with 17 appearances, 541519 (Other Computer Related Services) with 13, and 513210 (Software Publishers) with 8. These codes directly map to the construction and IT verticals that dominate federal spending.

How to Compete in Federal Procurement

Federal RFPs reward preparation and compliance above all else. The median turnaround for federal opportunities in our dataset is consistent with the overall 24-day average, but the compliance burden is significantly higher. Proposals must address specific FAR clauses, demonstrate relevant past performance, meet small business participation requirements, and provide detailed cost breakdowns. Missing any of these elements can result in disqualification.

For teams new to federal contracting, three steps accelerate readiness. First, ensure your SAM.gov registration is current and your Unique Entity Identifier (UEI) is active. Second, build a library of compliance-ready boilerplate covering FAR representations and certifications, past performance narratives, and small business subcontracting plans. Third, use automated discovery tools to monitor agency-specific procurement portals in real time. Federal opportunities move quickly, and the Sources Sought and pre-solicitation notices that precede formal RFPs are critical intelligence that shapes your competitive positioning months before a contract is awarded.

Frequently Asked Questions

What percentage of RFPs come from the federal government?

Based on our analysis of 7,569 RFPs, 25.0% (1,892 listings) reference federal agencies or government procurement processes. The Department of Veterans Affairs and Department of Defense are the two most active agencies, with 171 and 156 RFPs respectively.

What is a Sources Sought notice?

A Sources Sought notice is a market research tool used by federal agencies to identify potential vendors before issuing a formal solicitation. It does not commit the agency to making a purchase, but responding to Sources Sought notices positions your company for future competitive procurements and demonstrates your capabilities to the contracting office. In our dataset, Sources Sought notices represent 1.9% of all listings.

What is the most common NAICS code in federal RFPs?

The most common NAICS code in our dataset is 236220, Commercial and Institutional Building Construction, appearing in 17 federal RFPs. This reflects the significant volume of VA and USACE construction projects. For IT-focused companies, 541519 (Other Computer Related Services) and 513210 (Software Publishers) are the most relevant codes.