Name: Inside the Air Force: FY 2027 Priorities and How to Compete
Uploaded: 2026-08-13T19:30:50.776Z
Duration: 1 h 3 min 8 s
Description: Inside the Air Force: FY 2027 Priorities and How to Compete

Transcript for "Inside the Air Force: FY 2027 Priorities and How to Compete": Hello, everyone, and thank you for joining us for today's presentation. My name is Alex Galant, and I'm a senior marketing manager here at Deltek. And before we begin, I have a few administrative items to note. For the best webinar experience, please use Google Chrome or Firefox. The audio is gonna be streamed through your computer, so make sure that the volume is turned all the way up. The slides are available right now for download. You can see them in the box up to the right in the docs column, and they will also be sent to you via email within twenty four hours. The recording will also be emailed to you within twenty four hours. If you have any questions, and please feel free to submit them anytime during the presentation, please use the q and a tab and submit them there. You can also, if you're a GovWind subscriber, submit your questions to your dedicated customer success rep. And with that, with the administrative items out of the way, let's go ahead and get started. And thank you, Alex, and welcome everyone to our webinar today inside the air force for f y twenty twenty seven priorities and how to compete. My name is John Sly, and I'm a senior advisor research analyst here at at GovWind at Deltek. And I'm joined by my colleague, Steve Mihalisco, who's a senior principal research analyst within our Federal Information Solutions organization. I'd like to invite you along the way to enter questions, and then we're gonna save some time at the end to get to those. So let's look at where we're gonna head today. First, I'm gonna hand it over in a moment here to Steve to talk about some of the contract spending trends at the air force and space force, and he'll, he'll look at some historical spending and with some ideas of where we might be going. And then he'll also talk about how that translates into some contracting opportunities. He'll hand it back to me, and I'll, I'll take it from there as looking at the FY twenty twenty seven budget outlook, where we see at the Air Force and Space Force, and then we will draw some conclusions and get to your questions. So without further ado, I'm going to, hand it over to Steve to talk about Air Force contracting spending trends. Very good. Thank you so much, John. So, yes, let's turn our attention to contract spending trends across both the Air Force and Space Force. So the key theme, before I even go into there, the key theme will be that what looked like a slowdown in f y twenty five was not necessarily a reduction in long term demand, a slowdown in terms of spending. Instead, what happened was largely kind of the result of budget constraints, procurement delays, some shifting priorities. So as we move into FY '20 or complete FY '26 and kind of see that spending flesh out, and beyond that we're gonna see, we're seeing signs already that spending is rebounding. So so let's take a look at FY, over the past few fiscal years here. So the major trend again is that FY '25. So second from the right there represented a temporary pause in Air Force growth while f y twenty six is currently signaling an acceleration. The larger context here is that, with the fiscal responsibility act, there were some spending caps there. So the air force's budget at that point or in f y twenty five grew by about a percent, which is is basically a decline when you include inflation. So at the time, leadership, you know, had to make some trade offs. There were some slowing procurements, reduced there's some reduction in aircraft purchases, shrinking inventory levels. There was some additional acceptance of risk and force structure. So but, what's important for contractors is that FY twenty six is likely to change the picture and obviously beyond that as well. So the requested air force budget, as John will talk about, has been, increases by quite a bit for FY '26 and '27, and that's driven primarily by modernization investments and also a substantial mandatory funding overlay. So one thing one lesson to mention here is that the share of obligations, which is that yellow line there as a percent of overall spend, dropped, quite a bit, but that's due to a significant spend increase by the navy in f y twenty five for f thirty five long lean items. So there is a big, set of spending, big obligations around $20,000,000,000 that push the overall defense, obligations number up and then everyone else in terms of share down, but that's where that comes from. So it's not an uncertain indication that there's a decrease in share of Air Force spending compared to the overall. It's more that there was a large purchase basically made that bumped up overall spending. So that's that. And that that actually applies as well to the Space Force side, which we'll head into next. So here the story mirrors many of the trends that we just discussed from the Air Force. The opportunity trend, is that, you know, FY twenty five reflected budget pressures and delays and FY twenty six points, towards renewed growth. So for contractors, this means that space modernization will still be kind of one of the stronger growth markets in the federal sector. The challenge won't necessarily be kind of identifying demand. The challenge will be positioning within the Space Force, acquisition organizations, and aligning with programs that support things like resilient space architectures and operational space capabilities. And again here to share a drop because of that that one large contract obligation. So this slide here, we're looking at, pretty much, basically, we're breaking up the spending by product service code. So what type of work the government is buying or the air force is buying. And then obviously NAICS code, that's what types of companies are are getting a lion's share of the work. So here we're looking at the kind of the top of these different categories. And the slide here really highlights that one of the significant growth areas is in engineering, technical support, and advisory services represented by, it's a little small, but r four two five. So it's kind of that second chunk from the from the top there. You see that large purple line. So there that's kind of the standout trend because it just shot up quite a bit. But here, upon closer inspection, much of that comes from sort of a handful of contracts. So it's a relatively concentrated reason for why that spending increased. And the and the contracts that make up that are MITRE's, FFRDC, the National Security Engineering Center. So that's one big source. Then there's the big Safari program. That's another source. There's the test operations and sustainment out of Arnold. That that contract got, got up and running. And then the b two fast three contract, that also got up and running. So all those kind of contributed to that. So it's a little bit of a concentrated jump. And on the NAICS side, we essentially see a pretty relative consistency year to year in terms of what types of firms make up a bulk of the use of USF's customer base. Okay, so next on the Space Force side, the major opportunity trend here is the rapid growth of research and development spending represented by, PSC code AC13. So it's again kind of second grouping from the top. So this is tied primarily to the proliferated warfighter space architecture or PWSA program and, obviously, the corresponding contracts for, tracking layer and transport layer satellites. And they are the customer driving this is, SDA or the Space Development Agency. So they're the ones driving that, that boost in AC one three year research development spending. In addition, boosting that spending is, or sorry, in addition, we see a pretty good increase in launch related spending. And that largely grew because of, growth in national security space launch contracts. So which kind of actually reinforces the overall theme of this need to continuously deploy and replenish space capabilities. And then the larger context driving all this, of course, is this the continuing move away from a small number of exquisite satellites towards large resilient constellations made up of many, you know, different interconnected systems. So that's Space Force. Let's head into the small business world a little bit. The key trend here is that, small businesses with a proportion of participation in FY twenty five is holding pretty steady. Underlying this, this within the Air Force at least is that small businesses support quite a variety of industries that span engineering services, span IT modernization, intelligence support, infrastructure modernization, and mission support functions. So small businesses support these in a variety of other areas. So, for FY '26, though, it's the proportions has shrunk, at least based on spending to date. So it's still a little bit early to tell since we have another roughly half year left to go for that to be reported. But as it stands now, there might be some catching up to do, towards the latter half of the fiscal year, to achieving kind of the prior year proportions. On the Space Force side, it yeah. Space Force does have, its own kind of distinct profile in terms of its utilization of small businesses. So first off, we see the proportion of OTAs which are represented by the yellow. That's much higher on the Space Force largely due to use of, the Space Enterprise Consortium and and using that mechanism for, modernizing space capabilities. And also, another trend within that makes it unique for Space Force is just generally the the the contribution from small businesses or utilization is is smaller proportionally speaking. So if if you look on the surface though, small business spending is is largely concentrated in things like engineering support, acquisition support, launch support, and mission assurance activities. So that's the overall picture for, the Space Force as far as small businesses go. And on the preference program sides for the actual acquisition methods, in terms of small businesses, yeah, with the Air Force, most of the activity comes from comes from contract vehicles. That's not not not too big of a surprise. And SB set asides are the that have been the predominant way The U the air force engages with small businesses mainly through, Oasis and now Oasis plus, which is emerging as the, obviously, the successor ecosystem there. So the main takeaway is that contractors should be preparing, if not already, for vehicle transitions as many of the future efforts will start to flow through and and are already, Oasis plus. So for small businesses, basically, having access to those vehicles may become one of the most important competitive differentiators over the next several years. So lastly, I'll mention that, what will be important to keep an eye on, certainly something I'll be keeping an eye on, is whether the OASIS plus, the designated pools for eight a and SDVOSB and others, if that'll help drive more spending in those specific categories. So that's something I'll be keeping an eye on since there's not dedicated, OASIS vehicles for those, whether we'll see some additional increase in spending to those categories. Similar to the air force, small business set asides are the biggest component for Space Force small business acquisitions. With Space Force though, there is again kind of a higher degree base, a lot of which get kind of a a bulk of the spending. A lot of small those specific groups of small businesses get a a good chunk of the spending. Another thing that's, in terms of concentration, there's the type of work that Space Force looks for. It's largely engineering and acquisition support. And then there's even more of a reliance, on on OASIS small business as far as how the, Space Force utilizes, the set aside. So one thing I do wanna point out in this case is that construction spending is actually worth keeping an eye on as well within Space Force, particularly on the small business side. There's a program called the Front Range MAC, multiple work construction contract. So that generated 234,000,000 in small business obligations, over the past several years. And there are other sort of METOX, MAX, multiple award task order construction contracts that are appearing throughout, Space Force, contract vehicle use. So, overall, safe to say that installation modernization, facilities investments, and all that is is gonna be a continually sizable component of Space Force small business obligation. So that sector I think is is important to keep an eye out on as well within the Space Force. Okay. On the contract vehicle front, so here are the top five contract vehicles used by the Air Force. I've listed under the primary industry section here, what the Air Force uses them for predominantly. So Alliance two and Suite five, obviously IT, GSA, MAS, also predominantly, used for IT related products and services. And, we can just look at OASIS and Alliant, a little bit more, closely. For those, if you're just to focus on those, the mission areas, just to kinda list them out because they are kind of they they they're fairly consistent as far as the mission areas that keep coming up when it comes to OASIS and aligned use. SITA or systems engineering technical assistance, EPAS, which is a basically a professional services program managed by the Lifecycle Management Center. It's been around for a long time and that's, that's going to continue using OASIS, OASIS Plus. Nuclear modernization is a consistent theme in in the Air Force's vehicle spending. Cyber operations, AFRL, r and d, enterprise IT, and Alaska's civil engineering. So those themes continually come up, as kind of major mission areas that that drive or that the Air Force uses to to use vehicles for. So on the Space Force side, it's a similar mix with the addition of Astro, GSA Astro. So again outside of the IT vehicles like a line, GSA MAS, there are two sort of main spending lanes, at least with the Space Force. There are two, spending lanes kind of to, complement what we just talked about with this with the Air Force. But for for Space Force, it's enterprise support and acquisition management lane. That's kind of one big one. So things like financial management, acquisition support, seat of service. So that's a consistent theme within the Space Force's, contract vehicle use. And then the other one that's pretty common and it's recurring is mission engineering, broadly speaking. So things like, PNT, SCNI, position navigation timing, SCNI, remote sensing, cyber operations, space superiority. So, for anything in kind of the mission engineering world, Space Force very much uses, contract vehicles, specifically OASIS and Alliant, to get those requirements fulfilled. Okay. Now let's shift into contract opportunities. So, for this section, the key theme you'll notice is that many of the upcoming programs, use non traditional acquisition methods. So, things like commercial solutions openings, OTAs, and others. So and this largely reflects broader Air Force and Space Force efforts to accelerate things like innovation, increase competition, and attract nontraditional contractors. And in fact, if you look at the spending through these different vehicles, Air Force and Space was really leading the charge, as compared to its its peers in the Navy and Army, so and and the non services departments. So, yeah, they've definitely taken taken advantage of these different mechanisms that are now available. So we'll start with mock one. So the modernized agile construction horizons effort. This is pretty new. This just was just issued last week, and there were just a couple topics issued just in the past couple days. So Mach one, this one represents a I would call it a a significant development happening in construction acquisition, namely the use of other transaction authority, or the authority rather than traditional procurement methods. So this is going to be managed by the seven hundred and seventy second Enterprise Sourcing Squadron focuses on construction related requirements. And they're going to run this program through 10 USC 2,808 which is now the statutory authority that gives the services the ability to use OTAs for construction. So here the main goal is going to be to explore and execute innovative, agile, and modernized acquisition, modernized construction and delivery capabilities. The, the larger context is that the Air Force installation modernization parties are expanding. They're expanding pretty rapidly, and leadership really wants faster delivery mechanisms than than are previously available through traditional MILCON approaches, and those that, those that are used for MILCON approaches basically. So among the things to keep in mind for Mach one, follow on work and successful initial efforts can expand into larger installation wide opportunities without a new competition. And there's also this, the advent of a solutions repository. So this concept is basically where a phase one solution brief from a vendor for a specific area of interest that they might issue. Area of interest being kind of a specific project they have in mind that they're now soliciting feedback on. So, someone submits a phase one solution brief for one of those. They might be approached directly for other similar construction design requirements without a new same backup post that need to be issued. So in keeping those around, if something else comes up, they can go back to that repository and find companies to potentially go to. So that's interesting. And lastly, I mentioned that rather than task orders, which we see on things like Max and Maytox, they'll be releasing AOIs, areas of interest. And, yeah, like I said, they already actually issued two just this just in the past couple of days. So it's already moving pretty quickly. One is for medical enlisted training campus recapitalization, and the other is to upgrade the facilities for the military working dog kennel program out of Lackland. So this one, keep an eye on this one, and I've got the op ID listed there for those who wanna take a look. But, for sure, this trend is also already happening in in the army. So, for those that wanna explore the OTA mechanism within, outside the air force, army's already doing this as well. They've got some programs ongoing like like the forge program, but, definitely an area to keep an eye on. Next I've got the Megatron IDIQ. So this one is, in my estimation at least, potentially one of the most strategically important opportunities. It centers on supporting the, DAF battle network and broader c three b m modernization initiatives. So how this one kinda started is that the there isn't, for those that, are familiar with this, there's the, air battle management system, IDIQ. That came out through a broad agency announcement. And, obviously, as as the the specific, capabilities were developing, they needed new sources of money in order to fund you know, later stage work. Right? So a the BAA the BAA was kind of restricting was restricting the types of funding that they could use. So they they went this route, which is to issue, kind of a follow on, so to speak, to the to the ABMS IDIQ, and dubbed it Megatron. The larger context here is that the evolution of ABMS is now a larger enterprise effort focused on, integrating sensors, data, networks, applications, and battle management capabilities across air and space domains. And what contractors need to know about this one is that the the vehicle is designated to support both products and services. It's got a full and open and small business pool, and it will become, really a key mechanism for delivering, you know, very important things like digital infrastructure, software, connectivity processing, and integration capabilities. So, yeah. Any any company participating in JADC2 and the related, elements, battle management cloud, data architecture, mission integration. Definitely be watching should be watching this one closely if not already. Next up, I've got the we're gonna talk about the IDCS Spartan effort. The central theme here is cyber systems consolidation. So the the Air Force wants to go from having these disconnected defensive cyber tools, which can you know, having them disconnected can create vulnerabilities and reduce effectiveness. They wanna go towards a unified architecture under the IDCS program. So with this one, we do see a material example of the impact of the executive orders and memos we've seen, and the the impact they've had on acquisitions in that. They were initially gonna go through to do a standalone vehicle. That was the idea at least. But then just in the past, I believe in May, they issued an announcement to say that they're gonna go through existing contract vehicles, and they've already issued two RFIs through Oasis plus, on on some specific topics around this. So, so estimate incumbents, we are classifying this as a new requirement because there isn't a direct recompete of it, but there are obviously host of vendors supporting the current systems. And for those who wanna explore that, we do have all that information in the corresponding report, 206256. So that information is there for those who wanna delve into who's supporting the current, sovereign defensive operation systems the air force has. K. So we've got three more for you all to talk about. EPIC, Enterprise Prototype Initiative Consortium. So, this represents a pretty major future opportunity within the Air Force Research ecosystem, so AFRL especially, and the trend is expansion. So AFRL is basically moving beyond they they had a c four ISR technology focused consortia, and now they're saying now they wanna go much broader. They wanna go enterprise wide and have that innovation structure across the enterprise versus just focusing on c four ISR. The incumbent, quote, unquote, her predecessor, OTA was was called OTAFE. It's managed by Sosec. So now at this one, they are looking for a new consortium management firm to manage the sort of the the next iteration of this, although it's gonna be larger in scope. So this one is essentially, I think, a good opportunity to keep an eye out for for those folks that are interested in supporting the the research lab, and and the corresponding initiatives. I should note, again, this is this specific opportunity is for the consortium management firms themselves, but but that doesn't mean obviously, once that gets up and running, that'll be when the vendor community at large, however they decide to structure this. That's when they'll be you become a member of the of the consortium. Again, however they structure this, and then that's when the opportunities start coming in. So I bring it up not because this is a specific opportunity to wait for solicitation on, but because subsequently, once it's awarded, there'll be likely, project level agreements and other projects coming out underneath it. And that'll be, again, AFRL wide, not just across different technology areas, not just c four ISR. So next, we have global unified airbase readiness and defense. So this opportunity focuses on integrated based defense, force protection, technologies across all the different installations across the globe. And really what it highlights is that growing convergence of physical security and cybersecurity. So it is considered, a follow on to the IBDSS next vehicle. But, yeah. And then all the sustainment activities that are going on on that one and the spares associated, it's all gonna transfer over to to Guard. But, as they've noted in the documents for this one, the overall scope is expected to exceed what was under IBDSS next. So the broader context here is that the the modern threat environment requires physical security systems to operate, you know, as as network digital ecosystems rather than just standalone hardware solutions. And what's important to consider about this one is basically the need for both physical security and software capabilities. So, the government has explicitly said, you know, they they're looking for integrated solutions involving sensors, access controls, surveillance, cloud tech and cybersecurity protections. Alright. Let's head into some Space Force opportunities now. OTTI, operational test and training infrastructure, CSO. So, the key thing for this one or the key, I guess, point for industry is is the use of the CSO. So this I'm gonna use this as kind of a piggyback or a launch point to talk talk about CSOs a little bit. So for those who are not aware, the CSO is an acquisition method without going into too much detail. It's basically kind of a streamlined way for the government to, buy innovative commercial tech and services. So instead of the and the key differentiator in my estimation at least is instead of the government spending years kind of writing pages of rigid and highly detailed tactical specifications, With with CSOs, the government just shares kind of high level problem it needs to have solved. And that description alone, can be as simple as paragraph or few sentences, typically longer, but it can be that way. And on the on the vendor side, all they have to do is it's it's a little bit more of an abbreviated process. But instead of putting together, you know, massive traditional contract proposal, they can sim they they go through things like pitches, or solution brief, slide decks, five minute videos. It depends. Like, they they can structure however they want. But the idea is just to kind of make it a little bit, less or a little more frictionless in terms of getting access to new tech, that much more efficiently. But like I said, the the key thing, at least from my perspective, is that the PWS does not it's not predefined and in a sense, it's sort of written by both the vendor and the customer. And another differentiator is that they can use any kind of money. So it could be RD and E money, o and m money, and so not restricted to certain type of money. So, again, a lot of flexibility is built into these. Last point, generally, about CSOs. See, I've seen quite a steady increase in their use, and I I expect that to continue. So Air Force Space Force alone, have done around, just combined, they they've they've already issued 365,000,000 contracts roughly through CSOs, and that that's just in FY twenty six. That surpasses so far in FY twenty six, and that surpasses all of f twenty five FY '25. So and I've started to see kind of high dollar, value, efforts, go through CSS. For there there's a, one that came on my radar was a $50,000,000 cyber operations effort that came through, the air combat sixteenth Air Force CSO. So that would typically in in prior years, would have been something that gone through like an alliance, but in this case, that was a that was a, a quote unquote sort of test or type of war that went through, on this case, the CSO. So back to o t OTTI, though. So OTTI really reflects, the efforts, within the space force to modernize testing, training, and operational readiness. They they really wanna move toward kind of a a realistic, contested operational environment supported by digital and, synthetic tech. So, here, the technologies are are gonna be treated as commercial solutions. And again, the process is designed to rapidly evaluate innovative capabilities. They've issued seven AOIs, areas of interest so far. And six and seven are currently open and accepting, responses. Got one more here for you all, and then I will pass it over to John. So connects. So this, yes indeed, we have another CSO. Albeit, this one is structured differently in that it's actually expected to result in one award versus having kind of rolling set of awards in AOIs, like like the previous one that we talked about and and many of the others. So here, the the offeror who moves into phase three will be collaborating directly with the government to write the final PWS. And the intent there is to, is in part to kind of minimize scope ambiguity and close the gaps that, you know, typically exist when you're consolidating kind of legacy work. So, yeah, and consolidate legacy work is the main goal of this one. In particular, there's four separate BART related IT support contracts, all of which are listed here on the slide, but that they wanna consolidate. This one is a small business set aside. We're expecting a synopsis to be issued in the this quarter or potentially next, given that they are already having a pre release industry day, next week. So things are moving along on this one and, expect to see something relatively soon. So with that, John, I will turn it over to you, sir. Thank you, Steven. Appreciate that's a lot of information. And if you haven't already done so, download the slides because you'll be able to review those at your leisure. I'm gonna shift over here and, and step back and zoom out a little bit and and get more into the FY 2027 budget outlook and see where we see some opportunities, and where we go, possibly from there. So, before we get into the details of that, I just wanna define our terms if if we could for a moment. The key thing that we're trying to drive at is to sift out what of the funding, is actually contractor addressable. So, of course, you've got your legislative appropriations. That's what congress does, passes their bills. The discretionary budget is what the Air Force and the White House requests, but congress controls those funds through their annual appropriations bills. And so what comes out of congress in the appropriations addresses both, areas of internal as well as external spending. So when we talk about contractor addressability, we're looking at the the potential amount of that sub of the subset of the total appropriations that is addressable by contractors. So that's basically the total appropriations minus internal costs with personnel, military personnel, and and those kinds of things. So, ultimately, when we're we're really interested in and what Steven was talking about earlier is, you know, where's the where's the addressability, and how do we get to those? Now another point that we'll talk about too is, within the discretionary budget. Now beginning in in FY 2025, we had Congress, and and the DOD, use reconciliation funding and mandatory funding as another another kind of a a bucket or or color of money. So we're gonna we're gonna talk about that as well. So let's get into it. So, what you have before you is just a a a last few years of of spending, excuse me, budget, both mandatory, discretionary, and, contracted spending with some estimates into the next couple fiscal years. So the dark blue is your is your, is the discretionary budget. The lighter blue is the mandatory portion or the portion that got referred to in within the reconciliation bill back in 2025. And then the pink is, contracted spending and for 2025 books closed, as well as some projections, for this current fiscal year as well as into 2027. So if just some background on this. Before 2020, the air force discretionary budget was under $200,000,000,000 in in total discretionary. Once we, got into 2020, we saw it rise, you know, from a $193,000,000,000, up to $205,000,000,000. And then in 2023, it was $247,000,000,000. So since, you know, 2324 range, we've been at the, you know, $257,000,000,000 range for total discretionary budget, at the air force. So it's been fairly stable as far as the last few years go. But in 2025, as I mentioned, you know, we saw the beginning of the the really the use of the budget reconciliation process where we included mandatory funding, that got added on top of the discretionary budget, with specific, you know, purposes, earmarks, priorities associated with that. So if you recall, you know, the one big beautiful bill act, or the 2025 reconciliation bill, it added $33,000,000,000 toward f y 2026 spending, in the mandatory category. Now the mandatory category, we have found is is highly contractor addressable. It's largely used to to, to support readiness in the areas of platforms, weapons systems, technology, even facilities, especially with the air force. So so the mandatory bucket, is is is highly addressable. In 2026, we saw a total budget of of about $293,000,000,000. So that combining the total of the mandatory and the, and the discretionary discretionary area. So, you know, we're we're it continues that the top line budgets continue to increase. If we look at 2027, discretionary, as you can see, grows huge by 40% by over a a $100,000,000,000 for the discretionary 2027, request where the mandatory, is actually is actually reduced by $5,000,000,000 year over year. So, you know, we're looking at a almost, you know, 300 more than a $390,000,000,000 budget, request for 2027, which would be a 35% almost a 35% increase year over year from what was enacted in 2026. Now we're currently monitoring, the the current, I guess, third reconciliation bill, that would add significant funding to f FY 2027. That is still TBD because there of course, it's part of the congressional, you know, house and the senate, in the political process, especially as we head into a midterm. So that's a little bit of a football right now, but we're monitoring it. So, it's, you know, TBD on on what that is. If we switch over to the con to the, to the contracted spendings part of the pink, the pink bars, generally speaking, historically, contracted spending generally follows the the discretionary budget. And that makes sense as budgets go up. You know, they they're they spend more with with contractors. And so it's really kept pace with with the total budget since, you know, 2020 in 2024, 2025, and that's the historical trend. The contract spend over the last five completed fiscal years, up to 2025, averages about 41% of of of total. So for every dollar, you know, every dollar in total budget, the air force spends 41¢, with contractors. The 2025 average in real terms was actually 42%. So it's just a a hair above what the what what the historical or the recent history has had. So in other words, as the money comes in and we see some of the impacts of the dis of the of the, mandatory funding, that translates into a higher degree of addressability. So something to keep in mind as you consider where the opportunities are. So that you know, and recent contracting as a result has outperformed that five year average. Now we look at '26, 2026 and 2027, these estimates, the the cross hatched bars, You know, even though the mandatory portion in '26 and '27 is is almost, we would say, north of 90% addressable, to simply add that chunk of money on top and and and consider a 100% addressable. We chose a much more conservative perspective, just to to to hedge our bets here because we're still you know, the the the cards are still out on where these where these total numbers are gonna come. So, so we estimated the, the the percentage of contracting back at that five year average of 41%, and applied it to the total discretionary mandatory. So, you know, 41% of those of those top line numbers are where we expect to see, where we expect to see, hopefully, conservatively, contracting to to to, to fall in. Now, of course, Congress has a tendency. They have in the past, the potential to appropriate more than the what the Pentagon, and the White House, requests. We'll see because, of course, you know, things change from time to time, and and we could see some changes, in the in the coming months. But, so these but if they if they, appropriate close to this amount, we these, these estimated contracting levels could be actually understated. So, we're cautiously optimistic in that in that regard. So let's break down the 2027 budget a little bit more more closely. So, you know, top blue, and the blue is is the is the discretionary numbers below that, and the pink is the mandatory numbers. And you'll notice, some significant, you know, significant year to year changes. This is how the that $391,000,000,000, if for 2027 breaks out by mission area or appropriations categories. Note, you know, the there's a reduction in mandatory at the top line of 15% or $5,000,000,000 reduction, in the mandatory as the way air force has has structured their '27 budget, but that reduction is more than compensated by a 100 plus billion dollars, bump in discretionary funding for 2027. The, the the breakout across the various categories, RDT and E, O and M, etcetera, really fall within predictable ways. They're pretty pretty consistent from year to year. Although, in the last several years, we've seen the RDT and E bucket, exceed procurement, which, you know, which is a little bit of a shift. And and that makes sense as we see, greater focus on developing new capabilities, developing new, new capabilities, new technologies, and those kinds of things. The percentages in the parentheses indicate the change from 2026, so you can see a lot of plus in there. So let's break this down a little bit more. For the RDT and E area and discretionary of a $111,400,000,000, that's a 73% increase, year over year before adding on the $3,400,000,000 in mandatory funding, which itself is is an increase from 2026. So RDT and E, again, is where we're seeing the development for new capabilities, technical applications, that these this translates into potential contracts in different forms, OTAs, etcetera, like Steven mentioned earlier. We talk about o and m. Of course, you know, then the discretionary, we're talking about a 24% increase to $96,500,000,000, and then we're gonna then they would add another $6,500,000,000 in mandatory funding. In the procurement area, you know, further, we see an additional, again, 40%, almost a 40% increase at the discretionary level. And so to add the mandatory in with the additional 17, almost $18,000,000,000 there, you know, would put a 100 over a $100,000,000,000 in in total procurement. That's a 38% increase at the top line. And those are the areas where you're gonna find the most areas of addressability most of the contracts are coming. And then, of course, things are rounded out by, you know, military personnel, military construction, and, management funding that goes within those, by comparison, are are less less addressable and smaller portions. So, but, you know, it's very curious, you know, in the last few years, like I said, the the use of mandatory mandatory, the mandatory carriage, category is is pretty atypical, historically speaking, but they're using it now. So it's something we would pay attention to. So let's look at how the budgets above there translate into addressability within the air force and the space force, and this is where I'm gonna break it out and and and handle them, treat them individually. So this chart is the, air force, individually. The the total budget, these these numbers here on the left bar, the 221 is, billion dollars, includes both discretionary and mandatory funding amount. And looking at how those spread up across different accounts, we anticipate that, that contract recibility, in 2027 at the air force is gonna be about $221,000,000,000, which is a 24% growth over 2026. So and you can even see that continues to grow from 2025. So, again, there's continued growing opportunities, at the air force. If this breaks out into this pie chart to the right, okay, and how this 2020 02/02/2021 breaks out in addressability. One thing to note, and it's not this way every year for sure, is that we see this year we see growth in all of the categories, equipment and r and d. I mean, r and d has, you know, $17,000,000,000 in growth in r and d. And, also, you know, growth in o and m, architecture, engineering, construction, and consumables, we see growth across all the areas. The other category, the smaller smaller buckets include things like communications, professional services, management, administrative support, and medical services. But together, those are also are also growing. So there continues to be within the '27 budget a continued, you know, opportunity and addressability growth at the Air Force. Let's shift over to Space Force. Again, the amounts include both discretionary and mandatory amounts. Space Force sees even stronger, proportion you know, proportional growth in 2027 compared to 2026, you know, compared to it's you know, we're growing about a 120% year over year. And that's relatively modest or, you know, we saw relatively modest growth from '25 to '26, '27, '27, especially with the RDT and E budget, at the at the Space Force, we see significant growth opportunities. So, and, you know, if we note as we've got got the pie, again, we see growth among all the categories with r and d dominating the Space Force budget, which is slightly different than the than the Air Force, of course, and then followed by equipment and o and m. All the categories are growing. Large r and d, you know, budgets continue to support Space Force efforts to develop new space, new space capabilities. We'll talk a little bit about some of those, as we go. Here, again, the other category includes management and administrative support, telecommunications services, consumables, and medical services in that in that small bucket. So let's shift our focus with with the time we have toward, towards some IT specific areas at the Air Force and Space Force. Now one thing that, I would like to highlight is that this year, we still, at this point in the fiscal year, we still do not have, full IT or cybersecurity budgets from from the Department of War, Department of Defense, from the Air Force. We're still waiting on them. We're and we're watching, daily to see what we could do, but we but what what I've done is dig dig out from the discretionary budget, from the procurement, from the o and m budgets, from the RDT and e budgets, areas where we see specific IT investment details, while we wait for for if we ever get, more details specific to IT. So starting with the Air Force, you know, just to highlight a few, few of the larger programs that are are out. First, you know, the enterprise IT as a service wave one. This, you know, this program isn't really an outsourcing program, for base level help desk, end user device support, and fielding ISERV IT services department wide, in order to free up air force personnel for cyber missions. And so the, the first, you know, f y twenty seven budget of $5,700,000,000 for wave one, is set for for this coming fiscal year. The second wave, wave two base infrastructure modernization, air force is saying they could add up to $12,500,000,000 over the next ten years. So, significant significant, spending there, on outsourced IT as a service capabilities. Secondly, the ABMS, Air Force Data Fabric and Digital Infrastructure program. This really is focused on enabling a multi cloud capability, you know, for data storage, data fusion, and then access across, multilevel security environments, really leveraging the, you know, leveraging the cloud for, data data focused, applications. So this, you know, this would provide really the background for the overall, combined joint, JET c two, data sharing network that, the DOD has been building. So the f y twenty seven budget is you know, the air force portion of this is, is $11,000,000,000. Not not not bad at all. And finally, AFNET, and that's it's specifically around cyberspace security control system. Really, they look they're looking to standardize their secure and nonsecure network baselines, and they're consolidating regional data centers as part of this to increase their, inner network operations, their efficiencies, and to cut costs. And they budgeted within their procurement budget about $326,000,000 for that just in FY 2027. Other modernization programs, and this is you'll see a theme, you know, that they they got, they mentioned cloud one modernization, base infrastructure modernization, information security, COMSEC modernization, you know, moving toward, PQC, post quantum cryptology, air force key management, identity management, other other areas of security modernization that are all NSA mandated across the DOD. Now if I'm shifting down to space force, and these programs are primarily within the RDT and E budget at the space force. First one I'll talk about is the defense of cyber operations, DCO space. And this is focused on space vehicle defense, cyber tools, network security, digital forensics for the the classified, space for cyberware for our integration areas. And the budget in for 2027 is $404,181,000,000 dollars, almost $500,000,000 there. Secondly, the space domain awareness, SDA planning and tasking baseline consolidation. This program merges, the distributive space command and control sustainment into one unified mission baseline. So you'll see you you probably should see some themes here between the two, in air force and space force. You know, here, they're cutting duplicate space development agency contracts. So they're so they're they're they're merging and consolidating contracts, and they budgeted $357,000,000 for 2027. And finally, the data transport and networking program. This this program is consolidating the unified data library, and the mesh one terrestrial and integration operation networking into a single enterprise, data and network backbone. And they budgeted a $165,000,000 for this in 2027. So key themes as you as you probably picked up on is, you know, most of these large programs are focused on efficiency and modernization to reduce operating costs, to improve the performance, to leverage cloud infrastructure for joint capabilities. And in some cases, they're they're looking to build some new capabilities, for example, around cyber and space operations. So with that, let's turn to some conclusions, and then we'll get to some questions. So first and foremost, I'll, I'll talk about the budget. So the '27 budget, you know, of course, the budget expands more than 30%, and it's about it's supporting both, you know, current priorities around modernization, around readiness. We saw even with the with the 2026, funding that goes into the, you know, from the one big beautiful bill act that much of it was all focused on readiness. Well, you know and so, so, you know, there's gonna be a continued, at least in in the near term, our continued reliance on the reconciliation and the mandatory funding process even if they decline. Now, of course, funding remains uncertain as we go into the election process, but stay tuned for that. But even so, on the contracting side, you know, contracting spending at the air force still, you know, averages in the mid to upper nineties per year. So, you know, with about 3030% of that coming in q four. So sustained budgets will continue to drive strong contract spending in 2027. Even if they don't get every, you know, everything that they're asking for, we're we still expect to see, you know, a strong contracting market in the in the 2027 area. Continued focus on readiness, mission support, some of some basin facilities support as well, and and then modernization efforts. So and, again, the the the IT themes are around modernization, reduce cost, improve performance, and building some joint capabilities through research and development. So, at this point, I'll turn it over to Steven to to take his home on conclusions. Very good. Yeah. And so, some additional kind of focus on investment areas, underneath the headline investments like air superiority, nuclear modernization, next gen space architecture, and others. There there are growth areas that include things like, addressing the network and c two across air and space domains. So connectivity, processing, data management, applications, testing, product support, logistics. Definitely see some areas there for opportunities. Enterprise IT modernization, just going through and updating agent IT equipment and securing the the network backbone. That's obviously through programs like the base infrastructure modernization effort, BIM, and then cyber operations. So those are areas that definitely seeing continued, potential growth. And then the other theme is and also touched on earlier as well, but it's the nontraditional acquisition methodologies becoming more so standard practice. I'm not sure when I'll stop saying non traditional because they are becoming kind of a a regular part of the toolbox, for our acquisition professionals. But, there are things like the advanced research announcements, multiple authority announcements, talked about commercial solutions openings. There's also partnership intermediary agreements. Those are the works, W E R X programs. There's, you know, roughly a dozen of those sorts of organizations that are out there, these sort of innovation hubs. There's potentially the head end of government managed OT consortia. There's obviously OTAs already, potentially maybe expanding on the use of CBRE phase threes since that's already an existing pool of vendors with, a commercialization plan. Things like marketplaces, the Platform One solutions marketplace. There's the Tradewinds marketplace. You might see more of those potentially. And then opens, open source software ecosystems. There's the example of, the Golden Horde, which is autonomous swarm tech. So they they they basically posted a repo on GitHub for for folks to look at and and, request, feedback on. And then, obviously, with the Milcon budget expansion coinciding with construction based OT authority. So the the array of ways that the government, is looking to potentially procure things is is growing. And so certainly something that, the vendor community needs to continue to be up to date on and and be aware of. So with that, we can head into questions. Awesome, Steve. Thanks. Yeah. I was looking as we, as we go. And, of course, if you, if you have questions, pop them into the q and a box. I did see one here, a question about, certifications, etcetera, that that are needed. And I know, in in all things DOD or DoW, there's a there's a quite a bit of conversation around, the whole cybersecurity maturity model certification CMMC, and the fact that that program is paused, while the DOD takes another review at it. And I would say, at least my sense of in fact, Delta just did a webinar a few days ago with, Katie Arrington, who, was the author of the original program and and at the DOD for quite some years. And the the theme around the town or the talk around town is, yes, it's paused, but it's not going away. In fact, if you look at the the some of the FAR, overhaul activities, there's an entire FAR CUI rule that would be government wide. So bottom line is, to cut to the chase, whether it's CMMC and what it look whatever it looks like or if you're over on the, the the civilian side, the the government is gonna continue to require some form of assurances that, their contractors are taking their cybersecurity seriously and applying the NIST standards that are that are consistent across whatever programs you're talk we're talking about, and the handling of CUI. So it'll take you know, it's taken some time, but it's it's not you know, that whole process is not going away. So, whatever it might look like, get your get your cyber house in order, I would say. So, Steven, did you see a a a question that you wanted to address? Sure. Yeah. Definitely. There's there's several. I'll just kinda maybe take a couple off here. Yeah. One of them, one of them is I'm looking for it now. It's around do you see additional consortia being used? Yeah. So, yeah, do you foresee a trend of more consortions forming to pool resources? I've I'm seeing I still see more coming online. I'm seeing the, again, the. advent of perhaps more, potentially government managed ones. Again, this is relatively early, but I feel like I've seen between the AEDC, velocity alliance, which is, one that to to basically boot beef up the infrastructure around Arnold Engineering Development Complex. So that one's been, standing up of late, and then you've got the forge program run by the army. You've got, soft racer, special operations forces racer. That one is using a a no management fee model. So there's different types of models coming up, and and I do see that trend continuing as they kind of explore how to do this and keep that pool of resources or that pool of vendors going. So I do see that continuing. I also see one here about the the quantum cryptography mandate. So on that front, as far as what the air force is doing, that was pretty recent, I guess, that that meant that, executive order. So but but Air Force has does have a few programs that I think are right for that to be a potential way to maybe introduce yourself or to kind of play into that a little bit. And there's a there's a quantum information sciences. It's information sciences BAA that's been around for a little while now. It's it is actively awarding contracts too. And that's if you, have got one, it's 231051 is the op ID. But that one, is a specific dedicated BAA around quantum information sciences. So that's that's a way to potentially, piggyback off the the executive order. And there's also, a CSO out of air combat commands. That's 263632Op ID. That one has a specific topic area for quantum resistant cryptography. So there's already some programs, and you can search more too, but there's already some programs in there that are already made ready to go that a company can go and potentially, take advantage of. So, John, over to you for some more questions. Thanks. Thanks. We we're coming up on time, but I do wanna grab. a couple more real quick. There was a question about whether, you know, whether the r and d budget would include IT support and services. It could, although most of the time, those types of services that you're gonna find in the o and m budget most most likely. But it really depends on how how the program is is is structured their budget. So, so the question I guess the answer is maybe, but you really have to get into the into the budget areas. But most of the time, your IT IT support, is either gonna be in the procurement or the O and M side. And and to kinda piggyback on that, there was a question around, you know, with the air force as they straighten out their twenty twenty seven priorities. You know, what capability gaps are they most likely gonna need, industry support, industry teaming? And the person we're asking, you know, infrastructure resilience, logistics, regional support operations, actually, you know, all of those areas. And we saw that in the 2026, mandatory budget. And if you've if you've kept up with the DOD's apportionment of what came out of the one big beautiful well act, all the billions upon billions of dollars, they've apportioned those dollars to be spent by the end of twenty twenty six. So there so, so those those those funds are even though they're available, quote, available until 2029 or through 2029, they're spending that money quickly. So I think that's why we're seeing them go back to congress for additional war funding, for 2027. So I think that's all the time we may have, unless there's one more question you wanna get or we can't think we need to move it on and respect people's time. Now I will say if you're a if you're a current Govind client subscriber, you can submit questions through your dedicated customer service representative. So feel free to take advantage of that if you would like. But at that point, I just I think I'm gonna turn it back to Alex to close this out. Alright. Thank you, John and Steven. Appreciate that. Before we officially conclude, I just wanna remind you, you will get the on demand recording of today's webinar, via email within twenty four hours. Like John mentioned, if you have any questions and you are a GovWind customer, you can, submit your question to your customer success rep. We have also launched a very short survey. If you could take a moment to answer that, we would appreciate any feedback, that you would like to share with us. And with that, thank you for joining us today, and please well, please visit deltek.com for more upcoming Deltek events. Thank you. Thank you all very much.