FY2026 Top Federal Sub-Agencies: CMS and Social Security Lead $1.8 Trillion in Obligations
The federal government's biggest spenders aren't always the cabinet-level departments you see on the news. The actual money flows through specific operational units—sub-agencies that process Medicare claims, issue Social Security checks, and build border infrastructure. In FY2026, just two of these sub-agencies account for over $1.8 trillion in federal obligations.
Bottom line: The Centers for Medicare and Medicaid Services (CMS) and the Social Security Administration dominate FY2026 sub-agency spending, while major infrastructure and defense contractors frequently perform billions in federal work across state lines from their corporate headquarters. Source: USAspending.gov.
Top Federal Sub-Agencies by Obligations in FY2026
Here's the thing:
When tracking where federal tax dollars go, sub-agencies reveal the true operational footprint. The Department of Health and Human Services (HHS) relies on its Centers for Medicare and Medicaid Services to distribute funds. In FY2026, CMS obligated $1.0 trillion across 3,161 awards.
The Social Security Administration follows closely behind. Operating as its own primary sub-agency, it obligated $847.1 billion through 154,567 awards.
| Sub-Agency | Parent Agency | Total Awards | FY2026 Obligations |
|---|---|---|---|
| Centers for Medicare and Medicaid Services | Department of Health and Human Services | 3,161 | $1.0T |
| Social Security Administration | Social Security Administration | 154,567 | $847.1B |
| Food and Nutrition Service | Department of Agriculture | 2,263 | $89.7B |
| Department of Veterans Affairs | Department of Veterans Affairs | 19,187 | $27.4B |
| Federal Emergency Management Agency | Department of Homeland Security | 7,804 | $14.0B |
Significant Spending from Housing, Agriculture, and Veterans Affairs in FY2026
Beyond healthcare and retirement, housing and food assistance drive massive FY2026 sub-agency spending. The Department of Housing and Urban Development's Assistant Secretary for Housing obligated $5.4 billion across more than 19,000 awards.
Meanwhile, the Department of Agriculture channels its obligations through multiple specialized units. The Food and Nutrition Service alone accounts for $89.7 billion in FY2026.
The VA also maintains a massive footprint. Operating as its own sub-agency, the VA obligated $27.4 billion across 19,187 awards to support veteran services and medical facilities.
FY2026 Contracts Where Work Happens Away From Recipient HQ
But there's a catch.
The state where a federal contractor is headquartered is rarely the only state benefiting from the funds. Often, federal contracts place of performance FY2026 data shows billions of dollars flowing across state lines. A company based in Arizona might execute a massive construction project in New Mexico.
Take FISHER SAND & GRAVEL CO as a prime example. The Arizona-based contractor secured a $1.7 billion contract for primary steel construction, but the actual work takes place in New Mexico.
Similarly, TRIWEST HEALTHCARE ALLIANCE CORP operates out of Arizona but executes major healthcare administration contracts in Virginia. In FY2026 alone, TriWest holds multiple VA contracts, including individual obligations of $1.0 billion and $928.0 million.
| Recipient | Awarding Agency | HQ State | Work State | Obligation |
|---|---|---|---|---|
| FISHER SAND & GRAVEL CO | Department of Homeland Security | AZ | NM | $1.7B |
| AMI METALS, INC | Department of Homeland Security | TN | TX | $1.4B |
| TRIWEST HEALTHCARE ALLIANCE CORP | Department of Veterans Affairs | AZ | VA | $1.0B |
| OPTUM PUBLIC SECTOR SOLUTIONS, INC. | Department of Veterans Affairs | WI | VA | $723.7M |
| COCHRANE USA INC | Department of Homeland Security | VA | TX | $641.2M |
Department of Homeland Security's FY2026 Cross-State Contracts
The DHS manages some of the largest geographically dispersed infrastructure projects. DHS border construction contracts 2026 data reveals heavy reliance on out-of-state contractors.
BARNARD CONSTRUCTION COMPANY, INCORPORATED, headquartered in Montana, secured a $369.4 million contract. The work involves building 120 miles of vertical border barrier in the Rio Grande Valley of Texas.
For materials, DHS awarded AMI Metals of Tennessee a $1.4 billion contract to supply bulk steel. The final destination for this construction material is also Texas.
Key FY2026 Contracts and Their Geographic Impact
This cross-state economic impact extends well beyond border infrastructure. Federal agencies frequently tap specialized firms in one region to solve problems in another.
Optum Public Sector Solutions is based in Wisconsin. However, they are executing a $723.7 million VA contract with a performance location in Virginia.
Out West, the Department of the Interior awarded RECORD STEEL AND CONSTRUCTION, INC. of Idaho a $129.1 million contract. The project involves rehabilitating wastewater treatment systems at Canyon Village in Wyoming.
The result?
Federal obligations heavily distort local economies. A state's total awarded contract value doesn't always reflect the actual economic activity happening within its borders.
Quick Takeaways for FY2026
- Healthcare dominates: CMS leads all sub-agencies with $1.0 trillion in FY2026 obligations.
- Retirement funding is massive: The Social Security Administration obligated $847.1 billion this fiscal year.
- Money travels: Major contractors like Fisher Sand & Gravel and AMI Metals routinely execute billion-dollar projects in states far from their corporate headquarters.
- Infrastructure spans borders: DHS heavily utilizes out-of-state firms for Texas border barrier construction and materials sourcing.