2026 Budget Work Session #2 Water & Sewer Funds

Congressman Pat Harrigan, a combat-decorated Green Beret and defense entrepreneur, has been sworn in to represent North Carolina's 10th District in the 119th Congress and appointed to the House Armed Services Committee. His committee role includes oversight of national defense policy, military readiness, and U.S. security, positioning him to influence defense procurement priorities and legislative decisions impacting defense contractors and suppliers.

• Why this matters: Harrigan's military background and entrepreneurial experience suggest a focus on modernizing defense capabilities and supporting innovative defense technologies.
• Procurement professionals should anticipate potential shifts in defense acquisition priorities aligned with readiness and security enhancements.
• Defense contractors may find new opportunities as legislative oversight could drive funding and policy changes favoring advanced defense solutions.
• Organizations engaged in defense procurement should monitor committee activities and Harrigan's policy positions for early insights into upcoming defense spending and contract opportunities.

Senator Mark R. Warner, alongside five Senate colleagues, has formally requested detailed disclosures from six leading AI companies regarding their contracts and collaborations with the Department of Defense (DoD). The inquiry centers on governance frameworks, legal oversight, and safeguards to prevent misuse of AI technologies, including autonomous weapons and mass surveillance applications. This action follows concerns about the DoD's AI strategy lacking comprehensive accountability measures and the recent classification of an AI vendor as a supply chain risk. Procurement professionals should note the heightened congressional scrutiny on AI vendors' compliance with ethical and security standards in defense contracts.

• Why this matters: Increased transparency demands may affect contract negotiations and vendor selection criteria for AI-related procurements within the DoD.
• Agencies and contractors should anticipate potential updates to AI governance requirements and supply chain risk assessments impacting procurement eligibility.
• Companies engaged in AI solutions for defense should prepare to demonstrate robust legal and ethical safeguards aligned with congressional expectations.
• This development signals a growing emphasis on responsible AI use in national security, influencing future contract terms and oversight mechanisms.

Senate Budget Committee Chairman Lindsey Graham announced plans to initiate a second GOP budget reconciliation bill focused on increasing funding for military operations, homeland security, and voter integrity enhancements. This legislative effort, supported by President Trump and Senate Majority Leader John Thune, aims to secure between $150 billion and $450 billion in defense and federal law enforcement funding for fiscal year 2027. Coordination with House Budget Committee Chairman Jodey Arrington is ongoing to align priorities. The bill is designed to pass with GOP votes alone, emphasizing national defense and public safety funding during President Trump's second term.

• Why this matters: Procurement professionals should anticipate increased defense and homeland security budgets that could expand contracting opportunities across military and federal law enforcement sectors.
• The broad funding range indicates potential for significant new contracts and program expansions, requiring readiness for rapid response to solicitations.
• Coordination between Senate and House budget committees suggests alignment on funding priorities, which may accelerate procurement timelines.
• Contractors specializing in defense systems, homeland security technologies, and election integrity solutions may find enhanced demand as the bill progresses.

Senator Shelley Moore Capito secured Congressionally Directed Spending (CDS) allocations for Fiscal Year 2026 to fund multiple economic development initiatives across West Virginia. These allocations support projects including renovations to the Small Business Incubator and Business Hub in Charleston, expansion of affordable childcare in Beckley through a public-private cohort model, and technical assistance to entrepreneurs via the WV Hive Network, Inc. The funding aims to bolster small business growth, workforce training, childcare access, and infrastructure improvements statewide.

• Key agencies involved: West Virginia Department of Agriculture, Nicholas County Commission, Putnam County Development Authority
• Contract values: $800,000 for business incubator renovations, $750,000 for childcare expansion, and $750,000 for entrepreneurial technical assistance
• Why this matters: Procurement professionals and contractors in West Virginia should evaluate opportunities related to infrastructure upgrades, childcare services, and business support programs funded through these CDS allocations
• These projects indicate increased state-level investment in economic development, creating demand for construction, professional services, and program management vendors
• Organizations can leverage this information to align proposals and partnerships with local government priorities and CDS-funded initiatives

Congress has reintroduced comprehensive legislative packages, including the Black Maternal Health Momnibus Act and the Perinatal Workforce Act, aimed at addressing the maternal health crisis in the United States with a focus on reducing maternal mortality and racial disparities. These bills target expanding and diversifying the maternity care workforce, improving culturally congruent care, enhancing data collection, and funding community-based organizations. The legislation emphasizes urgent congressional action to improve maternal health outcomes, particularly for Black mothers and other vulnerable populations.

• Federal agencies and healthcare contractors should anticipate increased funding opportunities and program requirements related to maternal health workforce expansion and community health initiatives.
• Procurement professionals may see new solicitations for services supporting data improvement, mental health support, and culturally competent care models.
• Organizations involved in maternal and perinatal healthcare services should evaluate how these legislative efforts could influence contract priorities and funding allocations.
• The focus on workforce diversification and social determinants of health indicates potential growth in contracts for training, outreach, and community-based healthcare delivery.

Senate Republicans have repeatedly blocked legislation proposed by Senator Jacky Rosen and others to separately fund and pay Transportation Security Administration (TSA) workers during the ongoing Department of Homeland Security (DHS) shutdown. This marks the ninth time such legislation has been blocked, prolonging the funding impasse that also affects other DHS components including FEMA, CISA, and the Coast Guard. The core disagreement centers on whether TSA funding should be separated from broader DHS funding, with partisan disputes primarily focused on immigration enforcement policies related to Immigration and Customs Enforcement (ICE). This continued legislative deadlock directly impacts TSA employees' compensation and the operational funding of critical homeland security functions.

• Procurement professionals should be aware that the DHS shutdown and funding impasse may delay or complicate contract awards and payments related to TSA and other DHS agencies.
• Contractors supporting TSA, FEMA, CISA, and Coast Guard operations may face uncertainty in contract execution timelines and funding availability until the legislative deadlock is resolved.
• Organizations involved in homeland security procurement should evaluate risk mitigation strategies for potential funding disruptions and monitor congressional actions closely for changes in DHS appropriations.
• This situation underscores the importance of understanding how broader political disputes can affect agency funding streams and procurement cycles within federal homeland security operations.

The Environmental Protection Agency (EPA) under the Trump administration has issued a temporary waiver allowing the nationwide, year-round sale of E15 fuel through summer 2026. This regulatory action expands market access for ethanol producers and supports agricultural stakeholders by enabling greater consumer choice and promoting domestic biofuels. Senators John Hoeven of North Dakota and Jerry Moran of Kansas have publicly endorsed this move, emphasizing its benefits for energy independence, agricultural markets, and fuel affordability. Both senators advocate for Congress to enact legislation to make this policy permanent, providing long-term regulatory certainty for industry participants.

• Why this matters: Procurement professionals and contractors in biofuels and energy sectors should note the expanded market opportunities created by the EPA's waiver, which may increase demand for ethanol production, distribution, and related infrastructure.
• The temporary nature of the waiver through summer 2026 highlights the importance of monitoring legislative developments for permanent policy adoption that could affect long-term procurement planning.
• Organizations involved in agricultural supply chains and energy procurement can leverage this policy to support domestic biofuel sourcing and align with federal energy security goals.
• Contractors should evaluate potential impacts on fuel supply contracts, infrastructure upgrades, and compliance requirements associated with E15 fuel distribution and sales.

Senator Jack Reed has formally requested Treasury Secretary Scott Bessent, chair of the Financial Stability Oversight Council (FSOC), to initiate an urgent and comprehensive review of systemic risks in the private credit markets. This request emphasizes concerns about reduced oversight capacity at FSOC and the Office of Financial Research (OFR), calling for detailed mapping of market participants and forward-looking risk assessments to identify potential financial vulnerabilities. Procurement professionals supporting FSOC, OFR, or Treasury operations should anticipate increased demand for analytical, data mapping, and risk assessment services to enhance financial market oversight.

• FSOC and OFR may seek contracts for advanced financial data analytics and systemic risk modeling tools
• Treasury-related procurement could prioritize vendors with expertise in financial market surveillance and interconnectivity analysis
• Organizations providing financial research services should evaluate opportunities to support forward-looking risk assessments mandated by FSOC
• This development signals potential expansion of oversight-related procurement activities in Washington, D.C., impacting budget planning and vendor engagement strategies

Senator Catherine Cortez Masto introduced the Douglas County Economic Development and Conservation Act to transfer federal lands managed by the Bureau of Land Management (BLM) and U.S. Forest Service to local and tribal authorities in Nevada. This legislation authorizes conveyance of approximately 7,777 acres to Douglas County for land management, 67 acres to the State of Nevada for Lake Tahoe-Nevada State Park, and 724 acres at Dance Hill to the Washoe Tribe for cultural preservation. Additionally, up to 31.5 acres of BLM land will be disposed of for economic development, with proceeds funding Carson River floodplain protection projects. The bill aims to enhance local control over land use, support flood mitigation efforts, promote outdoor recreation, and preserve cultural and natural resources in the Carson Valley region.

• Why this matters: Procurement professionals should note the increased role of local and tribal entities in managing conveyed lands, which may lead to new contracting opportunities for land management, flood mitigation, and recreational infrastructure projects.
• The legislation enables Douglas County and the Washoe Tribe to directly oversee land stewardship, potentially streamlining procurement processes for environmental and cultural site services.
• Economic development provisions tied to land disposal could generate demand for construction, environmental consulting, and infrastructure services funded by proceeds.
• Organizations serving Nevada public lands should evaluate how this shift in land management authority affects future solicitations and partnership opportunities in the region.

Senator Jon Ossoff has secured $21.4 million in federal funding for the Small Business Administration's Veterans Outreach Program to enhance support for veteran-owned small businesses, particularly in Georgia. This funding aims to expand training, mentorship, and resources for veteran entrepreneurs and service-disabled veteran business owners nationwide. The bipartisan effort reflects ongoing legislative commitment to strengthening veteran business development and economic participation.

• Why this matters: Procurement professionals should note increased federal investment in veteran-focused small business programs, which may lead to expanded contracting opportunities for veteran-owned firms.
• Agencies and contractors supporting veteran entrepreneurship programs can anticipate enhanced funding and potential new solicitations under SBA initiatives.
• Businesses and service providers specializing in training, mentorship, and veteran outreach services should evaluate opportunities to partner with SBA or veteran business networks.
• Organizations involved in Georgia's veteran business ecosystem may see direct benefits from targeted resources and should align strategies accordingly.