Opportunities abound for SMBs here in 2026. Here’s a look at the intelligent business development tools they must have to capitalize.
Across the business landscape, there are signs that 2026 is bringing more opportunities for small and midsized companies to land new customers and new work.
In its annual Business Leaders Outlook survey of small and midsize companies, for example, JPMorganChase found that more than 60% of small business owners feel more positive about their business now than at any point in the past five years; 74% are optimistic about their company’s outlook for 2026 and 76% expect revenue growth and higher profits this year.
That sense of hope carries over to the world of government contracting, where after a couple trying years, 2026 is shaping up as a promising one for companies that depend to some degree on work from the U.S. government. About two-thirds (65%) of government contracting firms surveyed for the 2025 GAUGE Report from Unanet and Cohn Reznick indicated they are optimistic about the current business environment.
But with all the potential new work come complicating factors for small and midsized businesses (SMBs). One is the persistent shortage of quality labor. Another is inflation, which puts added pressure on operating costs. And for companies that do business with the federal government, there’s also the matter of growing regulatory and compliance scrutiny. All of which means that to win more new business in 2026 and beyond, SMBs better be more on-point than the competition when it comes to identifying, evaluating and pursuing new opportunities, especially if those opportunities involve projects underwritten by Uncle Sam. For many SMBs that do business with the federal government, that’s not a strong suit. In fact, about 80% of GAUGE respondents identified “obtaining and winning new contracts” as their company’s most concerning issue.
The challenge, then, for SMBs is how to position themselves to win a larger slice of a growing pie. Here’s where technology—and artificial intelligence (AI) in particular—can be a real asset. As of 2025, about 77% of SMBs had integrated AI into their operations, according to a Bank of America survey. Among government contractors, 54% reported actively using AI tools in their businesses as of 2025, according to the 2025 GAUGE Report, with 34% using it for business development and marketing.
Headwinds
Not only is there a strong business case for SMBs to integrate AI to support their business development efforts in the government contracting world, there’s a growing array of AI tools to help them overcome some of the biggest obstacles to winning new government business.
One of those obstacles is identifying opportunities that best align strategically with business priorities. One of my contacts at a government contracting firm recently told me their business development person spends an entire day each week looking for new project opportunities. Not only can finding opportunities be time-consuming, it also can be an inexact science. There’s that gnawing feeling you’re overlooking opportunities to which your firm is ideally suited. And with the opportunities you do find, it can be difficult to decide which to pursue.
Compliance represents another big obstacle to winning more government business. Do your proposal writers understand the highly nuanced requirements of each government solicitation? And, does each proposal your firm submits track to the specific requirements of that solicitation? Failing to understand and comply with all the requirements of an RFP can turn a solid proposal into a non-starter.
Recent shifts in government policies are also complicating matters for SMBs interested in pursuing federal contract work. For example, the ongoing Revolutionary FAR (Federal Acquisition Requirement) Overhaul means shorter windows for firms to respond to government solicitations, along with tighter compliance requirements in many instances. Meanwhile, upheaval in the U.S. Small Business Administration’s 8(a) certification program, prompted by a comprehensive SBA audit that earlier this year resulted in suspension of more than 1,000 firms with 8(a) status, is deterring many SMBs from pursuing work through that program.
Scarce business development resources is another issue for firms interested in pursuing government contracts. In the 2025 GAUGE Report, for example, about half of smaller government contracting firms said they’re held back by a lack of business development resources.
None of these challenges is insurmountable. With the help of AI, there’s still plenty of government business for SMBs to win.
How AI Can Help
In fact, AI can play a critical role in just about every stage of the pursuit process. At the top of the funnel, AI market intelligence capabilities can scour the RFP landscape to surface a steady stream of government opportunities [from platforms like SAM.gov and the Federal Procurement Data System (FPDS), along with agency forecasts and teaming networks] so firms don’t miss fast-moving buys, an important consideration given recent changes in the FAR. They can unearth solicitations that firms might otherwise miss, while uncovering others that go beyond their usual agencies or project profiles—and do it much faster than a human being could.
What’s more, AI can zero in on opportunities that align with company parameters and priorities, so firms aren’t burning resources to chase work that doesn’t make sense for them. Then it can intelligently score and rank opportunities, with clear reasoning behind each recommendation. The result: faster, better informed go/no-go decisions, so companies focus on the right pursuits and avoid those that aren’t in their wheelhouse, aren’t a fit strategically, or don’t make sense to pursue based on projected winnability, profitability, etc. That in turns fills the pipeline with the kind of projects a company covets most.
Proposal creation is another area where AI is proving invaluable, helping SMBs make both qualitative and quantitative improvements on that front. By tapping into a firm’s data and information library (past proposals, etc.), it can gather a large share of the information needed for a proposal, update it appropriately, tailor it to the unique requirements of the solicitation, then combine it all into a polished, high-quality first draft (the “pink draft” in government contracting lingo) that is ready for the human touch that leads to a standout, winning bid.
During the proposal creation process, AI can interpret the often highly nuanced and complex requirements of a solicitation, then ensure each proposal tracks precisely to those requirements. Especially with government contracts, seemingly minor details like this can mean the difference between winning and losing a pursuit.
Ultimately, with the ability to create better, more compliant proposals in a matter of hours instead of days or weeks, firms are in a great position to win more bids with fewer resources. Based on data from our customers here at Unanet, these types of capabilities reduce average RFP time-to-draft by 70%, cut proposal-generation costs by 50%, and increase company proposal-creation capacity by 15-20%.
Laying a Foundation for AI
Results like these aren’t a given with AI, however. Whether you’re using them for business development or in some other area of the business, you still need to ensure you have a solid foundation in place to get the most out of the intelligent capabilities you have at hand. Most importantly, perhaps, you want to ensure the data feeding your AI models is clean, connected, and governed. The old “garbage in, garbage out” adage certainly applies here. Having
appropriate oversight, human-in-the-loop practices and governance structures around your AI deployments also is essential.
For any company pursuing government work, transparency, auditability and explainability are critical. Consider developing an AI capabilities and governance statement that explains how and where your firm employs AI, along with the structures it uses to oversee it. You then can include that statement in the proposals you submit.
For SMBs, there’s no shortage of opportunities for new work from the U.S. government and other sources. As versatile and valuable a tool as AI is proving to be for new business pursuits, it’s time more SMBs put it to work to find those opportunities and convert them into wins, revenue and growth.
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