WT Business Beat

By Nick Wakeman

Blog archive
Nick Wakeman

Who's next on the M&A hit list?

I saw an interesting bit of analysis over at GovWin last week, when Alex Rossino wrote a blog that gave a rundown on the Army Global Tactical Advanced Communications Systems contract.

Rossino, a principle research analyst at Deltek, breaks down how the $10 billion contract held by 20 vendors will be used by the Army. In a nutshell, the contract will be the backbone for integrating and supporting a variety of tactical networks, including the Warfighter Information Network-Tactical, the Global Broadcast System and the Blue Force Tracker.

Potentially, this is very lucrative work, and Rossino makes a comment at the end of his blog that holders of the GTACS will likely be good takeover targets for companies that want to expand their footprint with the Army.

I think he’s spot on with that comment. And it is a trend we’ve watched accelerate over the last eight years or so. It was particularly evident when the Homeland Security Department awarded the Eagle contract. I think every small business that won that contract was acquired by larger businesses as the contract grew into being the preferred IT services vehicle for DHS.

GTACS is already following a similar pattern. It was awarded in November and last week, SRA International announced last week that it had acquired MorganFranklin’s national security business, one of the 20 primes.

While SRA’s announcement doesn’t refer to GTACS, it does mention that MorganFranklin brought new contract vehicles to SRA. MorganFranklin’s announcement of the transaction does mention GTACS, and a second large contract, DISA’s U.S. Government Omnibus Network Enterprise contract. So, in essence, SRA scored a "twofer."

Another example is CACI International recent acquisition of Emergint, which is one of 30 primes on the CDC’s $5 billion information management services contract, which is expected to be an important vehicle used for health IT acquisitions.

This kind of mergers and acquisitions activity will likely increase as agencies continue to rely on large task-order contracts. For companies that bid and lose, and then lose the protest, buying their way onto the contract is their only alternative.

And for companies, particularly small and midsize contractors, that win, well, you can expect a lot of phone calls as the suitors come calling.

Posted by Nick Wakeman on Dec 12, 2012 at 7:24 PM


Reader Comments

Wed, Dec 19, 2012 Business CRM Software http://www.aegisisc.com/microsoftcrm.html

A many companies are bid and lose and the protest of buying contract on their alternative.I think every small business that won that contract was acquired by larger businesses as the contract grew into being the preferred IT services vehicle for DHS.

Fri, Dec 14, 2012 Rich Wilkinson Wash Metro Area

If Section 822 of the Senate version of the NDAA survives the Conference Committee, I wonder how it will affect the value of some of these vehicles and their programs. Sec 822 would require ALL prime contractors to perform 50% or more of ALL services work in their contracts and/or delivery orders awarded after roughly 1 April 2013. For vehicles predicated on delivery order pass-through business models, the whole program could break down. (Think Seaport-e) Ironically, a vehicle intended to be heavily subcontracted could become MORE valuable to a buyer if changes to the FAR mandate more effort by the prime.
Going to be interesting!

Fri, Dec 14, 2012 Rich Wilkinson Washington Metro Area

Vehicles held by small businesses IMMEDIATELY lose their eligibility for set-asides upon acquisition by a large business. Still a valid vehicle, but Agencies cannot claim SB credit for orders placed on those vehicles.

Thu, Dec 13, 2012

Will Emergint get to keep its small business seat on its CDC contract vehicle? How about T4 small business seat holders...are they legitimate targets if their seats won't transfer to their new large-business owners?

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
close
SEARCH
 Top 100 Slideshow
contracts DB

Trending

  • Dive into our Contract Award database

    In an exclusive for WT Insider members, we are collecting all of the contract awards we cover into a database that you can sort by contractor, agency, value and other parameters. You can also download it into a spreadsheet. Read More

  • Is SBA MIA on contractor fraud? Nick Wakeman

    Editor Nick Wakeman explores the puzzle of why SBA has been so silent on the latest contractor fraud scandal when it has been so quick to act in other cases. Read More

Webcasts