Survey finds acquisitions pace continues in federal space

One out of five government contractors was involved in a business acquisition over the preceding 18 months, according to a survey just released by consulting firm Grant Thornton LLP.

Companies responding to the survey indicated that their primary strategy was to acquire contracts from another firm, rather than purchasing the entire firm, with an average of nearly four transactions reported per company.

That is just one of the significant findings in the 8th annual Grant Thornton Government Contractor Industry Survey, released today.

Nearly 40 percent of survey respondents participated in governmentwide acquisition contracts, while 43 percent participated in multiple award contracts. More than 70 percent of the respondents said that GWACs and MACs benefit only large companies.

The repercussions of the Sept. 11 terrorist attacks continue to ripple through the government-contracting arena, according to the survey. Twenty-two percent of respondents said they have repositioned their business focus because of the government's redistribution of resources, while 26 percent said they have formally altered their business plans.

"Government contractors have been experiencing a period of great transformation in the industry through the reallocation of government funds and acquisition activity," said Kerry Hall, a partner with Grant Thornton.

The survey's findings reflect responses received in calendar 2002, and include responses from chief executive officers and chief financial officers of professional service firms that consider the federal government to be a significant customer.

Based in Chicago, Grant Thornton LLP is the U.S. unit of Grant Thornton International, a global accounting, tax and business advisory firm. The international firm had revenue of $1.84 billion in 2002, according to online research firm Hoover's Inc., and employed 21,500 people worldwide.