Mergers & Acquisitions

I recently had the honor of taking part in a thought-provoking panel discussion titled “GovCon M&A: Unveiling the 2023 Landscape and Forecasts for 2024.” This illuminating webinar featuring Sharon Heaton, the Founder and CEO of sbLiftOff, and Kenneth Dodds, Vice President at Live Oak Bank, was a deep dive into the world of Government Contracting Mergers and Acquisitions (M&A).Continue Reading GovCon M&A: What Is Going On In 2023? Predictions for 2024 (On-Demand Webinar)

I am looking forward to presenting a panel titled “Mergers and Acquisitions” for the 2023 PubK’s GovCon Annual Review Conference alongside Susan Gabay (Houlihan Lokey) and Damien Specht (Morrison Foerster LLP). Our session will take place virtually on January 11, 2023, at 4:00pm ET.

For more information and to register, please click here.

The Anti-Assignment Act, referring to both the Assignment of Contracts Act and Assignment of Claims Act, which prohibits the assignment of government contracts and claims, respectively, has had a fairly uneven applicatory history. On June 27, the U.S. Civilian Board of Contract Appeals (CBCA) did its best to clarify the legislation’s “operation of law” exception as it relates to contractor mergers and acquisitions. The CBCA sided with the government contractor, agreeing that following a merger, the surviving entity was entitled to perform on the former entity’s contract, by “operation of law,” regardless of the alleged misrepresentation, in ATS Trans LLC dba Around the Sound/TransPro v. Department of Veterans Affairs.
Continue Reading CBCA Opinion Provides Clarity on Anti-Assignment Act’s Murky “Operation of Law” Exception

Numet Machining Techniques, a Connecticut-based machined parts manufacturer for commercial and military aerospace engines, recently agreed to pay $5.2 million to settle alleged violations of the False Claims Act (FCA) for misrepresenting its size standard following an acquisition.
Continue Reading Buyer Beware: Settling FCA Allegations Costs Manufacturer $5.2 Million

Information technology (IT) and consulting businesses have continued to attract private equity attention and dollars. For IT businesses contracting with the federal government, there are additional attractions for private equity investors.

Benefits of Federal Businesses

For starters, federal government business is not as exposed to the vagaries of the U.S. consumer economy as pure B2B or B2C businesses. It is true that the federal sales cycles can be much longer than in the commercial sector.  However, this cuts both ways as once a contract is awarded, it tends to be relatively long-term (up to five years in most cases) and the Federal Acquisition Regulations (FAR) procurement requirements disincentivize the government from terminating a contract for convenience, thus protecting the business from cost-undercutting, at least until a re-compete.

There are also high barriers to entry into the federal marketplace, including regulatory compliance programs and requirements to demonstrate experience. Finally, the size and creditworthiness of the customer, coupled with the relative “stickiness” of contracts awarded, make these investments financeable by lenders knowledgeable about the sector.  Given these attributes, it is little wonder that more and more private equity sponsors are expanding into the federal market space.Continue Reading Revisiting Private Equity Investment in Federal IT Contractors

On Wednesday, June 24, Bass, Berry & Sims continued its COVID-19 M&A Environment: Dealmaker Perspectives Webinar series with leading professionals in the government contracts services industry. The panelists included Bass, Berry & Sims members Jason Northcutt and Todd Overman, who were joined by Craig Reed, Chief Growth Officer and Senior Vice President at Serco; Kate Troendle, Director at KippsDeSanto & Company; and Eric Wolking, Operating Partner at Bluestone Investment Partners. A recording of the webinar can be found here.

The panelists’ discussion focused on market considerations for deal professionals in the new and evolving era of COVID-19. Some of the key takeaways from this installment are listed below.

  • Market Improvement Observations. As with other sectors, the government contracts services industry experienced a slowdown in deal flow as participants assessed the uncertainty surrounding the pandemic and endured the chilling effects of the implementation of quarantine procedures. However, the government contracts services industry was impacted less severely than other industries as smaller, quality transactions continued to close over the past few months. Notably, the indexed share price performance for government services continued to trade above the S&P 500 and recently rebounded to near-record highs achieved in February.
    Continue Reading Key Takeaways from the COVID-19 M&A Environment: Government Contracts Dealmaker Perspectives Webinar

Join Bass, Berry & Sims attorneys and leading industry dealmakers for a series of lively panel discussions focused on the nuts and bolts of executing a buy- or sell-side deal in a post-pandemic environment. Each discussion in this series will focus on industry-specific guidance, including food and beverage, retail and healthcare, among others. The June 24 installment of the series will focus on the government contracts services industry.

With social distancing and travel limitations, regulatory changes and approvals, COVID-19-specific diligence, and financing considerations top of mind, our panelists from within the government contracts industry will share their experiences and perspectives on what deal professionals should consider in a new and evolving market.Continue Reading COVID-19 M&A Environment Dealmaker Perspectives Webinar Series: Government Contracts Dealmaker Perspectives

We recently wrote an article in Bloomberg Law discussing the impact mergers, acquisitions, spin-offs, and restructuring transactions can have on pending bids for government contracts. The article overviews recent bid protest decisions and provides practical guidance on diligence, deal timing and communications with government customers regarding transactions.

The effect of transactions on pending government contract bids is largely governed by the Anti-Assignment Act, which generally prohibits the transfer of a government contract to another party without a government waiver or post-closing novation. “However, transfers ‘incident to the sale of an entire business or sale of an entire portion of a business,’ i.e., transfers occurring ‘by operation of law’ are excepted from the statute,” we clarified in the article.

When evaluating whether a transaction will materially affect a bidder’s ability to perform the contract, we recommend that parties to the transaction consider the following:Continue Reading How Transactions Involving Government Contractors Can Impact Pending Bids

Please join the Bass, Berry & Sims Government Contracts & International Trade attorneys as they continue a series of complimentary briefings via webinar that will serve as an extension of our GovCon & Trade Blog and feature timely and practical guidance on key topics of interest.

The next GovCon & Trade briefing, hosted by Bass,…

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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