Federal Hot Minute July 22, 2012
Government business can be lucrative BUT expensive to pursue.
So like all industries, the investment community plays a vital role in this market.
Investment firms provide guidance to investors, they finance mergers, acquisitions, or help fund operations as a contractor patiently awaits the outcome of their bid.
Therefore the recent Washington Post article on investors turning bearish about government contracting is noteworthy. Budget cuts – particularly resulting from the fiscal cliff we’re approaching – is cited as the cause for the 15% decline of the Bloomberg index of federal contractors.
To be sure, these budget cuts will hit different companies differently.
A second story in the Post cites how some smaller firms, in this case Salient Federal Solutions, have taken precautions as they prepare for Sequestration.
The government market will remain enormous. Yet, contractors will apply more focus to their financial strategy and investor relations as they choose opportunities to pursue.
For links to these articles and others, please go to WJLA.com/bizgov.
I’m Steve Vito of UpsonVito.
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