Dec 24, 2010

Mark Ferrante

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Deltek’s Clarity 2010 Industry Report sheds light on the year in review.

For 2010, Government Contractors faced lower profit margins, lower overhead rates, and longer Days Sales Outstanding across the board based upon Deltek’s Clarity 2010 Govcon Industry Report .  2010 was a tougher economic year for the government contracting industry than the previous and government contractors showed a lack of growth in revenue with some respondents indicating negative growth for 2010.   While the financial outlook for the future appears rather unstable, as some departments of the federal government have pledged to cut spending, it was noted that more mid to large sized companies acknowledged that they have definite M&A plans to buy or sell in the near future.  Based upon the report, access to capital is not as large of a concern, and larger companies may be looking to generate growth even with looming budget cuts, and believe they may find value in smaller struggling companies.  More information on the full report and seminar can be found at Deltek’s Clarity website.

For the second year in a row, the report listed the primary compliance concerns of contractors as follows: Indirect rates, Labor & Timekeeping, and Unallowable Costs remained at the top of the report’s list of audit issues.

Compliance with these specific areas is a necessity of any government contractor doing business with the Federal government.  If questions arise regarding your company’s indirect rates, timekeeping, or compliance with federal government standards please contact Aronson & Company’s Government Contracts Solutions Group.