Backlog and recompetes
Buyers start with a schedule of every contract, its value, its end date and when it will be rebid. A contract that ends next year and must be recompeted counts for much less than one with years left.
They also check how each award was won. Work won on merit and repeat past performance is worth more than a single lucky award.
Small business status
Some contracts are set aside for small businesses. If a larger buyer acquires you, the company may no longer qualify, which can change how those contracts are valued. Ask your attorney early.
The same goes for any special certifications. Buyers want to know which ones transfer and which end at closing.
People and clearances
In this business, cleared and trained staff are the asset. Buyers ask who holds clearances, who the program managers are and whether they will stay. The owner should expect a defined transition period.
Asset sale or stock sale
How the deal is structured changes what the government has to approve. Our guide on contract novation and SAM registration explains the difference in plain terms.
What buyers ask for in diligence
Expect requests for contract files, indirect rate history, accounting system records and a list of key personnel. Keep them in one shared folder so each request is answered once.
A sudden dip in revenue during the sale makes buyers wary, so keep performing until closing.
See how buyers finance a purchase and how a seller note can bridge risk.
Getting ready
Gather contract files, performance reviews and a clean list of subcontractors. Keep revenue steady through the sale, since a sudden drop or spike makes buyers cautious. Then request a price range.
Who Writes the Check
- Larger prime contractorBuys capabilities, customer access and cleared staff it can bid with on bigger awards.
- Private equity backed services platformLooks for steady federal revenue and a leadership team that stays through the transition.
- Strategic competitorWants the contract vehicles and the past performance record to win new work.