A Real Economy publication

Government contracting outlook

Spring 2023

Apr 24, 2023

Government contracting outlook key takeaways

The government will continue to outsource the execution of many initiatives to contractors.

Artificial intelligence and machine learning are changing the environment for contractors.

Protecting intellectual property is a top priority for both contractors and the government.

Spring 2023

Government contractors must ensure that they stay compliant with heightened regulations.

The U.S. government has written some large checks lately—for COVID-19 relief, infrastructure investment, Ukraine aid and the fiscal year 2023 omnibus budget package. The government has outsourced execution of many of these initiatives to contractors, and will continue to do so. But Washington wants taxpayers to know their tax dollars are stewarded well. An emphasis on public trust means heightened regulations for government contractors as contracts are awarded and funds are disbursed. Contractors cannot lose sight of these requirements as they compete in a consolidating industry that may start courting new entrants looking to get in on the action.

Federal government contractors all share the challenges of operating in a highly regulated environment. What differs is how they choose to differentiate, where they focus investment, and how efficiently and effectively they maintain compliance.

Winter 2023

Technology and innovation are foundational for the U.S. federal government to serve and protect its citizens. To do this well, the government must work with contractors to develop cutting-edge solutions, educate its acquisition workforce to guide the procurement process effectively, and put safeguards in place to ensure its achievements are protected. This is a challenging but worthy pursuit that government contractors are ready to tackle in partnership with their government customer.

Strategics moving into venture capital

Public defense contractors have frequently played the part of strategic acquirer in a robust and resilient merger and acquisition market. Now those same companies are taking on the role of investor, making strategic minority investments in pioneering businesses via their venture investing arms. This was a common topic of conversation during third-quarter earnings season, with multiple executives announcing injections of cash into their venture funds and/or the deployment of those funds via strategic investment.

RSM contributors

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