Deal Advice for GovCon Acquisition (Part Two)

searcher profile

June 09, 2024

by a searcher from United States Naval Academy in Washington, DC, USA

Value in the GovCon industry is how that company will perform in the future, winning large prime contract. And, the Past/Present Performance is the ONLY proposal section that can't be "finessed" into a high score simply by a knowledgable proposal writer. The Past/Present Performance factor is essentially the "reference section" of your proposal. Again, you can't wordsmith this section. So this is what you should be looking for in a GovCon acquisition. That obviously makes sense. However, Bid Source Selection Boards do not differentiate between an ongoing contract and a recently completed contract (e.g., normally they will accept a past performance as a reference as long as it ended within the past 5 years...although some contracts may limit this to three years.) Now this is where you can find real value. Why pay for the EBITDA x Multiplier for an ongoing contract when a completed contract is just as valuable and has ZERO EBITDA? To find REAL value in the GovCon space, find targets that recently concluded their big contracts that are directly relevant into agencies and services offerings that you're interested in pursuing!

0
1
24
Replies
1
commentor profile
Reply by a searcher
from University of Virginia in New York, NY, USA
Interesting point of view. It makes sense that valuing GovCon businesses on a multiple of past earnings / cash flows may not be reflective of the true value and potential of the business.
If I understand correctly, you would not focus much on the WIP, but rather on how recent experience on big contracts can lead to more contracts?
Join the discussion