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The $18M GovCon Business

9 snips
Jan 20, 2026
Guest
Josh Tonneson
In this discussion, Josh Tonneson, aQuality of Earnings expert and founder of Tonneson Accounting Services, dives into the complexities of a government contracting business generating $20M in revenue. The team evaluates the implications of its Service Disabled Veteran Owned Small Business (SDVOSB) status and the challenges of declining revenue streams. They highlight the risks tied to contract renewal, financial transparency, and potential valuation pitfalls, ultimately weighing the business's attractiveness to future buyers.
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INSIGHT

Supply-Chain-As-A-Service Described

  • The company is essentially a supply-chain-as-a-service firm that sources, procures, and drop-ships for defense and healthcare clients.
  • It leverages 222 vendor relationships and automation to fulfill mission-critical orders quickly.
INSIGHT

2025 Revenue Drop Raises Red Flags

  • Revenue fluctuates around $16–$18M with a projected decline to $15.9M in 2025.
  • The drop raises concerns about lost contracts or non-recurring project revenue masking underlying declines.
INSIGHT

Large Contract Pipeline Helps But Needs Scrutiny

  • The business holds $58.4M of contracted or repeat revenue through 2029 according to the listing.
  • Long contract lifetimes can support confidence, but details on transferability and renewal matter more.
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