Smart Business Dealmakers: The Middle-Market M&A Podcast M&A Trends in The GovCon Space
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Aug 14, 2025 Wright Lewis, a Partner at Dunlap Bennett & Ludwig, specializes in advising government contractors on M&A. He discusses the evolving landscape in the government contracting sector, particularly the impact of new SBA rules and budget cuts threatening company valuations. Wright highlights strategic differences between government and commercial M&A, the importance of due diligence, and identifying red flags in contractor evaluations. He also emphasizes the urgency for small businesses to sell before rule changes take effect in 2026.
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Cuts Shift Buyers To Flight-To-Quality
- DOGE-driven federal cuts have been the primary drag on GovCon M&A this year.
- Buyers now favor mission-critical, modernization-focused contractors like cybersecurity and AI.
Contracts And Past Performance Are Strategic Currency
- GovCon strategic M&A often targets access to agencies, contract vehicles, and past performance.
- These assets act as immediate market access and materially boost win probability on future awards.
Plan Your Exit With Size And Capital In Mind
- If you're selling, consider timing, retirement, or partnering with a larger firm for capital.
- Explore partial rollovers or private equity partnerships to scale beyond small-business size limits.