Sequestration and Government Shutdown Negatively Impacting Majority of Government Contractors

According to a new poll from Market Connections and Lohfeld Consulting, nearly two-thirds of government contractors experienced moderate to significant revenue decline in 2013 as a result of sequestration and the government shutdown.

Here are some of the key findings of this poll:

  • Nearly one-third (31 percent) of contractors said their revenue declined more than 10 percent in 2013 due to sequestration and the shutdown.
  • Another 30 percent declared moderate revenue declines of up to 10 percent.
  • Fifteen percent of respondents experienced moderate to significant growth, while 16 percent said revenue remained flat.

“It is clear that sequestration and the government shutdown have had a tremendous impact on the government contracting community,” said Lisa Dezzutti, President and CEO of Market Connections, Inc., in a recent press release.  “Contractors need to think outside the box, leverage their expertise in adjacent markets and focus on business development and capture strategies that will increase win rates.”

Clearly, 2013 was a challenging year for government contractors.  However, the new budget resolution, which aims to avert another government shutdown, could signal better times ahead for government contractors.

“If your firm’s revenue grew at all in 2013, you should feel pretty good because you were the exception in the market,” said Robert Lohfeld, CEO of Lohfeld Consulting Group, in a recent FedConnects post. “Personally, I’m glad to see 2013 coming to a close, and I remain optimistic about 2014. It looks like Congress will pass a budget, and the president will undoubtedly sign it into law. This greatly reduces the uncertainty in the market, and there is even encouraging discussion that some of the sequestration cuts may be restored.”