Home / News / Weekly Roundup April 11 – April 15 2016: FTC, DOJ Speak on Defense Consolidation & more

Weekly Roundup April 11 – April 15 2016: FTC, DOJ Speak on Defense Consolidation & more

April 11 – April 15 2016

DOD Forum
Next-Gen Federal IT
Cybersecurity Summit

A Note From Our President & Founder Jim Garrettson

Consolidation among companies in the government services sector over the last half-decade has inevitably led market observers to ponder the prospects of merger-and-acquisition deals between the largest GovCon platform and product makers.

At various points over the last six months, chief U.S. military weapons buyer Frank Kendall has expressed his concerns over the idea that the number of prime defense contractors could shrink in numbers and potentially reduce market competition in the area.

He first told a group of defense reporters in early October that the Defense Department wanted to work with Congress on legal tools to maintain the current prime defense composition as is, then subsequently took to CNBC’s airwaves a couple of weeks afterward to reiterate that message.

On Wednesday, the Justice Department and Federal Trade Commission weighed in on the matter and said they also want to use their status as antitrust agencies to “work closely” with the Pentagon to analyze any potential merger or acquisition in the defense industry.

Both the FTC and DOJ described their “necessarily general” antitrust guidelines as applicable to the defense sector but also highlighted its unique aspects affected by any major deal or acquisition.

“(We) also consider… high barriers to entry, the importance of investment in research and development,  and the need for surge capacity, a skilled workforce, and robust subcontractor base, ” the joint statement said.

A Pentagon spokesperson subsequently told Reuters DoD has ended its push for new legislation to regulate GovCon M&A deals for national security reasons.

All of the U.S.’ “Big Five” contractors (Boeing, General Dynamics, Lockheed Martin, Northrop Grumman & Raytheon) and other primes will report first quarter earnings in April’s final week, which gives analysts their chance to get industry’s point-of-view on the M&A landscape.

THE WEEK’S OTHER TOP GOVCON STORIES

IBM Vet David Hathaway to Head Defense, Intell Business for Global Business Services Segment
Hathaway previously led public sector application development functions for the GBS segment and is a 14-year Big Blue veteran.
Jacobs Seeks to Expand IT Security Offerings Through Van Dyke Purchase
Columbia, Md.-based Van Dyke provides cybersecurity technology products and services to U.S. defense and intelligence agencies.
Zachary Bookman: OpenGov Adds Open Data Mgmt Tools With Ontodia Buy
Silicon Valley-headquartered OpenGov seeks to expand its data analysis market presence in the U.S. public sector.
Diane Murray on Her Agenda for Deloitte’s Federal Civilian Sector; Data Mgmt & Biz Intell Trends at Agencies
Murray offered ExecutiveBiz an update on her transition into the sector’s leadership role and long-term outlook.
WWT, HPE to Collaborate on DISA Enterprise Storage Services II Contract; Joe Ayers Comments
HPE will provide its storage system to WWT for the potential 6-year, $427 million contract initially awarded in 2014.
NSA, Parsons Facilitate 2016 Cyber Defense Exercise; Mary Ann Hopkins Comments
At least 150 students from military institutions are competing in the four-day event to test their computer network security skills.
Deloitte: US Aerospace, Defense Exports Hit $143B During 2015
A&D exports represented almost one-tenth of overall U.S. goods-and-services sales to other countries.
White House Unveils 10 Members of Natl Cybersecurity Commission
The commission’s formation is part of a White House executive order issued in February as part of a larger cyber action plan.
Tony Scott: White House to Name Federal Chief Info Security Officer by Mid-May
A federal CISO would have responsibility for the oversight and management of cybersecurity functions in government computer networks.
Navy Appoints Rear Adm. Christian Becker SPAWAR Commander
Becker will lead the San Diego-based command that oversees procurements of information warfare technologies for the Navy.

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