The militaryâs chief weapons buyer sought to throw cold water this week on the idea of consolidation among the U.S.â largest prime contractors in a year that has seen a rapid pace of merger-and-acquisition deals in the government contracting industry.
Frank Kendall — defense undersecretary for acquisition, technology and logistics — told a group of reporters Wednesday the Defense Department wants Congressâ help to examine methods to limit consolidation among the U.S.â top weapons manufacturers, Defense News reported.
Kendall said he expects to start the conversation with Congress within the next few months and cited legal and policy tools as potential means to preserve the defense industrial baseâs current landscape of prime contractors and suppliers.
According to the Wall Street Journal, Kendall raised no objections to Lockheed Martinâs planned acquisition of helicopter maker Sikorsky for $9 billion that cleared the antitrust approval process last week and said he did not directly address any specific deal in his comments.
This year has seen a flood ofÂ GovCon M&A deals not seen since the early 1990s such as Harris Corp.âs purchase of Exelis, the future CSC Government Servicesâ pending acquisition of SRA International, SAICâs buy of Scitor and Engilityâs deal for TASC.
Our newsroom editor Ross Wilkers spoke with Federal News Radio live ThursdayÂ morning for a segment to analyze what Kendallâs comments could mean for GovConâs M&A market and other developments from September surrounding the GovCon Index, Executive Mosaicâs composite stock index of 30 contracting firms.
The Index traded Monday and Tuesday in correction territory, or 10 percent down from its most recent high, before a jump Wednesday to close above that mark.
Wilkers and âIn Depthâ host Francis Rose examined how the Index was subject to the same global economic headwinds that dragged U.S. markets in September, how the upcoming earnings season could give a picture of the GovCon sectorâs health and Aerojet Rocketdyneâs move to get in the action on 2015âs M&A spree.
Click here to listen to the full 9-minute segment that aired Thursday.
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