DISA faucets GMU to review monetary dynamics of contracting
George Mason College’s Middle for Authorities Contracting has secured funding to conduct 4 research associated to the Protection Division’s effort to higher perceive monetary and pricing dynamics of contracting.
The middle will begin its analysis later this month and work on the research over the following eight months, GMU mentioned in a launch.
DOD awarded greater than $1 million for the research that may give attention to these parts:
- Free money circulation within the protection sector
- Impacts to money circulation relying on contract sort and financing
- Financing and its impression on small companies
- Authorities accounting system necessities for contractors
Merchandise quantity 4 within the above record touches on an ever-present speaking level on this market: the willingness of economic corporations to do enterprise with the federal authorities.
That is additionally the primary complete evaluation of DOD’s finance insurance policies in over three many years, the Mason GovCon middle mentioned. Late final yr, GMU together with the Universities of Virginia and Tennessee have been awarded blanket buy agreements for related research.
Money circulation has at all times been king for presidency contractors given federal companies are dependable invoice payers. That means a extra steady income than from clients in different sectors even with revenue margins sometimes being decrease in authorities versus industrial markets.
The coronavirus pandemic actually illuminated that issue given what number of corporations and particularly small companies have reported various monetary stresses since March 2020.
These overhangs apparently stay over protection corporations even with the pandemic subsiding and DOD’s efforts to assist decrease the impacts. On the pandemic’s outset, DOD raised the speed of progress funds for big corporations from 80 to 90 % and small companies from 90 to 95 %.
However the state of affairs just isn’t over but for some. Practically one-third of respondents to a Nationwide Protection Industrial Affiliation survey launched in mid-June mentioned they don’t count on their companies to return to regular operations for at the least six months.