Tom McMillen’s 2012 Outlook: You Ain’t Seen Nothin’ Yet
by Tom McMillen
After November 23 when the Congressional Super Committee must send its recommendation to Congress or face automatic cuts, the federal procurement landscape will never be the same. To reach approximately $1.2- $1.5 trillion in deficit reduction over 10 years will require extraordinary discretionary cuts. Maryland and Virginia are particularly vulnerable because of the significant federal procurement contracts. There will be growth in some limited areas: cybersecurity, health care, the cloud,etc but it will be a difficult environment for most contractors. Similar to the defense cutbacks in the 90s, the avenue for growth for many large contractors will be consolidation and acquisitions. We just sold our last government contractor and our divestiture decision was largely based upon the coming fiscal environment. The rock song, “You Ain’t Seen Nothing Yet” is a prescient warning for government contractors in the turbulent times ahead.