Restructuring Opportunities and Risk Considerations for Government Contractors

February 2012
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Restructuring Opportunities and Risk Considerations for Government Contractors

At a glance

This paper lays out some of the key considerations and pitfalls for government contractors looking to explore reorganization as one of many possible responses to the changing economic environment.

Cutbacks in government spending during the last few years have caused companies to reevaluate their business methods in order to maintain profitability despite reductions in the overall business base. The solutions to this problem are simple when viewed at a high level: increase revenue or reduce cost. As revenue raisers are becoming scarcer and companies increasingly try to figure out how to be stronger, lighter, faster, and more agile with fewer resources, the idea of restructuring materializes as a leading candidate for corporate change. Many companies who have launched into this arena have experienced firsthand the operational, financial, and regulatory complexities surrounding restructuring. Companies that provide products and services to support the US government and protect the war-fighter face an even greater challenge than other companies due to the burden of government contract regulation incremental to the typical business environment. This paper lays out some of the key considerations and pitfalls for government contractors looking to explore reorganization as one of many possible responses to the changing economic environment.