Survey: DOD is most popular agency among contractors, again

Survey: DOD is most popular agency among contractors, again

By Dipka Bhambhani

GCN Staff

MAY 8—The Defense Department remains the best customer of federal contractors, particularly information technology contractors, according to an annual survey by Grant Thornton LLP.

In its recently released report, Government Contractor Industry Survey: The Pulse of a Vital Industry, the Washington, D.C., international accounting, tax and management consulting firm said DOD remains the predominant buyer for the more than 100 contractors surveyed.

Defense was the source last year of just over 47 percent of revenue from companies in the survey, up from 41.2 percent in 1999.

All industry groups within the survey reported increased revenue from DOD over the past year. Information services companies said the percentage of their revenue derived from DOD increased from 33 percent to 42 percent. Among management consulting organizations, the increase was from 9 percent to 25 percent.

Other sectors also reported doing a lot of their business with Defense. Engineering services generated 70 percent of their revenue from DOD, and 90 percent from government overall, the report said. Telecommunications companies said 50 percent of their revenue last year came from DOD.

Chris Mattingly, director of government contracts business services for Grant Thornton LLP, said legislation enacted eight years ago has contributed significantly to growth within the government market.

The 1994 Federal Acquisition Streamlining Act and the Federal Acquisition Regulation Act forced agencies to look for the best value in procurement, not the lowest price, he said. 'That created some initiative, and it started to empower the federal government contracting officers with the ability to make judgements,' Mattingly said.

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