KippsDeSanto’s Jon Yim: GSA Contract Vehicle Consolidations Bring ‘More Uncertainty’ in M&A Market

Jon Yim, a director at investment bank KippsDeSanto, has cited potential implications of the General Services Administration’s efforts to consolidate contract vehicles for buyers and sellers seeking to enter the mergers and acquisitions market.

Yim wrote in a blog post posted Oct. 26 the changes that contract consolidation has brought to the M&A market have resulted in “reduced visibility” for both potential acquirers and sellers and have exposed them to “more uncertainty.”

“In addition to the perennial problems of winning recompete work on existing contracts, potential targets now have legitimate concerns over whether their contracts will be continued into the next generation,” Yim added.

He noted that many existing contractors have lost positions on the current Transformation Twenty One Total Technology Program as a result of the implementation of the T4 Next Generation vehicle that consolidated several contracts.

Yim said companies that seek to become principal contractors on full and open contract vehicles have welcomed the consolidation of F&O contracts.

“More companies are looking to acquire targets with F&O prime positions on these major contract vehicles to gain access to desirable assets and new customers in order to bolster revenue in lieu of organic growth,” he wrote.