Category Archives: Mergers and Acquisitions

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What You Need to Know About Mergers and Acquisitions Involving Government Contractors and Their Suppliers

Volume X – Accounting for the Cost of Business Combinations Under Government Contracts Mergers and acquisitions create additional costs and complex accounting issues for government contractors.  There are fees for accounting, legal, and business consultants.  There may be restructuring costs associated with combining business operations.  Segments may be closed and retirement plans may be terminated.  … Continue Reading

What You Need to Know About Mergers and Acquisitions Involving Government Contractors and Their Suppliers

Volume IX – Unclassified Contracts?  Foreign Buyers Still Make a Difference Last month, we discussed the extent to which a foreign buyer can introduce an unacceptable level of foreign ownership, control, or influence (“FOCI”) that, absent mitigation, will render the target ineligible for the facility security clearances needed to perform classified work. This month, we … Continue Reading

What You Need to Know About Mergers and Acquisitions Involving Government Contractors and Their Suppliers

Volume VIII – Foreign Buyers Do Make a Difference Not every potential buyer is a U.S. corporation controlled by U.S. interests.  It is important, both for the buyer and the seller, to understand the implications of foreign ownership, control, or influence (“FOCI”) on the feasibility of a sale to foreign interests and the processes that … Continue Reading

What You Need to Know About Mergers and Acquisitions Involving Government Contractors and Their Suppliers

Volume VII—Investing in Small Businesses Numerous government contracts programs support small businesses.  There are prime contracts set aside for various categories of small business entities.  Agencies have small business contracting goals and take them very seriously.  Prime contractors often are incentivized, through evaluation factors, to propose significant small business participation.  They can also face liquidated … Continue Reading

What You Need to Know About Mergers and Acquisitions Involving Government Contractors and Their Suppliers

Volume VI —Organizational Conflicts of Interest:  When the Whole Is Less Than the Sum of Its Parts An organizational conflict of interest (“OCI”) arises when the performance of one contract undermines a contractor’s objectivity or creates an unfair competitive advantage with respect to another contract.  An agency cannot issue an award to a contractor that … Continue Reading

What You Need to Know About Mergers and Acquisitions Involving Government Contractors and Their Suppliers

Volume V—The Land Mines Strewn Throughout the Data Room M&A transactions, like most transactions in life, involve a cost/benefit analysis.  Some cost/benefit analyses are relatively easy to perform.  For example, if I buy an energy efficient appliance, I can calculate the likely savings in energy costs over the useful life of the appliance (the benefit) … Continue Reading

What You Need to Know About Mergers and Acquisitions Involving Government Contractors and Their Suppliers

Volume IV – Key Issues in Government Contracts Due Diligence This posting is the fourth in our ten-part series on unique issues that arise in connection with mergers and acquisitions involving government contractors and subcontractors.  Parts 1 through 3 focused on the structure of the transaction and the implications of that structure on the transfer … Continue Reading

What You Need to Know About Mergers and Acquisitions Involving Government Contractors and Their Suppliers

Volume III—What Happens to Pending Proposals? Thus far in this ten-part series, we have discussed whether and how existing contracts with the Government can be transferred to the buyer or surviving entity when an acquisition, merger, or consolidation occurs. Today, we leave the world of existing contracts and turn to bids and proposals that are … Continue Reading

What You Need to Know About Mergers and Acquisitions Involving Government Contractors and Their Suppliers

Volume II – Obtaining Consent to Assign a Government Contract This posting is the second in a ten-part series on unique issues that arise in the acquisition and disposition of a company that performs government contracts or subcontracts.  Part 1 focused on the types of deal structures that are subject to the anti-assignment statutes, and … Continue Reading

What You Need to Know About Mergers and Acquisitions Involving Government Contractors and Their Suppliers

Volume I – The Structure of the Deal and Government Consent With today’s posting, we begin a ten-part series on unique issues that arise in connection with the acquisition or disposition of a company that performs government contracts or subcontracts. These issues obviously come into play when the target company fits the bill as an … Continue Reading

What Does 2013 Have In Store for Government Contractors and Their Lawyers?

By Louis Victorino and Jonathan Aronie (originally published in the San Diego Business Journal) It has been noted, the more things change, the more they stay the same. In the world of Government Contracts Law, however, the more things change, the more the phone rings. And while we’re only a few weeks into 2013, the … Continue Reading

No Stone Unturned–Mitigating Risk In A Government Contracts Due Diligence

By Marko W. Kipa, Anne B. Perry, and Lucantonio N. Salvi An acquisition transaction involving a government contractor brings with it a unique set of rules and regulations. There is no shortage of frequently changing and complex requirements regulating a government contractor’s operations, and a firm grasp of these requirements is crucial both to arriving … Continue Reading

Court of Federal Claims Reaffirms Exceptions To The Anti-Assignment Act

By: Marko W. Kipa The United States Court of Federal Claims recently reaffirmed the applicability of two exceptions to the Anti-Assignment Act (the “Act”). Liberty Ammunition, Inc. v. United States, 2011 WL 5150221 (Fed. Cl. Oct. 31, 2011). Specifically, the Court acknowledged that (1) the Government may prospectively waive the Act, and (2) the Act does not … Continue Reading

Meso Scale: Re-Defining The Implications Of A Reverse Triangular Merger?

By Lucantonio N. Salvi and Marko W. Kipa A government contracts due diligence encompasses a broad range of statutory, regulatory, and contractual issues. One issue that we always consider is compliance with the Anti-Assignment Act (the “Act”), which prohibits the transfer of a government contract to a third-party. While the Act does not strictly apply to subcontracts, we … Continue Reading

Federal News Radio: Mergers and Acquisitions in the Federal Marketplace

On May 24, 2011, one of our Government Contracts lawyers, Marko W. Kipa, was interviewed by host Roger Waldron on Federal News Radio’s (Washington 1500AM) Off The Shelf – a weekly radio program devoted to topics of interest to the government contracting community. The interview focused on key issues facing government contractors when assessing an acquisition … Continue Reading

Evaluating FOCI In The Context Of An M&A Transaction

By Marko W. Kipa We all now realize that, contrary to the pronouncements of certain pundits, the world is not economically flat.  But it is undeniable that its citizens and businesses are more economically connected than ever before. One manifestation of this interconnectedness is the increasing number of cross-border acquisitions of business enterprises. In most cases these … Continue Reading

Novations: A Simple Checklist For A Not So Simple Requirement

As though the risks inherent in a merger or acquisition were not enough to turn any business person prematurely gray, when one or both of the entities in play are federal contractors, the risks become even greater. One of the primary sources of these additional risks is the federal Government’s novation rules. Anyone looking to buy or … Continue Reading

Treasury Issues Final Rules Describing Procedures For Reviewing Foreign Investment In U.S. Companies

Effective December 22, 2008, the U.S. Department of the Treasury (“Treasury”) issued new rules relating to the procedures that the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) will use in reviewing foreign investments in U.S. companies.  See 73 Fed. Reg. 70702.  The revised, final rules continue to focus on the … Continue Reading

Comments On Proposed CFIUS Rules Range From Cautious Praise To Outright Criticism

As discussed in a prior posting on this blog, the U.S. Department of the Treasury published on April 21, 2008 proposed rules designed to strengthen the process by which the Committee on Foreign Investment in the United States ("CFIUS") reviews and approves certain business transactions involving foreign investment. The proposed rules were issued under the … Continue Reading

Treasury Proposes New Rules For Reviewing Foreign Investment In U.S. Companies

On April 21, 2008, the U.S. Department of the Treasury ("Treasury") proposed new rules relating to the procedures that the Committee on Foreign Investment in the United States (“CFIUS”) should use in reviewing (and potentially halting) foreign investments in U.S. companies based on a potential impact on national security.  See 79 Fed. Reg. 21861.  While … Continue Reading

“Standing Novation”, The Daily Deal, February 8, 2008

A government contractor participating in an acquisition transaction must comply with both commercial and government-specific regulations. And there are numerous issues unique to government contractors that threaten a successful closing. If not identified or mitigated in a timely fashion, a contractor might unknowingly assume liabilities or fail to consummate the deal altogether. One issue involves … Continue Reading
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