What a Buyer Digs Into First
- Contract backlog, option years and when each prime contract comes up for recompete
- Whether you are the prime or a subcontractor, and how much revenue sits with one agency
- Facility and personnel clearances, and whether they survive a change of ownership
- Small business or other set aside status the revenue depends on
- Key program managers and whether they have agreed to stay
Why Buyers Want These Companies
The installations around Colorado Springs support a deep bench of engineering, IT, cyber, logistics and facilities contractors.
Larger firms buy smaller ones to win past performance, cleared staff and a seat on contract vehicles they could not reach on their own.
Private equity groups like the sector for its long contracts and steady payments. Revenue backed by multiyear task orders is easier to finance than revenue that has to be won again every month.
The Value Is in the Contracts
Buyers price these companies on EBITDA and on how long it will last. A firm with three years of funded backlog is worth more than one with the same profit and a big recompete next spring.
Concentration is normal here, since many contractors serve one agency. Buyers accept it, but they look hard at how many separate task orders and contracting officers sit behind the revenue.
Set Aside Status Can Change the Math
If much of your work came through small business, veteran owned or other set aside programs, a sale to a larger buyer may end your eligibility for future awards of that kind. Existing contracts often continue, but recompetes may be closed to the new owner.
That is not a deal killer. It does mean the price should reflect what revenue the buyer can keep competing for, and you should discuss it with a government contracts attorney early.
Clearances and Novation
A facility clearance does not move automatically with a sale, and some contracts require government approval, called novation, before they pass to a new company.
Stock sales often avoid novation but carry other risks. Timing the sale around these approvals is part of the plan.
Preparing to Sell
Gather a contract list with values, periods of performance and option years. Document your indirect rates and any audits.
Our guide on getting your books ready for a business sale covers the financial records, and how buyers price an established business explains the EBITDA math.
If a larger contractor has already approached you, get your own valuation before signing a letter of intent. You can request one here. Owners in the northern part of the county may also want Monument, CO business brokers.