Agency budget problems haven’t slowed need for government contracting services

Despite budget problems in several government agencies, the need for government contracting professional services continues to grow rapidly, according to a Grant Thornton LLP white paper on the government contracting industry. The government’s increasingly diverse skills gap, combined with its demography – it has 2 ½ times as many people over 55 as it does under 30 – has driven the government market for professional services from just over $100 billion a few years ago to over $260 billion in FY07.

Yet contrary to recent public and political perceptions, government contracting is typically not a business that generates abnormally high profits. The State of the Government Contractor Industry: 2008, which analyzes results from the 13th Annual Grant Thornton Government Contractor Survey, found that more than three-fourths (76%) of surveyed companies reported a pre-tax profit of 10 percent or below. Additionally, almost one-third of the survey respondents do not report more than 40 hours a week, and, as a result, lose revenue on employees’ overtime.