Government contractors say they are making less money than at any time in the last 18 years, including 56 percent of the respondents revealing they made less than 5 percent profit off their government contracts in 2012.

 

Grant Thornton's 18th annual study of the government contractor industry details the impact of the changing federal procurement environment.

 

"I think we are seeing, probably, the government is spending less money on contracts, and that's being reflected in the revenues and the companies are beginning to diversify," said Lou Crenshaw, who leads Grant Thornton's aerospace and defense industry market and is a retired Navy vice admiral. "This year, for instance, less companies received work from the federal government as an overall percentage of their revenue. So we are seeing a move of the companies to the commercial sector."

 

 

Crenshaw, who presented the preliminary results of the survey at a luncheon sponsored by AFFIRM in Washington Friday, said vendors overall saw a 9 percent drop in revenue and a 16 percent drop for those working with DoD last year.

 

Additionally, 38 percent of the respondents said they saw decreased revenues — a 9 percent increase over last year — while 35 percent saw increases, a 15 percent decline over 2011.