COVID-19 in Government Contracting–Some Winners Emerge

The COVID-19 pandemic is causing tremendous disruption in the government contracting community, including delayed or cancelled contracts and extended payment delays. For others that provide goods or services related to the national response, this time has been an opportunity for growth. While the complete picture may not be clear for some time, here is our view of the biggest “winners,” relatively speaking, in government contracting since the COVID-19 pandemic began:

  • Pharmaceuticals and medical supplies: Much of the money the government has awarded in contracting dollars to help fight the pandemic has gone to pharmaceutical manufacturers to develop vaccines and treatments, as well as companies that make medical supplies like ventilators, N95 face masks, thermometers, and testing kits. In addition, capital needs to be spent on staffing these new testing stations.
  • Logistics and delivery: With shelter-in-place orders continuing in many parts of the country, contractors that help deliver goods and services to people’s doors have seen their work elevated to a critical priority.
  • IT Services: With the majority of state and federal business being conducted remotely for the foreseeable future, information technology contractors and companies that provide videoconferencing are in high demand.
  • Cleaning: In order for people to feel comfortable entering offices and other workplaces, hygiene must be very clearly and visibly prioritized. Thus, companies who make cleaning products–as well as their suppliers–and provide cleaning services are seeing their business skyrocket.

The one common bond for contractors facing both surges and setbacks is the need to strengthen their financial positions. Government payment delays exist in good times and bad – and contractors need to have the capital to deliver on immediate project work as well as a cushion to allow for a fast response when budgeted projects come back online. When the recovery from COVID-19 takes place, the real winners in government contracting will be the ones best prepared to respond to the “new normal” of agency needs.