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Top defense contractors see 2.5 percent decline in revenue

Defense contractors saw a decline of 2.5 percent in revenue in 2013, mostly due to budget reductions in the Defense Department and other related agencies, according to a new report from Deloitte .

These budget reductions were likely the result of automatic spending cuts and drawing down military forces in the Middle East, according to the report. Seventeen out of the top 20 largest defense contractors saw their revenue decrease.

Despite declining revenue, profitability increased for defense contractors by about 18 percent, though about half of the increase was attributed to the absence of large one-time charges, the report said. Personnel cuts and plant closures also helped improve profits for contractors.

“With U.S. defense budgets being cut, defense contractors are likely to experience continued revenue declines,” Tom Captain , vice chairman of Deloitte’s U.S. and global aerospace and defense division, said in a statement. “We anticipate that U.S. defense contractors will aggressively address this revenue shortfall with foreign military sales, acquisitions, new product introductions and growth in adjacent markets.”

GSA issues guidelines for cyber requirements

Keeping up with new cyber threats can be challenging for contractors.

The General Services Administration this week issued a transition plan guiding cloud computing service providers through new federal cloud security measures.

The GSA’s Federal Risk and Authorization Program management office said updates to the FedRAMP security requirements are expected to be published on June 1. But depending on what stage companies are in the contracting process, they may adhere to existing standards, according to the guide.

A provider that is just beginning the contracting process — still applying to FedRAMP, for instance — should consider the newest requirements and security plan templates, the guide says. Those already engaged in contract discussions should continue using the previous revision of the template; providers currently authorized to work on a contract have one year from the date of their last assessment to implement the new security baseline, according to the guide.

The new requirements are the fourth revision of the National Institute of Standards and Technology’s security control baseline.

ManTech to acquire health IT contractor 7Delta

ManTech International , a Fairfax-based defense contractor, has agreed to acquire Columbia-based IT firm 7Delta .

Financial terms of the deal, expected to close in May 2014, were not disclosed, though ManTech plans to fund it mainly from cash on hand. ManTech is scheduled to announce its first quarter earnings for the 2014 fiscal year on Wednesday night.

Defense contractor 7Delta provides software development, program management, information assurance and other technical services to defense and civilian customers in the federal government, including the Department of Veterans Affairs.

“ManTech made a strategic commitment to the health care IT market, and upon completion of this acquisition, we will have strong capability and presence across the entire spectrum of federal health care, including the VA, [Defense Department], and Health and Human Services,” ManTech chairman and chief executive George J. Pedersen said in a statement.

This is ManTech’s second acquisition in recent months. In February, the company acquired Allied Technology Group, a Rockville-based engineering and information management solutions company contracting with the Homeland Security Department.

Tysons Corner-based investment bank KippsDeSanto advised and represented 7Delta in the transaction.



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