This is Anjali’s story.
How to sell a federal contracting business at the right time, to the right buyer, for the right price is the question Anjali Patel had been turning over for nearly four years before she picked up the phone. When the right time came, she called CGK Business Sales. Anjali ran a $24M federal IT services firm headquartered in Northern Virginia, focused on civilian-agency cybersecurity for DHS, HHS, Treasury, and IRS plus FedRAMP advisory and cleared cybersecurity engineering on a small TS/SCI bench. Ninety-two employees, roughly seventy-three of whom carried active security clearances at the Secret level or higher, distributed across DC, Maryland, and Virginia on a hybrid model with a Reston headquarters and embedded teams at multiple agency client sites. The firm held a GSA MAS prime contract, a CIO-SP3 prime with the unrestricted-track recompete to CIO-SP4 already underway, Alliant 2 subcontracts on three task orders and NITAAC subcontracts on two, plus a portfolio of agency-specific BPAs at Treasury and HHS. Top five contracts ran about sixty-five percent of revenue, which is typical for federal IT at this scale. She was 51. She had founded the firm in 2008 after a Booz Allen layoff during the post-financial-crisis federal services contraction. Her husband, an engineer at a different defense IT prime, had been ready to slow down for a year. Both kids were now in college, and the next four years of tuition payments were going to be six figures a year. The firm had hit an organic scale ceiling around twenty-five million in revenue, the next bracket of recompetes was going to require either dilutive PE growth capital or a sale to a roll-up platform, and the cleared workforce of seventy-three deserved a buyer who could grow their careers. She came to us in late 2024 because she was thinking seriously about what the next ten years needed to look like and did not know who else to talk to about how to sell a federal contracting business at this size and this clearance posture in a market where the active buyer pool was reshuffling every quarter. This page is what happened next, and what could happen for you. Anjali is a composite, not a single real CGK seller, but the patterns and details are pulled from real federal IT, defense services, federal professional services, and federal construction engagements. Three shorter sister stories below cover what is different when you sell a defense engineering services firm (Mark), a federal-focused professional services firm (Hassan), and a federal construction firm (Tom).
The night before Anjali called us.
Most owners who decide to sell a federal contracting business have been thinking about it quietly for three or four years before they pick up the phone. Anjali was no different. She was 51. For seventeen years she had been the architect of every contract recompete strategy the firm had ever run, the cleared-workforce hiring lead through three different presidential transitions and four different DHS Secretaries, the relationship person on the most senior agency Contracting Officers across DHS, HHS, and Treasury, the person who personally negotiated every CMMC compliance milestone across the firm’s vehicle portfolio, and the one her direct reports asked for by name when a recompete was sliding sideways and the win team needed someone in the room who knew the agency’s history with the incumbent. The business did $24 million in annual revenue, $5.2 million in EBITDA at federal-IT-typical 22 percent margins, and roughly ninety-two employees, of whom about seventy-three carried active security clearances at the Secret level or higher and a small subset held TS/SCI on select civilian-cyber programs. Top five contracts ran about sixty-five percent of revenue, which Anjali had been working to bring under sixty for two recompete cycles. The firm operated on a hybrid model out of a Reston headquarters with embedded teams at multiple agency client sites across the National Capital Region.
Why owners decide to sell a federal contracting business
Anjali’s son was a junior in mechanical engineering at Virginia Tech. Her daughter was a sophomore in cognitive science at Carnegie Mellon. Two more years of full tuition payments at one of them and three more at the other meant the next four years were six figures a year out of after-tax income. Her husband, an engineer at a different defense IT prime, had been ready to slow down for over a year. The bigger pressures were the scale ceiling and the recompete cycle that was about to land: the firm had hit an organic scale ceiling at around twenty-five million in revenue, where the next bracket of federal IT recompetes was going to require either dilutive PE growth capital to fund the bid-and-proposal investment, the past-performance scale, and the indirect-rate restructuring needed to compete against larger primes, or a sale to a roll-up platform that already had that infrastructure. The CIO-SP4 unrestricted-track recompete was going to be the inflection point, and Anjali had been watching three peer firms in her clearance posture and revenue range get acquired in the prior fourteen months as their owners reached the same conclusion. Anjali had been approached seven times in the prior fourteen months: four times by PE-backed federal IT consolidator platforms (two of them aggressive consolidators in the $200M-$500M revenue band building toward Alliant prime status, two of them more disciplined patient-capital platforms with civilian-cyber theses), twice by privately-held federal IT primes looking to add civilian-agency cybersecurity bench to existing defense IT footprints, and once by an 8(a) graduate strategic acquirer who had built a federal services holding company over the prior six years and saw Anjali’s vehicle portfolio as a complement to their existing past performance. Anjali did not know what her firm was actually worth at twenty-four million in revenue with the recompete cycle approaching. She did not know whether the buyers calling her were the right buyers for her cleared workforce. She did not know whether her CMMC Level 2 maturity and her DCAA accounting posture were value-drivers or table stakes. She did not have a single peer in her life who had ever sold a federal contracting business at this size and clearance profile.
That is the night she found CGK and submitted the form. We called her back at 9:08 the next morning.
The conversation we had on the first call.
The first call was 56 minutes. We did most of the listening.
Anjali talked about the cleared workforce of seventy-three and the recompete cycle she had been planning for the last two years to land in early 2026, the way each agency client had its own contracting officer and program manager personalities and how those relationships had been built across two and three contract cycles, the difference between her commercially-priced GSA MAS work and the cost-reimbursable indirect-rate work on her CIO-SP3 task orders, the indirect-rate structure she had spent four months restructuring last year (fringe at 35.4 percent, overhead at 28.7 percent, G&A at 14.1 percent, all DCAA-validated and within band for the federal IT peer set), the CMMC Level 2 assessment she had completed in 2024 and the way that maturity reads to a buyer’s diligence team. She talked about the small TS/SCI bench on the civilian-cyber programs and the ways that subset of the workforce was harder to recruit and harder to retain in the post-2023 cleared talent market. She talked about the indirect risk in her contract base: about sixty-five percent of revenue concentrated in the top five contracts, the largest of which (a CIO-SP3 task order with HHS) ran about eighteen percent of revenue and was up for recompete in eighteen months. We asked about the business in the way you would ask if you were trying to understand it, not in the way you would ask if you were trying to win the engagement. What we were listening for was not just the financials. We were listening for whether Anjali was actually ready to sell, what she was working toward, and whether her expectations on price were grounded in what the market would actually support.
At the end of that call, we set up a working session: an in-person conversation where one of our Managing Directors would walk Anjali through our valuation model and tell her honestly what her firm was likely to command. We did not promise her a written report. Written valuations involve substantially more work, and we charge for those when a seller actually needs one for estate planning, a partner buyout, a divorce, or another documentary purpose. The walkthrough was free because Anjali was clearly thinking seriously about selling, the way someone thinks about it before they actually do it. Whether that ends up being in a year, three years, or longer, we make the same call.
The valuation session was the following Tuesday at 7:30 a.m. at the Reston headquarters, before the first agency-site standup of the day.
Anjali was not ready to sell a federal contracting business yet. She went home and waited nine months.
The valuation session showed Anjali that her firm was worth meaningfully less than she had been hoping, for two reasons that surprised her. The first was the recompete-cycle timing. The largest contract in the firm’s portfolio (the eighteen-percent-of-revenue HHS task order) was up for recompete in eighteen months, and going to market with a major recompete in flight is one of the most penalizing situations in federal IT M&A. Buyers price the recompete-loss scenario aggressively into LOIs, and the discount is real. The second was the contract concentration. Sixty-five percent of revenue in the top five contracts, with a single contract at eighteen percent, looks structurally fragile to a buyer’s diligence team even when each individual contract is performing. Federal IT buyers underwriting at the high end of the multiple range pay premium for diversification, and the path Anjali had been quietly planning (winning two new full-and-open contracts in 2025 to push concentration below sixty percent) was the right path, but it had not landed yet.
We told Anjali honestly: she could go to market now and accept the discount, or she could spend six to twelve months running the HHS recompete to win (and stabilizing that contract for the buyer’s underwriting team), winning at least one of the two new full-and-open targets she had in pipeline (which would push top-five concentration below sixty percent), tightening the indirect-rate package and the DCAA accounting posture so the cost-reimbursable side of the portfolio would diligence cleanly, completing the CMMC Level 2 maturity at the next assessment so the cybersecurity posture would be locked at the time of LOI, and packaging the cleared-workforce data (clearance composition by level, average tenure, attrition by program, recruiting funnel for the TS/SCI bench) into the kind of personnel-data report a buyer’s diligence team can rely on. We said the second path would likely command a meaningfully better number from a wider range of buyers, especially the privately-held federal IT primes and the patient-capital strategics that pay premiums for stable, diversified, CMMC-mature federal IT firms with deep cleared bench.
This is the part most brokers skip. Most brokers would have signed Anjali that day, taken the firm to market with the recompete in flight, and made the commission whether or not the deal was the best one for her. We told her to wait, even though it meant we did not get paid for nine months and might never get paid at all if she changed her mind.
Anjali went home and waited. She spent the next nine months winning the HHS recompete in a single-award (a clean win without a protest, a real value-driver for her LOI conversations later), winning one of the two full-and-open targets in pipeline (a Treasury cybersecurity task order that pushed top-five concentration to fifty-eight percent), completing the CMMC Level 2 maturity reassessment, finalizing the indirect-rate restructuring with her DCAA-cognizant audit team, and packaging the cleared-workforce-and-clearance-composition data into a thirty-page report with attrition trends, recruiting-funnel metrics, and clearance-by-program breakdowns. She read up on what active acquirers were paying for federal IT firms through resources at the General Services Administration on contract vehicle activity and tracked deal news in the federal IT M&A press. Anjali called us back in late 2025 and said she was ready to sell a federal contracting business that was finally in the shape it needed to be in.
What we did when Anjali came back.
What it takes to sell a federal contracting business properly
When an owner is ready to sell a federal contracting business with CGK, the discipline of the process surprises them. We took Anjali’s firm to market in just under five weeks once she got us her updated financials, the recompete-win documentation on the HHS task order, the new Treasury full-and-open task order award, the indirect-rate-restructuring package validated by her DCAA cognizant audit team, the CMMC Level 2 reassessment certificate, the cleared-workforce-and-clearance-composition report with attrition and recruiting metrics, the vehicle-portfolio summary with recompete cadence and award-history per vehicle, the customer-concentration roll-forward to fifty-eight percent in top five, and the FAR/DFARS contract-compliance posture summary. The blind teaser went out to 62 buyers we had pre-qualified across six buyer types: PE-backed federal IT consolidator platforms (the active mid-market consolidators in the $200M-$1B revenue band building toward Alliant prime status, plus the larger $1B-plus PE platforms with civilian-cyber theses), privately-held federal IT primes looking to add civilian-agency cybersecurity bench to existing defense IT footprints, 8(a) graduate strategic acquirers building federal services holding companies on multi-decade horizons, search funders and individual operators with cleared backgrounds and SBA-leveraged capital, family offices and patient-capital strategics building federal services portfolios on long-hold time horizons, and a small set of international acquirers (with the CFIUS review path our deal team had pre-cleared as feasible for federal IT services at this clearance posture).
Thirty-eight of those buyers signed NDAs and received the full Confidential Information Memorandum. Twenty-four entered our structured data room. Fourteen submitted Indications of Interest. Eight advanced to Letters of Intent. We narrowed to five for management presentations. Three re-submitted refined LOIs after the management meetings.
Anjali decided between two of the top LOIs. They were materially different. One was a higher headline price from a PE-backed federal IT consolidator platform that wanted to absorb Anjali’s firm into a regional East Coast civilian-cyber portfolio, with a conventional escrow structure, an earnout tied to recompete win-rate over three years (a structure Anjali found particularly uncomfortable because recompete outcomes are not fully within the seller’s control once the integration begins), an indirect-rate-harmonization mandate that would push Anjali’s rate structure toward the platform’s existing wraps (which would be dilutive to her contract margins for the first eighteen months), and a fund hold horizon of four to six years before the platform itself would likely be sold to a strategic. The other was a slightly lower headline price from a $1.4 billion-revenue privately-held federal IT prime with a strong defense IT footprint who was looking to add civilian-agency cybersecurity bench; they were not PE-backed, had no fund timer, had permanent capital, and were planning to operate Anjali’s firm as a discrete civilian-cyber business unit under the combined platform with the existing leadership and contract relationships intact. We walked Anjali through what each LOI would actually deliver under realistic and pessimistic scenarios, including what the cultural continuity would look like for her seventy-three cleared employees under each owner, what the indirect-rate question meant for actual contract margins post-integration, what the recompete-cycle question meant for the earnout under the PE structure, and what the cross-portfolio synergy would look like under the strategic structure (the strategic had three civilian-cyber adjacent contract vehicles where Anjali’s bench would slot in cleanly). The privately-held strategic deal was the better one for Anjali. The cash position day one was meaningfully stronger when normalized for the absence of an earnout, the indirect-rate-harmonization concession was significantly more favorable than the PE platform’s, the cultural fit with a permanent-capital strategic that valued long-hold operating performance over fund-cycle exits mattered to Anjali deeply, and the strategic’s existing civilian-cyber adjacent vehicles offered real growth pathways for her cleared workforce. She took it.
Through the whole process, the same CGK Managing Director who had taken Anjali’s first call nine months earlier was the person walking her through every conversation.
What the deal actually looked like.
How the deal looks when you sell a federal contracting business with CGK
Anjali’s deal closed roughly eight months after we restarted the engagement, with the federal contract novation work and Contracting Officer consent process running in parallel for the final ninety days. The buyer was a $1.4 billion-revenue privately-held federal IT prime with a defense-IT-heavy contract portfolio looking to add civilian-agency cybersecurity bench, funded with permanent capital and a senior secured credit facility from a federal-services-experienced lender. The strategic was not PE-backed and had no fund-timer pressure to flip the business inside a defined hold period. They acquired the firm as a stock purchase, with the firm operating as a discrete civilian-cybersecurity business unit under the combined platform, retaining its CIO-SP3 prime and its GSA MAS prime contract vehicles, and rolling its CIO-SP4 unrestricted-track recompete bid into the platform’s broader unrestricted-track strategy.
The headline price was meaningful but not the highest LOI she received. About 82 percent of it came as cash at closing, funded by the strategic’s permanent capital plus the senior credit facility. About 6 percent was held back in escrow for 24 months (the longer-than-typical 24-month duration reflected the federal-contract-novation and Contracting Officer consent window across the full vehicle portfolio, which was the trade-off we negotiated for the favorable cash-at-close percentage) to cover indemnification claims, a working capital adjustment, and small carve-outs for any DCAA cost-disallowance or vehicle-novation issues that could surface during the transition window. About 12 percent was a rollover equity stake into the strategic’s combined platform, which gave Anjali continued upside on the broader civilian-cyber expansion thesis if the strategic executed on its plan to roll up additional civilian-cyber bench across the next two years, and gave the buyer reassurance that Anjali would stay engaged through the integration and through the CIO-SP4 recompete bid. Wire hit on a Friday morning in March.
Anjali stayed on as a paid President of the Civilian Cybersecurity Business Unit for the strategic’s combined platform for sixteen months after closing, which let her personally introduce her direct reports to the new ownership, walk through every contract relationship with the relevant Contracting Officers and program managers, lead the CIO-SP4 unrestricted-track recompete bid as the bid-and-proposal lead under the platform’s combined past-performance footprint (the bid was awarded to the platform six months post-close), and lead the integration of two follow-on civilian-cyber acquisitions the platform completed in the twelve months post-close. After sixteen months, Anjali stepped back to a quarterly strategic-advisor role that gave her room to be home for her son’s senior year of college, finally accepted a board seat on a federal-cybersecurity-adjacent nonprofit she had been declining for two years, and started taking the long weekends she had not taken since 2008.
What happened to Anjali’s people.
Anjali cared most about her seventy-three cleared employees, the small TS/SCI bench on the civilian-cyber programs (six engineers who had been with the firm for an average of seven years), the five direct reports running her business-development, contracts, finance, security, and HR functions, the bid-and-proposal team that had won the HHS recompete and the new Treasury task order in the prior nine months, and the agency client relationships at DHS, HHS, Treasury, and IRS that had been built across two and three contract cycles. The privately-held federal IT prime strategic was a permanent-capital operator who would actually run the civilian-cyber business unit with the existing leadership rather than parachute in a corporate consultant from a Big Four playbook. That made the people part substantially cleaner than it would have been under a PE-backed federal IT consolidator that would have absorbed Anjali’s bench into shared-services delivery functions and harmonized the indirect rates aggressively against contract margins.
The buyer kept all 92 employees, honored the existing pay structure across the cleared and non-cleared workforce, and committed to keeping the five direct reports in their roles with expanded scope under the strategic’s combined civilian-cyber organization. The TS/SCI bench was preserved with formal stay-bonus packages tied to clearance retention and performance over the first eighteen months post-close (a structure both sides understood was essential given the cleared talent market dynamics). The bid-and-proposal team became the nucleus of the strategic’s civilian-cyber bid-and-proposal organization, with the win team that had landed the HHS recompete leading the platform-wide CIO-SP4 unrestricted-track bid post-close. The agency client relationships were preserved by keeping Anjali in the civilian-cyber leadership role through the integration and through the CIO-SP4 award announcement, with formal client-introduction meetings to her successor running for six months after the wire hit.
Anjali’s son drove home from Virginia Tech for closing weekend with two roommates. Her daughter flew down from Carnegie Mellon for the closing dinner. Anjali and her husband took two weeks off in late March for the first time since 2008, used the time to fly to Mumbai to visit her parents (who had not seen the firm she had built without her in the room and in person), and started a quiet conversation about whether the work she wanted to do in the next decade would be inside the strategic, on the federal-cybersecurity-adjacent nonprofit board she had finally accepted, or somewhere new entirely.
What Anjali told us afterward.
Why owners who sell a federal contracting business with CGK keep coming back
About six months after closing, Anjali called the Managing Director who had run her deal. She said two things that the Managing Director still tells new sellers about.
The first was about the nine-month wait. She said: “Four of the buyers who had been calling me were ready to move in sixty days, and two different M&A advisors I talked to before you told me they could take me to market right then with the HHS recompete in flight. The reason I sold with you is that you told me the truth about what going to market with that recompete in flight would do to the buyer pool, not just to the price. You told me the truth about the customer-concentration story and what it would look like at fifty-eight percent versus sixty-five. You told me what the indirect-rate-restructuring would buy me in LOI conversations a year later, and you were right within half a turn of multiple. I would have left a real number on the table and ended up with the wrong buyer.”
The second was about who she sold to. She said: “I almost signed with the PE-backed platform because the headline price was bigger and the deal team had a slick presentation. The fact that you walked me through what each buyer would actually do with my five direct reports, my TS/SCI bench, and the indirect-rate structure I had spent four months getting through DCAA, what each buyer’s hold horizon would mean for the firm three and five years out, and how an integrated transaction with a permanent-capital strategic was structurally different from a fund-timer roll-up that wanted to harmonize my rates against their contract margins, is a conversation I never even thought to have until you raised it. I sold to a buyer who is going to grow this business with the team I built it with and treat my cleared workforce as a strategic asset, not a cost line item.”
This is what we mean when we say we sit with you in the decision, not just the transaction. Anjali is one composite story, but the pattern is real. The owners we work with who decide to sell a federal contracting business usually find their way to us through versions of Anjali’s situation, and the relationships start with a long listening session and a free walkthrough, not a pitch.
What is different when you sell a federal contracting business in defense engineering services.
Mark’s defense engineering services firm, the buyer pool, and the deal that closed
Anjali’s story is one of four pathways most owners walk through when they sell a federal contracting business with CGK. The other three are different in important ways. Here is the second pathway. Mark Kowalski was 56 and a former Navy LCDR who had founded a defense engineering services firm fourteen years ago after retiring from active duty. The firm did roughly $18 million in annual revenue and employed about seventy engineers and technical staff (mostly former military and civilian DOD professionals with active Secret and TS clearances), serving Naval Surface Warfare Center programs, Aberdeen Proving Ground test-and-evaluation work, and Air Force life-cycle support contracts at multiple installations. Mark held a SeaPort Next Generation prime contract, multiple OASIS Plus subs, several agency-specific BPAs, and a long-running prime contract with NSWC for systems-engineering support that had been recompeted twice without protest. The firm had been approached four times: twice by PE-backed defense IT consolidator platforms, once by a regional Mid-Atlantic defense services prime, and once by a private federal services holding company.
The buyer pool for defense engineering services firms is dominated by larger consolidator platforms with the past-performance scale and CMMC maturity to take on cleared defense work, plus a smaller set of private strategic acquirers with existing defense IT footprints. Active buyers tend to be: PE-backed defense IT consolidator platforms in the $300M-$1B revenue band, larger publicly-traded federal services primes with disciplined acquisition theses, privately-held federal IT primes building defense-adjacent capability, and a thinner band of search funds and private operators with cleared backgrounds. CGK ran a process for Mark that surfaced thirteen serious buyers and narrowed to four management-presentation finalists. The winning buyer was unconventional: a search fund led by a former Naval Academy classmate of Mark’s who had spent eighteen months hunting in defense-adjacent verticals before locking on Mark’s company. The search fund was capitalized by a syndicate of cleared-background limited partners (former DOD acquisition executives and former defense services CEOs) who wanted exposure to the defense engineering services sector at the lower-middle-market scale.
The deal structure looked different from Anjali’s. About 81 percent of the consideration came as cash at closing, funded by the search fund’s syndicate equity plus a senior debt facility from a federal-services-experienced lender. About 4 percent was held back in escrow for 15 months for indemnification, a working-capital adjustment, and small carve-outs for any DCAA cost-disallowance issues that could surface during the transition. About 15 percent was a rollover equity stake into the search fund’s operating company, which gave Mark continued upside on the search-funder’s growth thesis (the syndicate had committed follow-on capital for two more bolt-on acquisitions over the following three years). Mark stayed on as a paid Executive Chairman for fourteen months while his Naval Academy classmate stepped into the CEO role with Mark mentoring through the recompete cycle, then transitioned to a quarterly board-advisor role and started spending more time at the family lake house in Maryland’s Eastern Shore.
What is different when you sell a federal contracting business in professional services.
Hassan’s federal management consulting firm, the buyer pool, and the deal that closed
The third pathway most owners walk through when they sell a federal contracting business is the federal-focused professional services pathway. Hassan Rahman was 53 and had founded a federal management consulting firm twelve years ago focused on transformation programs at HHS, the VA, and USDA. The firm did roughly $9 million in annual revenue with about seventy consultants on staff (a mix of management consultants with prior Big Four experience, federal-program subject-matter experts, and former agency staff who had moved to industry). The firm held a GSA Schedule MAS prime contract under the relevant professional services SINs, multiple agency-specific BPAs, and a portfolio of CIO-SP3 task orders on civilian-agency program-management work. Hassan had been approached three times: twice by larger federal management consulting firms looking to add capability, and once by a private federal services holding company.
The buyer pool for federal-focused professional services firms is meaningfully different from the federal IT and defense engineering pools. PE rollups are less active in pure professional services at this scale because the unit economics depend more on consultant utilization and bill rates than on contract vehicles and cleared bench. The active buyers tend to be: larger federal management consulting firms (Booz, Deloitte Federal, Guidehouse-tier and the next tier down) looking to add agency-specific capability, private federal services holding companies, search funders and individual operators with prior federal-consulting careers, and an emerging buyer category we are seeing more of: long-tenured employees with personal capital who buy out their employer through a leveraged transaction. CGK ran a process for Hassan that surfaced ten serious buyers and narrowed to three management-presentation finalists. The winning buyer was unusual: Hassan’s longest-tenured engagement manager (a ten-year veteran of the firm who had recently inherited substantial family capital) who proposed a leveraged buyout structure with herself as the new CEO. After working through the structure, Hassan and CGK concluded the inside-buyer deal would actually deliver better outcomes for the firm, the consultants, and the agency client relationships than any of the strategic alternatives.
The deal structure reflected the inside-buyer dynamic. About 88 percent of the consideration came as cash at closing, funded by the buyer’s personal capital plus a senior credit facility secured against the firm’s contract portfolio. About 4 percent was held back in escrow for 12 months for indemnification and a working-capital adjustment. The remaining 8 percent took the form of a five-year subordinated seller note at a market interest rate, secured against a junior lien on the firm’s contract receivables. Hassan stayed on as Executive Chairman through the first twelve months while the new CEO took over operations and the agency-client transition was managed, then transitioned to a quarterly strategic-advisor role and used the next year to start a small advisory practice helping other federal consulting founders think through succession decisions.
What is different when you sell a federal contracting business in federal construction.
Tom’s federal construction firm, the buyer pool, and the deal that closed
The fourth pathway most owners walk through when they sell a federal contracting business is the federal construction pathway. Tom Whitehorse was 58 and had founded a federal construction firm in Albuquerque twenty-three years ago, growing it from a single-truck remodel operation into a $14 million regional federal construction firm serving USACE Albuquerque District projects, Bureau of Indian Affairs Western Region maintenance and renewal contracts, and military base maintenance work at Kirtland and Holloman Air Force Bases. Tom is Diné and had built the firm partly through the SBA 8(a) Business Development Program (the federal small-business program for socially and economically disadvantaged firms, including Native American-owned businesses), graduating from the program in 2024 after a full nine-year participation cycle. The firm employed about ninety people with a heavy field-craft workforce (carpenters, electricians, plumbers, equipment operators) plus an estimating, scheduling, and project-management office. Tom had been approached three times: once by a large publicly-traded federal construction holding company, once by a regional Southwest commercial GC looking to vertically integrate into federal work, and once by a national federal facility-maintenance operator looking to acquire regional capacity.
The buyer pool for federal construction firms is structurally different from any of the federal services pools. PE rollups are less common because federal construction’s bonding requirements, project-based revenue recognition, and labor-intensive economics do not fit standard PE underwriting models cleanly. The active buyers tend to be: large regional commercial general contractors looking to vertically integrate into federal work, larger publicly-traded federal construction holding companies, national federal facility-maintenance operators, and select 8(a) graduate strategic acquirers building federal construction portfolios. CGK ran a process for Tom that surfaced nine serious buyers and narrowed to three management-presentation finalists. The winning buyer was a $200 million-revenue regional Southwest commercial GC that had been looking for two years to add a federal-civilian portfolio to their existing private-commercial book of business. They valued Tom’s USACE Albuquerque relationships, his BIA Western Region past performance, and his Diné-led 8(a) graduate status (which signaled to other federal customers that the combined firm would be a credible federal contractor going forward, even though Tom’s firm itself had graduated and would compete on full-and-open basis).
The deal structure reflected federal construction’s bonding-capacity requirements. About 86 percent of the consideration came as cash at closing, funded by the GC’s senior credit facility plus committed equity. About 7 percent was held back in escrow for the standard 18-month indemnification and working-capital adjustment window. About 7 percent was a rollover equity stake into the combined firm’s federal-civilian operating subsidiary. The deal also included a separate 36-month bonding-and-surety carve-out (a structural element unique to federal construction M&A): a portion of the rollover and escrow was tied to maintaining continued bonding capacity at Tom’s pre-close levels through the transition, because losing bonding capacity post-close would have collapsed the federal construction franchise the buyer was paying for. Tom stayed on as a paid President of the federal-civilian division for twenty-four months, leading the integration of his USACE and BIA relationships into the combined firm’s federal-services organization, then transitioned to a quarterly board-advisor role to spend more time with his grandkids in Albuquerque and to start a small advisory practice helping younger Diné and Native American business owners think through 8(a) graduation and succession decisions.
Ready to sell a federal contracting business? Where are you in Anjali’s story?
If you are starting to think about how to sell a federal contracting business, whether that is a federal IT services firm like Anjali’s, a defense engineering services firm like Mark’s, a federal-focused professional services firm like Hassan’s, or a federal construction firm like Tom’s, we should talk. There is no commitment and no pressure. The first conversation is free. The valuation walkthrough that follows is free when you are seriously thinking about selling, whether that is in a year, five years, or longer. We only charge for formal written valuations, and only when you actually need one for estate planning, a partner buyout, or another documentary purpose. Submit the form and a senior CGK Managing Director will reach out within one business day.
If you are Anjali at month 1: just exploring
You are not sure if you want to sell yet. The recompete cycle keeps shifting, your contract concentration is heavier than you would like, your cleared workforce is harder to recruit and harder to retain than it used to be, your kids are heading into expensive college years, your spouse is hinting at slowing down, you are curious about what your firm and your contract vehicle portfolio might be worth, or maybe a PE-backed federal IT consolidator or a privately-held strategic has been calling you. Most of our best engagements start here. Submit the form and we will schedule a working session. You walk away with a real number and a clear sense of what to do next, with no obligation to do anything.
If you are Anjali at month 9: ready to go
You have done the work to clean up the business. Your financials and your indirect rates are tight. Your customer concentration is below sixty percent in top five. Your cleared-workforce data is packaged. Your CMMC maturity is at Level 2 and reassessed. Your DCAA accounting posture is clean. Your major recompetes are won and the next bracket is in pipeline rather than in flight. Maybe a buyer is already in the conversation. You want to run a real process. Submit the form and we will be in touch within a business day to talk about timing, scope, and what your first 30 days as a CGK seller would look like.
If you are not sure where you are
Most owners are not sure. Submit the form and start with the conversation. We will figure out together where you are. We are equally happy to tell you to wait twelve months as we are to take you to market in three weeks.
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A senior CGK Managing Director will respond within one business day. Strictly confidential. For owners of federal contracting businesses doing $1.5M+ in annual revenue, including federal IT services firms, defense engineering and DOD services firms, federal-focused professional services firms, and federal construction firms. The first conversation and the valuation walkthrough that follows are free for any seller seriously thinking about selling, on any horizon.
Confidential. No obligation. Direct routing to a named CGK business broker, not a junior screener.
One of these eight people would lead your engagement.
When you decide to sell a federal contracting business with CGK, one named senior Managing Director stays with you from the first call through the wire transfer, just like Anjali’s Managing Director stayed with her for nine months and then for the engagement that followed. Our Managing Directors come from Wall Street investment banks, hedge funds, Fortune 500 corporate finance, and operating-business leadership. Cornell MBA. U Chicago Booth MBA. CFA. CMT. Naval Academy. Goldman Sachs. Merrill Lynch. Deutsche Bank. AIG. T. Rowe Price.
What sellers say after they sell a federal contracting business (and other businesses) with CGK
I could not be happier with the experience I had selling my business with CGK. Greg did a detailed analysis of my business and helped me price and position it right for the market. After receiving multiple offers at full asking price, the rest of the process went very smoothly, and we closed in less than two months.
Hanna M.Selling my business was a once-in-a-lifetime experience, and I’m incredibly grateful to have had Wes by my side throughout the process. He brought perspective, pushed when necessary, and always had my best interests in mind. His experience and strategic approach allowed me to maximize the sale price while minimizing long-term risk and obligations. If I had to do it all over again, I wouldn’t hesitate to choose him as my broker.
Adam NevilleDerik located multiple interested strategic buyers that produced more than one serious offer. The negotiations were tough but Greg and Derik’s experience helped us overcome. We got a great result for our employees and for the owners. We would recommend them without reservation.
Bob TaylorWe sold a business that was 47 years old and being run by second generation within a year of working with Wes. CGK has a system that attracts serious prospects to review opportunities. Wes was able to make the overwhelming feeling of selling easy and to a certain extent enjoyable. I never felt alone or in the dark throughout the entire process.
Jennifer WilliamsWe decided to sell our company in 2025. Talked to another M&A company in the Houston area. We felt very comfortable with Greg and Matthew at CGK. Could not have made a better choice. From day 1 till final closing and even after 30+ days, they have been here helping us with documents and support during the transition. Thanks can not be said enough.
Rickey ThomasInside the Blueprint, on Bloomberg TV and Fox Business News.
Anjali’s son, the mechanical engineering junior at Virginia Tech, is the one who first sent her a clip of CGK on Bloomberg. He had been watching the segment between exam-week study sessions and recognized the firm name from a federal-IT-industry trade article about how to sell a federal contracting business he had forwarded to his mom three months earlier. He sent her the link with a note that read “Mom, this is the firm.” CGK Business Sales is featured on Inside the Blueprint, the syndicated business television series. Our episode aired on Bloomberg TV and Fox Business News. Watch the segment, then start a confidential conversation.
The CGK office Anjali called was in her local National Capital Region market. Yours might be one of these.
When you sell a federal contracting business with CGK, whichever office you reach, you get the entire firm. Anjali worked with a CGK Managing Director based out of the firm’s Washington-Baltimore corridor, but her deal benefited from a buyer pool we sourced firm-wide, including the privately-held federal IT prime strategic acquirer that ultimately won the deal. Click any city to learn about our local presence and the named Managing Director leading that market.
Other Questions Anjali and Other Federal Contracting Sellers Ask Us
Practical answers to what comes up before, during, and after the kind of engagement Anjali, Mark, Hassan, and Tom went through, when you sell a federal contracting business with CGK.