AECOM spin-off marks latest new player in growing govt services market

摘要

The separation of AECOM's government services business is just the latest example of services contractors reshaping to take advantage of an improving market, experts say.The company announced last week it would separate its management services segment into a standalone services contractor. The segment has more than 25,000 employees and generated sales of $3.7 billion in fiscal year 2018.Andrew Hunter of the Center for Strategic and International Studies told Inside Defense services work is "likely to be, long-term, a growing market.""So it is an area where companies are positioning themselves" to capture additional growth, he added.At the same time, other engineering firms are making acquisitions to bolster their roles in government services. Jacobs, for instance, in April announced it would acquire Key W, while Parsons has acquired both Polaris Alpha and OGSystems.In April, Terry Hagen, who heads the Jacobs unit that will add Key W, said the purchase would help Jacobs move into parts of the government services sector "tied to national priorities."Byron Callan of Capital Alpha Partners told Inside Defense the pool of sizeable services contractors is broadening."The market kind of viewed this sector as, oh, it was pretty much Booz Allen [Hamilton], CACI [International], Leidos and [Science Applications International Corp.], and you now have this new group of players who have scale and heft," he said. "You have to watch them because they're going to be big factors in the market."At the same time, commercial technology companies, from Amazon Web Services to Google, are playing a larger role in the market, Hunter noted.