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Covington’s Government Contracts practice is one of the largest in the country and features a team of lawyers who focus on the special considerations impacting mergers, acquisitions, spin-offs, joint venture formations, and other corporate transactions in the highly regulated government contracts industry. Our team has particular expertise in deals involving private equity. In the past five years, we have handled over 200 government contracts M&A transactions, with a total value of over $35 billion.

With years of experience handling the regulatory aspects of M&A and other corporate transactions involving companies that sell products or services to government customers, we bring to bear both the underlying regulatory expertise and the practical know-how for how similarly situated deals are playing out in the market.

Our government contracts lawyers have a wealth of experience conducting classified and unclassified due diligence, advising on regulatory consents and other approvals, negotiating regulatory aspects of transaction documents, and securing novation approval. We routinely work in collaboration with corporate lawyers from Covington and other firms to identify and manage regulatory risk and to help facilitate a smooth transaction.

Who We Help

Our clients include major defense contractors, small to midsize businesses, private equity firms and private equity-backed companies, and other financial investors. Our work covers a wide range of industries, from aerospace, defense, and national security to technology, telecommunications, energy, life sciences, and industrials.

Government Contracts Expertise

Corporate transactions involving a company operating in this sector—which faces significant government scrutiny—introduce specialized regulatory considerations that can have significant impacts on transactions. They can affect valuation, transaction structure, and deal execution, raising a number of questions that often include:

  • Does the transaction require government consents or other approvals, such as contract novation or CFIUS review?
  • Will the transaction require FOCI mitigation?
  • What rights does the government have in the target’s intellectual property?    
  • How should government contracts with specialized termination provisions be valued?
  • Is there a potential for significant audit liability that predates an acquisition?

Transactional and Private Equity Experience

We have a team of lawyers who are not only focused on government contracts but also on government contracts M&A and other transactions.

Having represented clients across hundreds of transactions in the industry, our team understands how to translate regulatory considerations into actionable deal negotiation points, and we often have perspective on how comparable transactions in the market have been successfully brought to closing. We are routinely called upon to work alongside corporate lawyers from other firms that do not have government contracts expertise.

Collaborative Covington Team

Many corporate transactions involving government contractors implicate a wide range of regulatory risks, including those relating to CFIUS, security clearances, data privacy and cybersecurity, anti-corruption, trade controls and customs, and labor and employment. We regularly work with colleagues across our leading regulatory practices as well as our corporate practice to put together a robust and efficient diligence team that is scaled to address the needs of the specific transaction.