Mergers and acquisitions (M&A) have become increasingly common growth strategies within the government contracting (GovCon) industry. This surge is fueled by private equity activity, the drive for greater scale, the desire for market diversification, and the pursuit of specialized capabilities. As a result, consolidation across the GovCon market is accelerating.

The challenge is not limited to closing the deal, but what comes next. Many acquisitions fail to deliver anticipated value, and in GovCon the risks are even greater. Compliance and people are central to success, and misaligned systems, loss of key talent, or compliance gaps can turn a promising transaction into a costly setback. 

Systems integration: The first test 

When two GovCons merge, their back-office systems rarely align. Finance, human resources, project management, and customer relationship management (CRM) often operate independently, creating new challenges for leaders. 

These challenges can include conflicting data that clouds decision-making, delayed billing that disrupts cash flow, misaligned capture plans that impact win probabilities, and inconsistent compliance processes that increase audit risk. These issues are not simply IT concerns. They are strategic barriers. Without a unified source of critical business information, leaders lack the visibility to guide the organization with confidence. 

Successful acquirers prioritize systems integration from Day 1. By consolidating project, financial, and compliance data, executives can make proactive decisions instead of reacting to fragmented spreadsheets. 

Talent retention: The real asset 

In GovCon, people are the foundation of contract delivery. Yet M&A often creates uncertainty for employees who wonder about role changes, cultural shifts, and career prospects. If these questions go unanswered, key talent may leave—and customers will notice. Continuity matters, and the loss of trusted employees can jeopardize delivery and future opportunities. 

Strong acquirers treat cultural integration with the same importance as financial integration. They communicate openly, identify mission-critical staff, and invest in tools that make work easier. Retaining talent is not a “soft” issue. It determines whether value is created or lost during integration. 

Compliance and risk: The unforgiving reality 

Compliance is non-negotiable in GovCon. M&A can expose risks such as non-compliant timekeeping or billing, weak procurement documentation that threatens a Contractor Purchasing System Review (CPSR), complex indirect rate structures, or cybersecurity gaps that compromise Cybersecurity Maturity Model Certification (CMMC) requirements. 

These problems do not fade after the deal closes. In many cases, they intensify. A contract vehicle acquired in good faith can quickly become a liability if inherited systems cannot support compliance. For this reason, aligning compliance processes must remain a top priority throughout integration. 

Technology as the backbone 

System integration, talent retention, and compliance all improve with the right technology. A modern enterprise resource planning (ERP) and CRM platform helps GovCons consolidate data, standardize compliance, manage cash flow and pipeline in real time, and equip employees with reliable, intuitive tools. 

At Unanet, we see the benefits of technology-driven integration every day. It accelerates the process and helps GovCons achieve the synergies that will justify the acquisition. 

Moving beyond the deal toward future success 

M&A activity in GovCon will continue as organizations pursue scale and specialized capabilities. Yet success is not measured at the negotiating table, but in integration. 

Executives who succeed in this environment prioritize systems, value employees, and build compliance into the foundation of growth. For GovCon leaders, the message is clear: plan for integration from Day 1, invest in the right systems, and lead with transparency. That is how an acquisition creates enduring value. 

Interested in learning more about how to optimize your systems, retain more talent, and maintain compliance? Connect with a Unanet expert today.