WASHINGTON ― An official from the U.S. Defense Department told reporters Monday the department will be reviewing General Dynamic’s proposed acquisition of CSRA due to concerns over competition in the federal IT market.
“Any defense-related mergers and acquisition would be examined by the Department of Defense,” said Jerry McGinn, the principal deputy director of DoD’s office of manufacturing and industrial base policy. “I don’t know if they’ve filed yet ... but I can say that is one of the cases — we are going to review that case, for competition [concerns].”
The $9.6 billion merger would make GDIT-CSRA among the largest players in the federal IT industry, along with market giant Leidos. Part of GDIT’s rationale for acquiring CSRA was its belief the federal IT market is a consolidating market, and in order to effectively compete for larger contracts it needed to expand.
In that sense, the biggest influence on General Dynamics portfolio will be among civilian agencies, particularly State and Justice departments and the Homeland Security Department, according to data company Govini. That said, CSRA will expand the past performance of General Dynamics’ technology services within the DoD by 93.3 percent, according to the Govini report.
In a conference call announcing the acquisition, General Dynamic’s CEO and Chairman Phebe Novakovic said, “In a consolidating market it makes an awful lot of sense to combine to better address the larger packaging opportunities from a contracting point of view ... Stasis is death.”