The Impact of the US Government as a Customer on Financial Performance
Research topic: The US government is the single largest purchaser of goods and services in the world, issuing millions of contracts every year worth over $500 billion dollars. However, the nature of the US Government as a customer segment is unique and under studied by business academics. This makes it difficult to generalize the Government’s impact on firm performance from traditional business settings. Procuring government contracts has many challenges, such as stringent oversight, budgetary fluctuations, tighter margins, certification requirements, and obscure policies. These factors pose challenges for those firms who draw a sizable portion of their customer portfolio from government accounts. Our research focuses on how firms can best identify and address the challenges of dealing with the US government as a customer.
Benefits: This research will determine under what circumstances and for what types of firms the government is a profitable customer segment to serve. The research aims to provide an objective estimate of the financial impact of government contracts, including both short-term and long-term cash flow estimates. In addition, the research will investigate what role government contracts have in a firm’s customer portfolio and how they can produce the best financial return, both in terms of generating significant, as well as consistent, cash flows. The research will also identify firm strategies with the highest probability of success for profiting from government transactions.