After a dozen years of robust demand for their skills, companies providing technical services to the military are facing shrinking markets. One reason is the winding down of overseas wars, and another is deficit-reduction measures. Production of military hardware is expected to generate stronger returns than services, so some of the defense industry’s biggest weapons makers are pulling back from services not related to their core lines and growth markets like cybersecurity. For service providers that don’t make military hardware, though, this is a challenging time. SAIC is breaking up, Engility is cutting costs, and ManTech is positioning for acquisitions. I have written a commentary on the defense-services business for Forbes here.
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