Early in the spring of 2023, a specter loomed over the contracting world: the threat of a government debt ceiling. Many felt the tremors, anticipating pay holdups and potential defaults—even those firms well-ensconced in their contracts.
And no one was blindsided when skittish investors began distancing themselves from government-contract stocks, even before a formal debt ceiling proclamation looked like it would happen. Especially vulnerable? Firms boasting $200 million in yearly contract revenues or those dedicating at least 5% of their operations to government proposals. There's a tangible cost to market faithfulness.
For now, the sky's the limit, with the ceiling safely elevated. Yet, we'd be naive to believe the latest ceiling scare is the last of its kind. What awaits contractors if — or when — another ceiling casts its shadow? Read on, and let's navigate the situation together.
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