The Future Is Now: Here Are Some Government Contracts Predictions For the Next Year

“Those who have knowledge don't predict. Those who predict don't have knowledge." 

– Lao Tzu 

Here are 10 government contract loosely-related mostly financial predictions for the coming year:

1.      We are going to have an increase in interest rates and inflation, and that is going to put government contractors working on fixed priced contracts under some financial distress.

2.      Service contractors are going to see larger demands for wage increases come the end of next year. Meanwhile, the Service Contract Act mid-year wage and thus price adjustments will prove inadequate.

3.      Corruption in government contracts will also increase as the civil service oversight has been eroded and the Inspector General offices have been impaired.

4.      And given the damage done to the Department of Labor staffing, there will be less enforcement activity to protect workers and more wage cheating by employers.

5.      There will be less work for private government contract lawyers as clients pull in their horns and try to survive.

6.      Despite the inflationary trends, fringe benefit increases will moderate as millions of people get pushed out of the health insurance universe and demand for medical services decline.

7.      Defense contractors with cost reimbursement contracts and pricing power will continue to see heavy demand for equipment and services and will prosper.

8.      The government will increasingly become an equity participant in material extraction and manufacturing industries deemed to be critical to national defense.

9.      The stock market is going to get sapped and there will be a 35% pullback, but publicly traded government contractor concerns will experience smaller stock price declines.

10. Something will happen to surprise us, as is always the case, since the future is largely unknowable.

Best wishes for the new year.