Government & Public Services
Federal, state, and local government contractors and service providers delivering IT, facilities, defense support, and public sector services.
- 7
- Segments
- 28
- Verticals
Overview
Government & Public Services covers the public sector — federal, state, and local government and the services they deliver — together with the large private market of contractors and technology providers that serve them. Combined government spending exceeds $10 trillion annually, but government itself is public, not a private industry; the investable opportunity is government contracting and government technology ("govtech").
The private market spans defense and IT services primes (Leidos, Booz Allen, SAIC, GDIT, CACI), government software and public-safety technology (Tyler Technologies, Axon, Motorola Solutions), and outsourced public services. Demand is steady, non-cyclical, and budget-backed, driven by digital transformation, modernization of legacy systems, and the outsourcing of public functions, with active M&A across both government contracting (govcon) and govtech.
Market snapshot
Government is public-sector and not covered by the Economic Census (which measures private business); the private government-contracting and govtech market spans many professional-services and software classifications and is not separately sized here. Combined U.S. government spending exceeds $10T annually.
Business model & economics
- Revenue model
- Government contracts, services, and software/SaaS
- Recurring revenue
- High — multi-year contracts and recurring SaaS
- EBITDA margin
- Contract- and software-mix-dependent
- Capex intensity
- Low
- Public sector itself is not a private industry.
- Investable opportunity is govcon and govtech.
- Steady, non-cyclical, budget-backed demand.
M&A deal context
Who’s acquiring
What’s driving deals
- Digital transformation and legacy modernization.
- Outsourcing of public functions.
- Govcon and govtech consolidation.
Segment classifications
- 6.3.1Defense & Military Support Services4 verticals
- 6.3.2Federal Government Services4 verticals
- 6.3.3Government IT & Digital Services4 verticals
- 6.3.4Municipal & Local Government Services4 verticals
- 6.3.5Public Health & Human Services4 verticals
- 6.3.6Public Safety Technology & Systems4 verticals
- 6.3.7State & Regional Government Services4 verticals
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