Survey: Revenue Rose in 2006 More than half of government contractors report that their 2006 revenues increased over the prior year, according to the annual Grant Thornton Government Contracting Survey. Less than a quarter said they suffered a reduction in revenue. The survey drew responses from more than 100 companies, most with revenues of less than $50 million. Grant Thornton said 53% reported higher revenues during the year, while 22% were lower. Other findings of the survey: •Pre-tax income: Companies were profitable in all revenue ranges although pre-tax income was lower than in last year’s survey. ••Management and support headcount: Headcount of management and support activities was 13.8% of total headcount compared to 16.2% in last year’s survey. ••Indirect cost rates: Overhead rates continued a downward trend while rates for fringe benefits and G&A held steady. ••Uncompensated overtime: 37% of survey companies do not account for all hours worked, and as a result, are at risk for losing revenue and profits on time and material contracts. ••Revenue by contract type: Revenue from government cost reimbursable and time and material contracts increased sharply since last year’s survey. ••Identifying out-of-scope work: 65% of survey participants reported that their procedures for identifying out-of scope work are either not effective or only somewhat effective. ••Executive compensation: Executive compensation remains the most frequent cost challenged by government auditors. ••Exit strategy: Sale of the company continues to be the most favored exit strategy. The interest in pursuing initial public offerings of company stock is lower than in last year’s survey.