TerraGo, a company with fewer than 100 employees worldwide, recently announced that it will relocate its headquarters to the D.C. area from Atlanta. TerraGo provides location intelligence and geospatial information for defense and intelligence agencies and other government agencies.
Why would a company want to do that? What perceived advantage does that give a defense contractor?
Evidently, companies that do business with the Defense Department and the intelligence agencies think a local ZIP code will appeal to their customers. But does this actually make any difference at all?
As recently reported by Jill Aitoro in the Washington Business Journal, TerraGo will have fewer than 20 employees in its new headquarters office in Arlington, Va. The idea is evidently that declaring their D.C.-area office to be their headquarters makes them seem more like inside-the-Beltway players and might land them more government contracts or at least more cooperation with federal agencies.
Of course, contractors tend to maintain most of their employees outside the D.C. area, at whatever location they are needed in order to accomplish the task at hand.
In its announcement of the headquarters move, TerraGo said it was taking the step in order to “improve collaboration and optimize support for the company’s strategically important defense and intelligence customer base.”
There don’t appear to be any studies or any reliable information indicating that over the years, companies headquartered in the D.C. area are more successful in landing government contracts than other companies may be. But it may give the company’s leaders more peace of mind, or in the case of publicly traded companies, it may have some appeal to investors.
Regardless of company location, this is a difficult environment for many government contractors because of the continuing and uncertain effects of sequestration. In an environment where there are fewer dollars to go around, it makes sense for a company to seek appropriate and experienced legal counsel to ensure that it satisfies all the requirements of the contracting agency.