Clear Skies, Calm Winds: The Often Overlooked Edge to A&D Contract Wins
What’s the most critical factor in maximizing your probability of a win?
Whether you’re an innovative defense startup (welcome—the industry needs you) or a long-time A&D contractor (thank you for your service), winning contracts boils down to one thing:
Capital. Specifically, how you manage your capital.
Now, normally this is where we’d reiterate the “many challenges” of A&D. Labyrinthine accounting standards (ASC 606, anyone?) submerged in an alphabet soup of government regulations (ITAR, EAR, FAR, DFARS, etc.)
But there are plenty of resources available for that. (And, not to be harsh, but any finance team worth their salt should handle it for you.)
Instead, I want to share something I rarely see discussed: Why your financial operations may just be the silver bullet to help you secure your next contract.
Pre-Flight Check: Clearing the Runway of Common Contract Killers
Much like flying an aircraft, navigating the challenges of A&D demands more than a long runway. It requires avoiding “contract-killing” mistakes that might disqualify or discredit you.
In a financial context, these mistakes include:
- Underestimating cash flow – Front-loading expenses to “secure the win” could kneecap your ability to fully deliver on the contract when it gets awarded. And since that process can take years, you need a solid cash flow strategy to keep yourself afloat in the meantime.
- Bidding from bad data – The only thing worse than bidding blindly? Thinking you have a solid proposal, only to realize you overshot by a mile. Or worse, underballed the competition and got stuck with razor-thin margins. Finding that ideal inflection point is possible—if you’re willing to dig into the financial data.
- Lack of long-term capital strategy – Even the best pilots can get their head caught up in the clouds and lose track of the bigger mission. Moving from contract to contract is important, but so is commercializing your competitive edge by capitalizing on growth opportunities.
Surveys show many A&D companies take a forward-looking stance on external trends, such as the impact of AI and supply chain visibility. Yet it’s these crucial internal trends that make or break long-term viability.
And the recurring theme in these trends? You guessed it—financial clarity.
Gaining Altitude: 3 Areas Your Financial Operations Act as a Growth Engine
Contrary to popular belief, your finance team isn’t just to ensure documentation, audit trails, and internal controls for compliance (although these are all very important).
With the right frameworks, a strategic finance function can fuel your next stage of growth in three key areas.
#1. Capital Planning for Economic Turbulence
Even in the best ‘flight conditions,’ A&D firms face lumpy cash flows, extensive sales cycles, and shifting government priorities.
Proactive capital planning acts as a flight stabilizer, empowering:
- Strategic scenario planning that models multiple “what if?” pathways. These act as a financial stress-test—before contract delays, supplier breakdowns, or interest rate changes hit.
- Burn rate and runway modeling that offers much-needed insights into where you’re at on the (financial) runway. Forward-looking CFOs go even further, helping you identify how to extend that runway (without cutting down on headcount).
- Investor diligence support, including cash flow forecasting and working capital visibility. By pinging your exact location in the sea of complex data, you reduce friction and improve investor confidence moving forward.
#2. ERP Implementations: Instrumentation Tailored to A&D
No pilot dreams of navigating without well-tuned instrumentation. And… let’s face it, the financial tech stack for A&D is dated.
The right solutions should:
- Align with the specific needs of your niche
- Natively support compliance and cost structures
- Track contract margins and allocate indirect costs (sans the spreadsheets)
Again, a fractional CFO can shepherd this change. With deep strategic insights relevant to A&D verticals, they engineer the financial frameworks needed to transform your ERP into the navigational system it was meant to be.
#3. Private Equity Prep for a Smooth Landing
No matter how skilled the pilot, touchdown always demands utmost attention.
If your growth trajectory involves private equity investments or a potential exit, you need more than GAAP-aligned books. You need a strong narrative.
Financial planning and analysis (FP&A) builds that investment case for you with:
- Credible, investor-ready models that prove your scalability
- Audit-ready financials verified by industry specialists
- Due diligence accelerators—documentation on drivers, margins, and risk exposures
The M&A landscape in 2025 favors “precision plays” rather than mass acquisitions, according to A&D deals leader Akhil Bhushan. So if you’re seeking acquisition or investment, ensure you stand out with solid financial fundamentals.
Quadrant Advisory: Your Comprehensive Financial Co-Pilot
Profitability in A&D isn’t easy. But it is possible—through financial clarity.
From fighter jets to commercial airliners, every aircraft relies on a ground support team to co-pilot their flight, keeping them calibrated, compliant, and mission-ready.
Similarly, winning contracts is never a solo mission. It requires careful coordination. Strategic foresight. The right instrumentation.
And that is where Quadrant Advisory comes on deck.
With decades of combined experience advising the A&D industry, our fractional CFOs and outsourced accounting teams empower you to militarize your financial function. From airtight scenario planning to actionable Price to Win insights, we give you the tools to grow without stalling out.
Curious how our team can help you secure that next contract? Let’s have a virtual coffee and chat.
This old pilot would be happy to hear your entrepreneurial war stories.
Sources:
Deloitte. 2025 Aerospace and Defense Industry Outlook. https://www.deloitte.com/us/en/insights/industry/aerospace-defense/aerospace-and-defense-industry-outlook.html
PwC. Resurgent demand for defense capabilities shifts focus to efficiencies and next generation research. https://www.pwc.com/us/en/industries/industrial-products/library/aerospace-defense-deals-outlook.html