THE LEX COLUMN: Government contracts: big budgets and tricky customers
Governments, already backstopping private sector salaries in this pandemic, are increasingly stepping up to the plate as customers too. Take Microsoft, which has managed to flog 120,000 augmented-reality headsets to the US army. The contract, worth as much as $21.9bn over 10 years, would add about 1.5% to its current annual sales.
For certain industries the state has long been the biggest game in town. Defence is one. About 90% of BAE Systems’s sales, for example, count government entities as the end buyers. Peter Thiel’s Palantir, for all the pre-IPO (initial public offering) talk of commercial clients, still relied on governments for more than half of revenues in the fourth quarter. That is not all military contracts: the US data analytics group also snatched a controversial £23m contract from Britain’s National Health Service...