Alexandria's business environment is defined by its proximity to the Pentagon, federal agencies, and the defense and intelligence community that concentrates in Northern Virginia. Due diligence on government contractors, professional services firms, and cleared facilities in this market involves layers of regulatory review that do not exist in commercial transactions. DCAA compliance, security clearance transfers, ITAR considerations, and government contract novation requirements all shape the scope and timeline of due diligence here. Our managing partner handles these engagements directly.
Search fund operators conducting diligence on their first acquisition
Corporate development teams acquiring companies in regulated industries
Independent sponsors who need diligence to satisfy lender requirements
Family offices evaluating operating company investments
See If Your Deal Is a Fit
Tell us what you are working on. We respond within one business day.
Submission Received
Your transaction details are under review. If there is alignment, we will be in touch.
Meanwhile, feel free to call us directly at (248) 266-2790
Our Process
A structured, methodical approach to acquisition due diligence law
1
Diligence Planning
We create a customized due diligence checklist and request list based on the target company's industry, size, and deal structure, then coordinate document collection with the seller.
2
Document Review & Analysis
Our team reviews every material contract, corporate record, litigation file, and regulatory filing in the data room, flagging risks that could affect valuation or deal terms.
3
Risk Identification
We identify and categorize risks by severity, including potential liabilities, contract issues, compliance gaps, and operational exposures that require attention before closing.
4
Findings Report & Recommendations
Managing Partner Alex Lubyansky delivers a clear, actionable findings report with risk-ranked issues and specific recommendations for how to address each one in the purchase agreement.
5
Deal Term Negotiation Support
We translate diligence findings into negotiation leverage, drafting specific representations, warranties, indemnities, and closing conditions that protect you from identified risks.
We don't take every matter. Here is what happens when you reach out.
1
Personal Review (Within 24 Hours)
Alex reviews your transaction details personally. No intake coordinators, no junior associates screening your submission.
2
Fit Assessment
We evaluate whether your deal aligns with our practice. Not every matter is a fit, and we will tell you directly if it is not.
3
Initial Conversation
If there is alignment, Alex schedules a direct call to discuss your transaction, timeline, and objectives.
4
Clear Engagement Terms
Before any work begins, you receive a written engagement letter with defined scope, timeline, and fee structure. No surprises.
Request Your Alexandria Engagement Assessment
Alex Lubyansky handles every acquisition due diligence law engagement personally.
15+ years of M&A experience. Nationwide. One attorney on every deal.
Request Engagement Assessment
We review every transaction inquiry within one business day.
Submission Received
Your transaction details are under review. If there is alignment, we will be in touch.
Meanwhile, feel free to call us directly at (248) 266-2790
Questions to Ask Any M&A Attorney Before Hiring
Use these before you call any firm, including ours.
1. "Who will actually handle my transaction?"
At many firms, a partner sells the work and a junior associate does it. Ask for the name of the attorney who will draft and negotiate your documents.
2. "How many M&A transactions has the lead attorney closed in the past 12 months?"
Volume indicates current, active deal experience, not just credentials from years ago.
3. "What is your experience with my deal size and industry?"
A $500K SBA acquisition and a $50M PE deal require different skill sets. Make sure the attorney has handled transactions similar to yours.
4. "Will you coordinate with my CPA, financial advisor, and broker?"
M&A transactions require a team. Your attorney should work with your other advisors, not in a silo.
5. "How do you handle post-closing disputes?"
Reps, warranties, and indemnification claims surface months after closing. Ask whether the firm handles post-closing litigation or refers it out.
6. "What is your fee structure, and what drives cost?"
Hourly, flat fee, or hybrid. Ask what factors increase legal costs so there are no surprises.
Frequently Asked Questions
Common questions from Alexandria clients
How does a change of ownership affect a company's facility security clearance?
A change of ownership triggers reporting obligations to DCSA under the NISPOM. The specific requirements depend on the deal structure. In a stock purchase, the new owner must be cleared or a proxy/voting trust arrangement may be required, particularly if the buyer involves foreign ownership, control, or influence (FOCI). In an asset purchase, the acquiring entity typically needs to obtain its own FCL, which requires sponsorship from a government contract. The transition period between ownership change and clearance resolution is a critical gap that must be addressed in the purchase agreement, often through transition services agreements or interim arrangements.
What is government contract novation and how long does it take?
Novation is the process by which the government formally recognizes a new contractor as the successor to existing contracts after a change of ownership. Under FAR 42.12, the buyer, seller, and government enter into a novation agreement. The process requires submission of a novation package to the responsible contracting officer and typically takes 3 to 12 months depending on the complexity of the contracts and the responsiveness of the contracting office. During this period, the seller remains the legal contractor, and performance continuity must be addressed through interim arrangements.
What DCAA compliance issues should I look for during due diligence?
Key DCAA compliance areas include the adequacy of the contractor's accounting system (particularly for cost-reimbursable contracts), timekeeping system controls, indirect rate structure and allocation methodology, incurred cost submissions and their audit status, and any history of questioned or disallowed costs. A contractor with a DCAA-adequate accounting system and clean audit history is more valuable and carries less post-closing compliance risk. Conversely, unresolved DCAA findings can result in rate adjustments, contract terminations, or False Claims Act liability that transfers with the acquisition.
What does a due diligence attorney do in an acquisition?
A due diligence attorney investigates the legal health of a target company before you close the deal. This includes reviewing contracts, litigation history, regulatory compliance, intellectual property, employee matters, and corporate governance. At Acquisition Stars, we go beyond checklists to give you a clear, strategic picture of what you are actually buying.
How long does legal due diligence take?
Legal due diligence typically takes 3 to 6 weeks depending on the size and complexity of the target company. Acquisition Stars is structured for speed, and Managing Partner Alex Lubyansky personally oversees every diligence engagement to ensure we meet your deal timeline without sacrificing thoroughness.
What risks does due diligence uncover?
Common findings include undisclosed liabilities, contracts that do not survive a change of control, pending or threatened litigation, regulatory non-compliance, intellectual property ownership gaps, employee classification issues, and environmental exposures. Any of these can significantly affect valuation or kill a deal entirely.
What happens if due diligence uncovers problems?
Diligence findings give you negotiation leverage. Depending on the severity, you can negotiate a purchase price reduction, require the seller to fix the issue before closing, add specific indemnification protections to the purchase agreement, or walk away from the deal if the risks are too significant.
Why not just use my general business attorney for due diligence?
Acquisition due diligence requires specialized M&A experience. A general business attorney may not know which risks matter most in the context of a transaction or how to translate findings into protective deal terms. Acquisition Stars has 15+ years of exclusive M&A experience, which means we know exactly where to look and what to do with what we find.
What are the Virginia tax considerations for transaction due diligence?
Virginia imposes a 6% corporate income tax. The state uses a double-weighted sales factor apportionment formula. Virginia conforms to most federal tax provisions but has a fixed-date conformity, meaning it does not automatically adopt federal tax changes. This can create differences between federal and Virginia treatment in the year of a transaction.
What can I expect during an initial consultation in Alexandria?
During your confidential initial consultation in Alexandria, we'll discuss your acquisition due diligence law needs, review your current situation, assess potential challenges specific to Virginia, and outline a clear path forward. We'll explain our process, answer your questions, and determine if we're the right fit for your needs.
Do you work with companies outside of Alexandria?
Yes, we represent clients nationwide while maintaining a strong presence in Alexandria. Our managing partner handles acquisition due diligence law matters across all 50 states, coordinating with local counsel where state-specific requirements apply.
Need Specific Guidance?
Submit your transaction details for a preliminary assessment by our managing partner
Submit transaction details and Alex will respond directly.
Submission Received
Your transaction details are under review. If there is alignment, we will be in touch.
Meanwhile, feel free to call us directly at (248) 266-2790
M&A Market: Alexandria & the Washington DC Metro
The DC metro area's M&A market is uniquely driven by government contracting, cybersecurity, and professional services firms. GovCon acquisitions represent the largest deal category, as defense and IT services companies pursue scale to compete for larger contract vehicles. The region also sees significant deal flow in healthcare (anchored by NIH), consulting, and lobby/public affairs firms.
Top M&A Sectors Near Alexandria
Government Contracting
Cybersecurity
Professional Services
Healthcare & Biotech
Defense Technology
Deal Environment
GovCon M&A requires specialized due diligence on contract novation, security clearances, and DCAA compliance. Buyers without GovCon experience often underestimate the regulatory complexity of acquiring cleared contractors.
Why Acquire in the Washington DC Area
The federal government spends over $700 billion annually on contracts, creating a massive and recession-resistant market. GovCon companies with established contract vehicles and security clearances command premium valuations.
Virginia Legal Considerations
Virginia's non-compete statute (effective 2020) prohibits non-competes for low-wage employees and requires careful drafting for enforceability - acquirers must review all employee agreements across the DC, Maryland, and Virginia jurisdictions as each state has different rules.
Alexandria M&A Market Insight
Alexandria and the surrounding Northern Virginia corridor (Arlington, Fairfax, Springfield) house one of the densest concentrations of defense contractors and government services firms in the country. Due diligence on these businesses goes well beyond standard financial and legal review. Buyers must assess government contract backlog and recompete schedules, DCAA audit history and compliance posture, facility security clearance (FCL) status and key personnel clearances, ITAR and EAR compliance for any controlled technology, and organizational conflict of interest (OCI) restrictions that may limit the combined entity's ability to bid on certain contracts. The timeline for due diligence in this sector typically runs longer than commercial deals because government contract novation and security clearance transfer processes involve third-party agency approvals.
Common Deal Scenarios in Alexandria
1
Defense Contractor Due Diligence with Security Clearances
Acquiring a cleared defense contractor requires due diligence on both the business fundamentals and the security infrastructure. Key focus areas include the facility security clearance (FCL) and its transferability under a change of ownership, key management personnel (KMP) clearances and their willingness to remain post-closing, compliance with NISPOM requirements, and any open security incidents or adverse actions. DCSA (Defense Counterintelligence and Security Agency) must be notified of ownership changes, and the process can take months depending on the deal structure and foreign ownership considerations (FOCI).
2
Government Services Firm Acquisition with Contract Novation
When a government services firm changes ownership, existing government contracts must be novated under FAR Subpart 42.12. Due diligence must assess which contracts are novatable, the timeline for novation processing, interim performance arrangements, and the risk of contract termination during the transition. The contracting officer has discretion in approving novation, which introduces uncertainty that must be addressed in the purchase agreement through conditions precedent or risk allocation provisions.
3
DCAA Compliance Review for Professional Services Acquisitions
Government contractors billing on cost-reimbursable or time-and-materials contracts are subject to DCAA audit jurisdiction. Due diligence must review the target's accounting system adequacy (DCAA-approved systems command higher valuations), indirect rate structure and any pending rate audits, incurred cost submissions and their status, and any disallowed costs or questioned costs from prior audits. DCAA compliance history directly affects the business's ability to win new contracts and maintain existing ones.
Why Alexandria for M&A
Alexandria and Northern Virginia represent the epicenter of government contracting M&A activity. Due diligence here requires a skillset that combines traditional M&A legal review with deep knowledge of federal acquisition regulations, security clearance infrastructure, and DCAA compliance. The regulatory complexity creates both risk and opportunity: buyers who conduct thorough due diligence can acquire valuable contract vehicles and cleared workforces, while those who shortcut the process face post-closing compliance exposure that can erode deal value.
Virginia Legal Considerations for Acquisition Due Diligence Law
Non-Compete Laws
Restricted by income threshold. Strict blue-pencil (no reformation).
Filing Requirements
Entity mergers and conversions require filing with the Virginia State Corporation Commission (SCC). Annual reports (annual registration fees) are required. The SCC also regulates certain types of business entities more actively than most states.
Key Virginia Considerations
Virginia's State Corporation Commission (SCC) is a constitutionally independent regulatory body with broader authority over business entities than most states' secretaries of state
Virginia's fixed-date conformity with the federal Internal Revenue Code means the state may not have adopted recent federal tax changes, creating potential divergence in transaction tax treatment
Northern Virginia's concentration of government contractors and technology companies creates CFIUS and national security considerations in many acquisitions
Virginia Bar Authority
Virginia State Bar (mandatory unified bar). Unified/integrated bar (Virginia State Bar is the regulatory body). The Virginia Bar Association is a separate voluntary organization. VSB membership is required to practice law in Virginia.
Business court: No dedicated business court division. Commercial disputes proceed through general civil courts.
Virginia M&A Market Context
Northern Virginia is a national cybersecurity and government IT M&A hub; Richmond generates financial services and consumer products deal activity.
Watchpoints
Common Alexandria Acquisition Due Diligence Law Pitfalls
These are the items we see derail acquisition due diligence law transactions in the Alexandria market. Each one is rooted in current statutory law, recent legislative changes, or recurring patterns from the deals Alex has handled.
1
Virginia non-compete enforcement and earn-out exposure
State legal framework
Restricted by income threshold. Strict blue-pencil (no reformation).
"Non-binding is just a phrase. It does not guarantee a frictionless process down the line. An LOI can absolutely structure the entire future of a deal even when the document explicitly says non-binding. If counsel comes in later in the game, the LOI is already there, and parties will anchor to it. Whether or not you were involved in the drafting. Whether or not you were involved in the negotiation. They will anchor to that document. And when deals blow up, fingers get pointed at the LOI's terms. The phrase non-binding sets a buyer's expectations. The substance of the document sets the deal. Those two things are different, and the gap between them is where deals get expensive."
2
Virginia regulatory framework attorneys flag at LOI
State statute
Securities regulated by Virginia State Corporation Commission Division of Securities and Retail Franchising (scc.virginia.gov/securities). Blue Sky notice filings required for Reg D. Virginia restricts non-competes for employees earning at or below a wage threshold (Code of Virginia sec. 40.1-28.7:8).
3
Common acquisition due diligence law mistake from the field
From Alex Lubyansky
Seller financing is a huge buzzword. Run analytics on where your inbound comes from and you'll see it. Speak publicly about seller financing and you will attract a massive amount of interest. The trouble is, the same buzzword attracts unqualified buyers. People without intent. People without funding. People without the ability or desire to actually move forward. I love the idea, and I love the possibility of a creative structure. But it's far less likely than the internet would have you believe. The unicorn opportunity that's completely seller financed, runs hands off, and flips at a massive multiple in months... that math doesn't really make sense. You see it constantly online because it works as a way to attract a large amount of interest. Just not necessarily qualified interest.
Guides and Resources
In-depth guides to help you prepare for your transaction
