Arlington's due diligence landscape is shaped by its position at the center of the federal contracting and defense technology ecosystem. Acquiring a business here often means investigating government contract compliance, security clearance status, and regulatory obligations that do not exist in standard commercial acquisitions. Our managing partner handles Arlington-area due diligence engagements directly, conducting the investigative work that protects buyers in one of the most regulated M&A environments in the country.
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 Arlington 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 Arlington clients
What DCAA-related issues should I investigate when acquiring an Arlington defense contractor?
The Defense Contract Audit Agency audits government contractor cost accounting systems, incurred cost proposals, and forward pricing proposals. During due diligence, request all DCAA audit reports from the past five years, including any audit findings, questioned costs, or recommendations for contracting officer action. Investigate whether the company's accounting system has been deemed adequate by DCAA, as an inadequate system determination can disqualify the company from cost-reimbursable contracts. Review the company's incurred cost submissions to determine if there is a backlog of unaudited years, which represents potential liability exposure that should be reflected in the purchase price or addressed through indemnification provisions.
How do security clearances factor into due diligence for an Arlington acquisition?
Security clearances are a critical asset in the Arlington defense market. During due diligence, verify the company's facility clearance level, the number of employees holding active clearances at each level (Confidential, Secret, Top Secret, TS/SCI), and any pending clearance investigations or adverse actions. Investigate whether the company has a clean National Industrial Security Program history or any security violations. A change in ownership triggers notification requirements to the Defense Counterintelligence and Security Agency and may require a new facility clearance determination. If key cleared personnel leave during the transition, the company's ability to perform on classified contracts may be impaired.
What is the risk of False Claims Act liability when acquiring a government contractor?
The False Claims Act is the federal government's primary fraud enforcement tool against government contractors. During due diligence, investigate whether the company has received any Civil Investigative Demands, is subject to any qui tam lawsuits (which may be filed under seal and unknown to the company's management), or has any history of voluntary disclosures to government agencies. Review the company's compliance program, hotline reports, and any internal investigations. False Claims Act liability can result in treble damages and per-claim penalties, making it one of the most significant contingent liability risks in government contractor acquisitions. The purchase agreement should include specific representations about FCA compliance and corresponding indemnification provisions.
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 Arlington?
During your confidential initial consultation in Arlington, 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 Arlington?
Yes, we represent clients nationwide while maintaining a strong presence in Arlington. 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: Arlington & 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 Arlington
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.
Arlington M&A Market Insight
Arlington, Virginia is the home of the Pentagon, DARPA, and hundreds of defense contractors, cybersecurity firms, and government services companies that depend on federal contract revenue. Due diligence on acquisitions in this market goes well beyond standard financial and legal review. Buyers must investigate DCAA audit history and compliance posture, evaluate contract backlog and recompete probability, assess facility and personnel security clearance status, review organizational conflict of interest determinations, and examine compliance with the False Claims Act and related federal fraud statutes. The Arlington market also includes a growing commercial technology sector and professional services firms that serve both government and private clients. For these hybrid businesses, due diligence must evaluate the revenue mix, assess the transferability of government and commercial contracts, and determine whether key personnel who hold security clearances will remain post-closing.
Common Deal Scenarios in Arlington
1
Government Contractor Due Diligence
Due diligence on a government contracting acquisition in Arlington requires investigating each active contract's status, funding level, period of performance, and recompete timeline. Review DCAA audit history for any adverse findings or unresolved questioned costs. Assess the company's compliance program, including its policies on the False Claims Act, organizational conflicts of interest, and the Procurement Integrity Act. Evaluate the contract mix (firm-fixed-price vs. cost-reimbursable vs. time-and-materials) and its impact on margin stability. Determine whether any contracts require novation or assignment approval from the contracting officer.
2
Cybersecurity or Defense Technology Company Due Diligence
Acquiring a cybersecurity firm in the Arlington corridor requires specialized due diligence on intellectual property ownership, export control compliance (ITAR and EAR), classified program access, and the company's security posture. Investigate the facility security clearance level, the number of cleared personnel, and any security violations or incidents in the company's history. Review SBIR/STTR awards and associated data rights to understand IP ownership boundaries between the company and the government. Evaluate the technology stack for any open source components that could create licensing complications.
3
Professional Services Firm Due Diligence
Arlington-area professional services firms (consulting, staffing, IT services) serving the federal government require due diligence focused on employee and contractor classification compliance, wage determination accuracy under Service Contract Act requirements, and key person dependencies. Many of these businesses derive their value from relationships with specific government agency personnel and institutional knowledge of program requirements. Due diligence must assess how sustainable those relationships are post-acquisition and whether the key personnel driving revenue will remain with the company.
Why Arlington for M&A
Arlington is ground zero for defense and government services M&A, and the due diligence requirements reflect that reality. Buyers acquiring companies in this corridor face a regulatory environment that includes DCAA compliance, security clearance management, export control laws, organizational conflict of interest rules, and False Claims Act exposure. Standard commercial due diligence checklists are insufficient for this market. The investigative work must be conducted by counsel who understands how these federal regulatory frameworks interact and how to structure the purchase agreement to allocate the risks they create.
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 Arlington Acquisition Due Diligence Law Pitfalls
These are the items we see derail acquisition due diligence law transactions in the Arlington 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).
"The LOI is an excellent entry point. From a legal perspective, it's one of the largest moments where an attorney can add real value. If something gets codified in an LOI, it's often far more dangerous and binding than the buyer believes. People look at the title of an LOI on Google and assume non-binding means harmless. The first thing you learn in legal training is that the title of a document is not indicative of its substance. An LOI is not just an expression of interest. It is binding in many ways. Even if you set aside the legal repercussions of the document's nuances, look at how these get put together without outside help. The buyer attaches themselves to a price, a structure, a tactical concession that they can no longer change later in the process. Pre-LOI engagement is when an attorney earns their fee."
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
Your lawyer might help you close the deal. But if they're not there to help you realize its value afterward, you're leaving money on the table.
Guides and Resources
In-depth guides to help you prepare for your transaction
