Bert Osterweis

Bert Osterweis asked if any existing government contracts impose prohibitions on DLH Holdings pursuing civilian or commercial contracts.

Answer

CEO Zachary Parker and CFO Kathryn JohnBull confirmed there are no formal regulatory constraints prohibiting DLH Holdings from pursuing civilian or commercial contracts, but noted the distinct regulated environments and sales models involved.

Bert Osterweis inquired about the definition of 'civilian clients' mentioned in the annual report, given that discussions primarily focus on government clients, and whether DLH plans to increase its focus on commercial opportunities. He also asked if any government contract provisions prohibit DLH from pursuing civilian or commercial contracts.

Answer

Zachary Parker, President and CEO, clarified that 'civilian clients' refer to federal government agencies like NIH, CDC, and DHS, not commercial entities. He noted a small existing commercial book of business, often grant-funded or through university partnerships, particularly in biotech. Kathryn JohnBull, CFO, added that a significant move into the commercial market would likely require an acquisition, but they opportunistically leverage capabilities for government approval processes. Both confirmed there are no formal regulatory prohibitions against pursuing commercial work, but it involves a distinctly different sales model and investment strategy. They also highlighted the administration's push for government to operate at 'commercial speed' using vehicles like OTAs.