The CEO of NBS Search, Paul Unger, spoke to WashingtonExec about the changes and consistencies he expects to see in the government contracting community come next year.
Paul Unger: Thank you for the opportunity to provide some insights and comments on the coming year.
Past experience is often a good predictor of what is to come. In 2012 the government contracting community will face some daunting challenges. Many are not without precedent. In the late 1980’s when the Berlin Wall came down and the country expected a large “peace dividend”, the aerospace and defense contracting companies underwent a huge amount of M&A activity and loss of big programs. 2012 will surely see a similar situation. In many cases it will be acquire or be acquired in order to survive. The small and medium government contractors will be squeezed and will have to become sharply focused on what is their value proposition to the government.
That said, there is still a pretty large pie of government contracting work. There are growth areas in government health care and health IT, cyber-security, expansion of the utilization of UAVs, border and port security and intelligence, satellite communications and geo-services to name a few. As we wind down two long wars we face the challenges of rebuilding spent supplies of armaments, missiles, vehicles, depot management and the logistics of resupplying. Government contractors and consultants who can help the government cut costs and operate more efficiently will be in high demand. M&A activity also means the elimination of redundant staffs and significant downsizings in many areas. This is in many cases a two edged sword. While the labor supply will swell from the government contractor ranks, the Washington, DC metro area is blessed with a healthy private sector which will over time absorb many of the displaced (particularly IT) workers. In my 35 years of executive search experience I have observed that whether we are in upturns or downturns, low unemployment or high unemployment, the “war for the best talent” never changes. Companies will hire their senior leadership to meet the challenges of the times. In the next few years much of the war for talent will be for the best CEOs, CFOs and CIOs who will provide the leadership for increasing productivity with fewer resources and costs.