2012 is fast approaching, and with it comes big changes in the Federal IT industry. WashingtonExec is giving local executives the opportunity to share their thoughts on where they see the government contracting industry headed. Leaders of the industry were asked a series of predictions questions focused on challenging issues such as cloud computing, healthcare IT, defense and so forth.
Meet Tony Jimenez, President and CEO of Tysons Corner-based MicroTech.
“I think the next year will be extremely volatile and an unpredictable environment for Government Contracting. We all know there will be cuts and consolidation and even though we have a good idea which agencies will get some of the cuts we have no idea how the cuts will be allocated or what the final numbers will be.
The trends do indicate that small business will be impacted the most. The Small Business Administration (SBA) which is the agency that provides support to entrepreneurs and small businesses and advocates on behalf of small businesses and the Minority Business Development Agency (MBDA) which is responsible for promoting the growth of businesses owned by ethnic minorities are both being asked to do more with less and many of the small business contracts that were in existence a year ago are either being bundled into larger contracts, indefinite delivery indefinite quantity (IDIQ) contracts or are going away completely.
Large Government Contractors will also be hit hard and System Integrators (SIs) will look to consolidate and reorganize to ensure they can gain efficiencies quickly, improve their profits and weather the storm. Many are cutting their staffs now in anticipation of the government budget cuts that everyone knows will come and those that are growing their business are not hiring at the rate expected because of the perception that even though a contract is in place the work could be reduced or the contract could be de-scoped at any time.
I think M&As will be on the rise this coming year as larger companies look for ways to increase revenue and profit that can’t be increased through organic growth and the focus will be on those business that provide support in the Healthcare, Cloud Computing, Data Consolidation and IT and Network Security environment.”