WashingtonExec 2013 Government Contracting Outlook Series:
The new year brings big changes for the Federal IT industry, and WashingtonExec is back with its Government Contracting Industry Outlook Series.
We are giving local executives the opportunity to share their thoughts on where they see our industry headed this year and beyond. Leaders were asked a series of questions focused on cloud computing, healthcare IT, defense, mobility, and more.
Jim Sheaffer of Sheaffer & Associates and former President of CSC’s North American Public Sector, spoke with us about what he expected in 2013:
Last week’s political theatre confirms that the fog obscuring budget reduction specifics in both defense and civilian programs will remain deep into 2013. However, the prospects of leaner times for the government services industry in the next 3-5 years is certain.
I foresee three likely impacts in the mid-term:
(1) The Administration will react to favor preservation of government positions at the expense of contractor services — firms specializing in staff augmentation, maintenance, and operations services will suffer.
(2) Expect no let-up in agencies’ efforts to offload risk, maximize purchasing flexibility, and emphasize oversight — cost and risk of doing business with the government will increase.
(3) Investment capital will favor firms that leverage specific products/solutions and yield greater return than labor content
Despite the challenges, the size of the government market will continue to attract investment — larger companies will aggressively seek to acquire products/solutions providers to gain pricing advantage in areas of emerging policy emphasis. An example: Cybersecurity in the healthcare industry.
Jim Sheaffer recently caught up with WashingtonExec at our November Happy Hour.