2014 Market Outlook: Gary Slack, President & COO of QinetiQ North America, Foresees Industry Stability, Increase in M&A Activity

Gary Slack, President and COO, QinetiQ NA

Gary Slack, President and COO, QinetiQ NA

2014 – WashingtonExec Annual Market Outlook Series

As we turn the page on 2013, we look forward to a new year and new opportunities for innovation and growth in the government contracting community. This past year we experienced budget sequestration, a 16-day-long government shutdown, and a perpetually increasing focus on cyber security and healthcare IT.

WashingtonExec reached out to those most knowledgeable and experienced individuals in the federal contracting space. We asked executives in and around the beltway for insight regarding where they see the government contracting community headed in 2014. Topics discussed include M&A activity, cloud computing, healthcare IT, defense, mobility, and more.

Gary Slack, President and Chief Operating Officer of QinetiQ North America, is optimistic about 2014:

“As we enter 2014 the industry as a whole will see more clarity around future opportunities.  The pace of activity will most likely return to pre-war levels and customers will again be faced with taking a longer term view of their requirements.  This will open up opportunities for those in the business for the long run.

Industry veterans will see 2014 as a return to steady state, much like the latter 1990s, whereby new business capture and company investments focus again on longer term opportunities instead of short term needs.  The passing of a budget will enable buying commands to move forward with pent up contractual demand for products and services. Overall I am optimistic about the space in 2014.

M&A activity will also increase as the visibility into future programs improves.  Many firms, especially those in the services sector, will look to consolidation as competition tightens and organic growth is stalled.  Merging capabilities as well as back office support will be trending in 2014.

IT budget cuts across the government will spurn a need for lower cost solutions in the space.  The government will continue to have a demand for IT and related services, however the attention will turn from new technology and systems to re-configuration or re-purposing of the massive infrastructure already in place.  Those firms able to provide “low cost technically superior” (LCTS) solutions in this space will be the winners in 2014.

Additionally, collaboration, much as it has for the past several years, will continue to trend in 2014.  As budgets tighten across the space many customers will look to industry groups for ideas and solutions to the growing needs to gather and manage massive amounts of data, particularly healthcare.  Big data, Cloud, and Mobility will continue to litter the front pages of the trade publications as many of our government clients struggle with the changing nature of the workforce (more mobile) and the need to maintain increasing amounts of data without buying more hardware and infrastructure (Big Data, Cloud)…and lastly keeping all the data secure in this environment (Defense/IC).

The real challenge will be for industry and the regulatory bodies to discover a way forward that is both collaborative and productive in this ever changing environment.”

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