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.
Randy Fuerst is the President and Chief Operating Officer at Oceus Networks — a telecommunications and wireless solutions provider. He has more than 30-years of industry experience in the delivery and management of technology systems and services across the federal government and this year predicts continued federal budget reductions which will lead contractors to cut costs and invite industry and government to escalate their collaboration.
WashingtonExec: What will next year hold for Government Contracting? More M&A Activity? More IT budget cuts?
In spite of the fact that Congress reached agreement on a Federal Budget through 2015, there will undoubtedly be more budgets cuts, although not as drastic as if we had to live through another round of sequestration. Defense Secretary Hagel has already announced a 20% reduction in OSD staff so it’s easy to predict that more of our Federal Government customers will be examining how to cut costs. Many of our customers are no longer attempting to “do more with less” – they are looking to do less more smartly and cost effectively.
At Oceus, we see that as good news, for the Government, the taxpayer, and our company. The focus on working more smartly and cost effectively leads our customers to examine use of commercial technology to achieve their goals. We’ve successfully integrated leading-edge commercial technology to help our customers meet their demanding mission requirements. Use of commercial technology leverages the multi-billion dollar investment by the high tech community, allowing our customers to focus their scarce dollars on meeting their mission requirements rather than spend money on technology development.
M&A activity in 2014 will increase. History has demonstrated that, during Federal budget downturns, companies look to acquisitions to enhance their growth. I predict that acquisitions will not only emerge in the form of small and medium-sized companies selling to larger companies, but that you’ll also see larger conglomerates or international companies spinning off the defense and US Federal branches of their enterprises. At Oceus, we are definitely looking at acquisitions as a way to accelerate our technology depth and contract reach to better serve our customers. Our 2014 plan is to grow internally as well as by acquisition.
WashingtonExec: What shape will collaboration take between industry and government in addressing tough issues: Healthcare, Defense, Big Data, Mobility, Cloud, etc?
Oceus is also focused on delivering cutting edge mobility solutions to its customers. This year we were a partner in a great example of government-industry collaboration in mobility. We joined forces with the Naval Air Systems Command (NAVAIR) to deliver the first tactical 4G LTE capability to operate at the Secret level. This project was recently recognized by GCN as one of the top 15 technology projects in 2013 and is an excellent example of government-industry collaboration. I predict that the Government will embrace more of these pilots as a cost-effective way to quickly field emerging mobility technology. For instance, we’re already involved in additional initiatives delivering 4G LTE technology to the Army and to Navy aerostats and UAVs. The next step is for the Government to integrate these capability sets into major programs of record.
Another area to watch for progress in mobility in 2014 is the actions of FirstNet, (First Responder’s Network Authority) which is congressionally mandated to establish a nationwide wireless broadband network for First Responders. FirstNet stood up in 2013 with a Board and program staff, a high-level architecture, and a series of RFI’s, so we’re looking for FirstNet to award some technology pilots in 2014. Additionally, some of the forward-leaning state or local governments will make awards in 2014 that advance the ability of First Responders to take advantage of the huge leaps in mobile technology to better serve the public.
In conclusion, those who leverage innovation and the rapid pace of technology change, and the opportunities presented by a service-oriented approach, Web 2.0, social media, cloud computing, and mobility will be in the driver’s seat to a bright future. However, in 2014 and beyond, we must all renew our commitment to an integrated teamwork approach across Government agencies, industry, and academia to yield unmatched, operational advantage to our war fighters and homeland defenders.