WashingtonExec 2015 Market Outlook Series
We look forward to a new year and new opportunities for innovation and growth in the government contracting community. This past year, we experienced an increased emphasis on cybersecurity, the government’s procurement process and a perpetual focus on doing more with less.
WashingtonExec reached out to those most knowledgeable and experienced 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 2015. Topics discussed include M&A activity, cloud computing, privacy issues, data collection, healthcare IT, defense and more.
Brad Antle, President and CEO of Salient Federal Solutions, indicates the need for investment in new technologies such as data analytics and mobility will have great payoffs, despite the upfront risk they may seem to impose.
Brad Antle: I tend to believe that market for IT services has bottomed out, and we will see modest improvements in available funding. Many businesses have been using the downturn to reorganize and cut costs, reposition into areas that will be growing, improve the quality of the team they have on the field and invest in the capabilities that will be in demand going forward. Some companies have been waiting for the return of the growth, but the growth we experienced in the 2002-2009 timeframe won’t return anytime soon. LPTA acquisitions have risen virtually across the board, while the number of contract acquisitions have declined. I suspect some improvement, but those companies that have positioned for this new market, the new normal, will be the ones that come out on top.
Across the government, our customers have a full plate of issues that need to be addressed to keep them on step for supporting their respective missions. Clearly O&M costs have dominated the available budgets, taking money away from DME efforts. Historically these have been large systems development and deployment. That funding won’t be returning but the decline has stabilized. Agencies will have to find ways to leverage their existing funding streams to modernize antiquated systems.
Going forward, there will continue to be a cadre of customers who are adapting to the newer Agile technology to retire risk early in the development process and field smaller increments of meaningful capabilities that substantially improve mission impact. Adopting new technologies is often seen as risky; however, the payoff is significant. The risk is manageable and the exposure is small.
Clearly more investment will also be made on other technologies such as data analytics, mobility, cyber, cloud and the like. The demands are varied but the direction is obvious. The adoption of these newer technologies have demonstrated payoffs and will continue to return value to the agencies that make the move.