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.
Scott Goss, President and CEO of Preferred Systems Solutions Inc., believes there will be stabilization or improvement in DoD, especially in areas where the U.S. remains vulnerable.
WashingtonExec: What will next year hold for government contracting? More M&A activity, consolidation? More IT budget cuts?
Scott Goss: Generally, 2014 has not been a good year for the government contracting business. It used to be that best value and performance was favored over low-cost solutions. But in 2014, price competition has been fierce, and I think performance has suffered as a result.
Next year should prove quite interesting as the U.S. transitions to one party control in both the House and Senate. The Republicans will likely try to ease the effects of sequestration in the defense sector, which in turn, may place more stress on the federal civilian agencies.
Just as the consequences of budget cuts were felt long before sequestration went into effect in the form of lowest priced technically acceptable (LPTA) contracts, it may be a while before things improve in the industry. We will not likely see a reversal of the trend of low-cost awards in 2015, but I see a stabilization or improvement in DoD, especially in areas where the U.S. remains vulnerable. We need to be able to quickly respond to existing and emerging threats such as ISIS and large scale cyber-attacks, so these areas represent growth opportunities. Consolidation will be key in 2015, and the number of acquisitions will increase to levels not seen in the last few years.
WashingtonExec: What makes you most excited about the future of the GovCon space?
Scott Goss: The wave of retirements among Baby Boomers is beginning to crest. Young professionals who would traditionally be hired to backfill these positions are turning away from government service, citing stagnant salaries, sequestration, government shutdowns, etc. The government will have to rely on the vibrant and competitive GovCon professional services community to fill this void to allow agencies to effectively execute their missions.