2015 Market Outlook: Vencore President and CEO Mac Curtis — Contractors Must Adjust to Lower Acquisition Costs

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.

Vencore Inc. President and CEO Mac Curtis predicts the rapid innovation of technology will continue to pose a challenge for government contractors.

Mac Curtis: Growth among government contractors will remain challenging in 2015.

While the government IT and national security markets are vast, there is intense pressure to lower government acquisition costs. As a result, contractors are feeling more pressure than ever to compete with bids that provide little margin for continued investment and growth. This low-cost government marketing strategy makes it difficult for government contractors to keep pace with the rapid technological innovation that exists in the commercial business model. While government customers want work solutions that are fast-paced like the technology they experience in their daily lives, the current government contracting environment will have to evolve to a more efficient business model before that type of rapid development can occur in the federal markets.

On the M&A front, this current environment lends itself to continuing consolidation, particularly among medium-sized firms with key contracts and programs, in an effort to develop increased efficiencies. Small firms with niche technology, particularly where there are opportunities for near-term applications in the areas of cyber, critical infrastructure and smart (data) analytics, will also be attractive to companies looking to expand their critical mass.

Related: The SI Organization Swaps Name for Vencore