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.
YRCI’s President Gil Smith believes LPTA is on the way out, while data collection and the depersonalization of American will continue.
2015 will continue to be a year of consolidation, restructuring and solidification of partnerships developed in 2014. The federal customer will continue to be driven to set-aside work and offer up work that cannot be absorbed by small businesses and feed the need to partner. Proven relationships in 2014 will bring success in 2015.
LPTA will continue to die a slow death in the professional services markets as program offices and contracting officers realize that LPTA awards in this arena yield short-staffed, under qualified service providers and failed delivery models. In an effort to reduce competition into manageable chunks, agencies will issue large scale IDIQ’s and conduct more and more task order level competitions; thus, reducing the competitive landscape to 15 or less competitors on a regular basis, avoiding competitions where hundreds of respondents need to be evaluated. I foresee this to be a derivation of sticking to LPTA by making the task orders among pre-qualified IDIQ awardees LPTA competitions. Again, professional services are “professional,” and you do not get a professional by going LPTA. Eventually, the tide will turn, and it will be turning faster in 2015.
Collaboration between industry and government will decline as the [Obama] Administration enters its last two years. There may be a rush to accomplish in 2015 as funds are available thanks to the cromnibus and politicals that are seeking to leave a positive legacy. Sequestration will again loom large at the end of the FY so the purchasing season will again be frantic as awards are made to span into FY16. The long term politicals will start to leave (see USAID as an example) as they seek to preserve their access to government after service by departing prior to January 2016. This will leave the stalwart SES’s behind to manage and make solid, generally apolitical, decisions.
The age of data collection and the depersonalization of America will continue as we become more and more dependent on virtual life. The cyber threat has become real and cyber warfare is now more overt. We will face reality that there is little proprietary left in our businesses and that recipe for our own personal Coca Cola best be kept on real paper, in a real vault, and never see the light-speed world of bits and bytes.
When considering that years ago, we all hid our social security card from plain view and today everything personal is in our phones. Life and business is as accessible as a stock price despite our best efforts to stay “private.” Privacy now is more of an expression of how much control you feel you have over personal and proprietary information, as opposed to really having it behind closed doors. Social media prevails in our marketing, short sound bites vs. white papers, high impact and high speed. Life and business events fit into 50 characters or a single photo. Leaders, we will continue to strive for personal interactions to be successful. Business will fortunately still be conducted most effectively, in person.
Uncertainty is the king of market risk. The future in GovCon is uncertain. FY15 looks to be somewhat predictable with level funding, the exception being DHS and the big unknown surrounding immigration reform and DHS funding. FY16, the rush to the end of 2015 and the Obama administration going into its last two years all create greater uncertainty. Our company, YRCI, looks forward into 2015 with great optimism. We have grown during the past few years of uncertainty and the obvious challenges.
Professional services in the management disciplines will continue to be in demand, and we see a role in filling that demand. We are growing and investing in our company and will continue to partner and reach out to find new partners so we can be successful in the set-aside market. We will generally avoid LPTA offers in the professional services market and will continue to pursue large enterprise based solutions while working with senior leadership. We have grown by listening to our customers, partnering on solutions, offering agile and scalable solutions that are thin on infrastructure needs and costs and high on quality delivery. We will continue to work on government by providing exceptional employees that exceed expectations to our clients. We plan to remain an employer of choice in the professional management services arena and plan to remain active in our community and an engaged partner with industry.