Kevin Robbins isn’t a pundit, but when a presidential election rolls around, his partners start to get a little nervous.
Boards start asking, “What’s your strategy for a Clinton White House … a Trump White House?” says Robbins, co-founder of Wolf Den Associates, a consultancy that advises federal market participants on how to accelerate their growth through strategic planning, capture and proposal, buy-side M&A support, and technical innovation.
As early as last May, Robbins was telling Wolf Den’s clients – nearly 200 in all – that Trump could win the presidency.
“It was really early in the primary season when we started looking at the enthusiasm, the outpouring of support . . . and we started saying, ‘Don’t discount Trump,’” says Robbins, whose firm serves half of the Washington Technology Top 100, including eight of the top 10, plus various financial sponsor clients with more than $250 billion in assets under management.
Now that Robbins’ prediction has come to pass, what does it mean for government contractors?
We brought that question to Robbins himself in the days before the inauguration. Hear what this growth practitioner – whose idea of good nighttime reading is poring over the latest federal RFP – has to say about a Trump presidency’s impact on your business lines. Plus, learn the top investments you should make as you plan ahead.
WashingtonExec: In retrospect, how wild was your prediction of a Trump win?
Kevin Robbins: It wasn’t a wild prediction here. In retrospect it only seems wild because everybody else was forecasting Clinton. From where we sat, it was a simple math game around turnout and underlying demographics of who would show up and who would stay home.
WashingtonExec: What does a Trump victory now mean for government contractors?
Kevin Robbins: Trump fundamentally has a bias toward smaller government. If you are in a line of business that is keyed toward a regulatory framework, it might be tough. That said, watch for tax reform, watch for relaxed regulations on how we issue securities, look for the return of some A76 (insource vs. outsource) discussions – instead of starting with a government bias, it’s flipping the other way around to, “Prove why the government should be doing this and not a commercial business.” That simple turn of phrase will be a useful yardstick for contractors as they look ahead.
WashingtonExec: What contracts will see an uptick under a Trump administration?
Kevin Robbins: You can look for the Trump administration to accelerate the move toward performance-based contracting, not because they understand contracting but because they understand commercial agreements. How many billionaires are in this cabinet? These are successful business people who got to where they are by performing and demanding performance from their business partners. They are going to expect the same from government entities and their contractors.
WashingtonExec: How should contractors demonstrate value?
Kevin Robbins: Focus on outcomes, not inputs. You will have to demonstrate hard data and metrics around your performance, especially if you are an incumbent. If you are maintaining a help desk, point to your SLAs and up-time. If you are delivering software, point to the metrics around whether it was delivered on time and at cost with or without defect, as well as the positive business impact. If you have staffing and LOE contracts – you better be able to show that you are meeting the staffing requirements, minimizing the fill times and passing on efficiencies over time.
WashingtonExec: What investments should contractors make as Trump takes office?
Kevin Robbins: It’s pretty clear that Trump will try to ramp up defense spending. I think you can expect that cyber and space will receive heightened spending under a Trump administration. Certainly, Trump has handled the VA with kid gloves since winning the election – and appointed the only holdover from Obama in Dr. Shulkin – but there will be increased spending there, so watch that one carefully.
On the civilian front, I don’t know if there is a near-term political or policy catalyst to increase spending beyond domestic infrastructure (DoT) and those closest to combatting fraud waste and abuse (CMS, IRS, FDA).
WashingtonExec: What are the top unknowns ahead for contractors?
Kevin Robbins: Two big factors out there that we don’t know are, ‘What is going to happen to the entitlement system?’ – I don’t think anybody knows that answer – and ‘Is there going to be a bumper crop of civilian IT spending to try and glean efficiencies in those budgets by substituting capital for labor?’ Those are areas that we will watch closely.
WashingtonExec: Are there any business lines contractors should abandon?
Kevin Robbins: No, definitely not. The government has an amazing amount of inertia. If you’ve got a customer paying you to do something, it takes a long time to get somebody to stop paying you to do that. There are examples like the DOD Business Transformation Agency, where an entire office gets eliminated, but even in those instances those people didn’t go away, they just moved to another organization and changed the nameplate.
WashingtonExec: You’ve said that whether this was going to be a Clinton or Trump win, it was likely to be a one-term presidency. How would you advise contractors to map out growth over the long term?
Kevin Robbins: Wolf Den currently serves nearly 200 clients and I don’t know any of them that are planning even three years out at this point. One of our clients uses this analogy and I like it a lot: ‘In the old days, if you were a AAA member and you were taking a road trip, you would get a TripTik that detailed each and every turn en route to your destination.
Now, even if you are a AAA member, you are probably using Waze, which knows your target destination, then tells you your next few turns but then dynamically changes the route based on traffic and other hazards.’ That’s modern agile strategic planning. Our advice is to define the desired goal and get consensus around it, then focus a lot more on the next five quarters, not the next five years. That’s what I would encourage anybody to do regardless of who was in the White House.
WashingtonExec: Is there one last big prediction that you would leave contractors with?
Kevin Robbins: We may see a shuttering of some of the – what I will call ‘desperate attempts’ – to graft Silicon Valley innovation onto government root stock. By that, I mean things like 18F and DIUx. I think the Trump White House will look at [in-house government startups] as a failed experiment – a classic example of well-intended but failed government policy.
The government still has a need to innovate but they are going to do it by forcing prime contractors to come up with innovative solutions and demonstrate the value through outcomes – the performance basis of adopting those innovations – not by putting out press releases and opening up offices in San Francisco.