2018 Market Outlook: Joseph P. Nicholas of STG Group, Inc


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 big data, insider threat, merging technology with healthcare, and the internet of things, among others.

WashingtonExec reached out to those most knowledgeable and experienced in the federal contracting space. We asked executives in and around the Beltway for insight on the direction they see the government contracting community heading in 2018. Topics discussed include M&A activity, public/private sector collaboration, cloud computing, the incoming millennial workforce in defense/IT/health care, talent retention, and more.​

Joseph P. Nicholas, STG Group

Next in the series is Joseph P. Nicholas, senior vice president and sector lead, cybersecurity and secure information systems at STG Group, Inc. Here are his insights:

On the defense and IT side of things, network modernization will remain a top priority as the services continue to seek to achieve a resilient and efficient IT infrastructure by migrating hardware, software and services to new architectures and operations. Tangible changes include data center consolidations, JRSS, network convergence efforts, cloud migration, etc.

The challenge is dealing with a culture that continues to regard IT issues as O&M, while the modernization efforts must address the rapid pace of countering emerging cyber threats. How does a service or department synchronize network operational requirements and responses? Essentially, the old “Repairing an airplane in flight” problem? Efforts on the part of the Army have been to integrate DODIN operations into its synchronized cyber activities (see Army FM 3-12, 2017). Expect to see more of this. Elements of the IC and DHS face similar challenges.

As the 2018 NDAA appears to show increases in defense spending almost across the board, and combine this with a CRA that continues to move to the right, I expect acquisition efforts will increase dramatically. Even so, I expect M&A efforts to rise as well, as companies seek to accelerate their own growth through acquisitions, or to consolidate lines of business.

This increase in acquisition activities will aggravate the existing challenge to recruit and retain talent within the marketplace, especially those with high-value cyber, network and software skills. Within the D.C. marketplace, we have had a supply and demand problem with this skilled talent, while the dispersion of some government/defense agency centers to other less-populated areas has often made the problem even more difficult.

Both industry and government agencies compete for talent and nongovernmental industries aggravate the challenge. In response, however, industry, government and academia are responding with innovative ways of training to improve the base of talent, while recruiters are looking to new hiring practices to attract talent.

There is no doubt that success in national security is increasingly reliant on an industry/government alliance of some sort. One that fosters collaboration — from security threat sharing to technology investments — and in an environment that provides stable forecasting, timely awards and a best-value focus. Expansion in the use of OTA acquisitions could provide a pathway for rapid access to new technologies or processes.

And with the need to attract investment from industry, the government must seek to tailor its acquisition process to remain mission focused/connected and staffed with contracting professionals who appreciate their role more as a mission provider and less of a banker.

I see momentum building to consider cyber and IT support as a managed service, essentially outsourcing this support. This would have broad implications for government acquisition and mission strategies, while simultaneously influencing industry’s own business strategies.

Best advice? Embrace that the continued rapid pace of change in technology and tradecraft colors the path to success.


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