Berico Technologies is among the finalists for the Northern Virginia Chamber of Commerce and Professional Services Council’s annual Greater Washington Government Contractor Awards in the Contractor of the Year category for companies up to $25 million. The winners will be announced at an awards program Nov. 5.
WashingtonExec spoke with CEO Marybeth Wootton about Berico’s success as well as the current marketplace.
WashingtonExec: How has your business been able to grow as the federal market contracts?
Wootton: Our growth over the past few years is a result of firm commitment to our strategy and staying focused on what we do best. Since we were founded, Berico has always delivered new technology and innovative analytic solutions to our customers. Throughout 2014 and 2015, the government took a big step back from funding those types of programs and we had to make a choice whether we diluted our brand and capabilities by bidding on other kinds of work. We chose to focus our investment in building technology enabled services and put more emphasis on winning prime contract vehicles. Our patience and resilience through that market period has resulted in a stronger, more robust technical capability and several prime contract vehicles.
Doubling down while other companies diluted their capabilities has allowed us to flourish under this government’s prioritization of cloud, IT modernization and new analytic capabilities.
WashingtonExec: Given today’s government contracting marketplace, how has your organization’s approach to customers, employees and future customers changed?
Wootton: The change for Berico was realizing that the federal market has finally fully aligned with our business model. Because we are a technology-enabled services company, we thrive working with customers seeking next-generation solutions, piloting new technologies and expending RDT&E funds.
Since 2017, we’ve seen a resurgence of funding and customer requirements for new federal priorities like IT modernization, cloud migration mandates, AI and machine learning — all of which are a refreshing shift from the FTE-based “status quo” of the 2014-2016 marketplace. Berico has been continuously focused on innovation, modernization and next-gen technical competencies since our founding, so the work is very gratifying for our employees and it’s exciting for our customers to be able to prioritize innovation.
For our future customers, it’s really about the immediate need that will securely propel them into the next decade or two within the federal space.
WashingtonExec: We have seen many large M&A transitions this year. Do you anticipate this will continue in the future?
Wootton: For many years, the largest companies in this market have been focused on scale and top-line growth even through the most aggressive and illogical inorganic means. More direct labor equals lower rates and better profitability without impact to senior executive cost and compensation structures. This strategy and mindset are not in the best interest of the customers or the employees. I think it would be a better trend to see companies focused on M&A that drives diverse capabilities and innovation, rather than scale alone.
While the M&A market has seen gigantic companies merging together, we are seeing parts of the customer acquisition community buying technical solutions in much smaller pieces and on shorter timelines — through BAAs, Other Transaction Authority vehicles and schedules. We see federal customers traveling to Silicon Valley to evaluate new technology and learn about innovative ideas. We have seen several customers set pricing “floors” and declare their disdain for LPTA-type contracting. These customer trends are not about size, scale or low cost — they are about quality, capability and having access to companies that can reliably deliver innovation. I’m hopeful that the M&A sector will follow with more strategic deals centered on unique and disruptive capabilities, not just headcount.
WashingtonExec: How does your organization encourage employee engagement?
Wootton: We are a very open organization without much hierarchy or bureaucracy. Given the nature of the work that we do, employee engagement and collaboration is critical. One basic element of engagement is having a fully open work space, where company executives sit in open workspaces interspersed with employee teams.
We also conduct demo days where multiple solution teams demonstrate and share ideas about the technologies they are using across different customer projects. Our engineering group sponsors hack-a-thons where developers from multiple projects can come together and work on either a common challenge or a project of their own choice. Prizes are awarded based on peers voting for the demoed results. These are some of the more fun things we do outside of the day-to-day operations.
However, the core of our management approach and the way we conduct business is based on an agile foundation. The agile process itself is highly collaborative and drives engagement on a very regular cadence daily, weekly and every two weeks. Everyone at Berico subscribes to the value of agile, and it’s a common language and set of practices across our whole team.
WashingtonExec: Have millennials entering the workforce changed your company’s strategic plans or corporate policies? If so, how?
Wootton: Berico has been a respite for millennials for several years now. The majority of our workforce is under the age of 35, and we have built policies and a culture that addresses their expectations. We moved into a new facility two years ago that has many collaboration and communal social areas. We budget for lunches, happy hours, whatever kinds of snacks and beverages the team requests. We have adopted a very flexible work schedule and work-from-home policy and prioritized getting those approvals from our customers, which isn’t always easy.
Unfortunately, we see an uptick in millennials wanting to work as 1099s, particularly with software developers. While we want to remain flexible and bring the best talent for our customers, we still seek to directly hire our best talent rather than simply contract with them. Despite this rise, Berico’s early understanding and accommodation of millennial preferences has been a bit of a competitive advantage for attracting leading technical talent in this space, and we intend to continue focusing on and investing in our staff.
WashingtonExec: How has your organization changed over the past year, and what makes you optimistic about winning GovCon Awards in your category this year?
Wootton: Berico has changed a lot over the past year. Based on the metrics, we’ve grown quite a bit, but underlying that we’ve also invested in the right infrastructure and repeatable processes to prepare for the next stage of growth. We shifted our contract mix to mainly prime contracts, which has been a great advantage in driving technical innovation and real modernization with our customers. We have achieved a very reliable, demonstrated result of delivering working software to our customers every two weeks — which seems to be an anomaly in the federal space.
I wouldn’t say we are optimistic, necessarily, about winning the GovCon Award in our category this year, mainly because we are familiar with the other finalists and they too are exceptional companies. However, we are hopeful. We are hopeful that the judges will recognize that our company has been dedicated in this space for 12 years. We have maintained a sterling reputation for doing highly innovative work and delivering impactful solutions to the most demanding mission customers. We weathered the budget downturns of a few years ago without wavering in our strategy, but that commitment has paid off.
If we were to win the GovCon Award this year, that would be a testament to all of the other entrepreneurial companies who stayed committed to innovating even when our customers were seemingly unable to invest in new capabilities. A win for Berico would be a win for all of the companies our size in this sector who strive to be more Silicon Valley than Beltway Bandit, and a testament that you can do business differently and succeed.