Project 38: The Future Of Federal Contracting

DMI was born as a mobility solutions provider in 2002 and that remains a core component of its approach to digital transformation work with federal agencies.But another much faster-moving sector of the economy looms large in DMI's strategy for public sector. In this episode, DMI's chief executive Rocky Thurston explains to our Ross Wilkers what the auto industry teaches the company about taking modern technology into federal environments.Think connectivity and automation in particular when listening to Thurston describe how DMI draws lessons learned from the auto industry. DMI's overall strategy and the role of its private equity backer Oceansound Partners are also on the discussion agenda.

The rise of artificial intelligence, heightened demand for improved customer experience and the relentless pace of change are all continuing to drive the market here in 2024.In this interview with Editor Nick Wakeman, ACT-IAC's CEO David Wennergren describes both the challenges ahead for agencies and contractors, plus the for optimism.One key piece of advice from Wennergren stands out: There are many serious issues to resolve, but there are no excuses for individuals and companies not to get involved with each other and more importantly their government customers and with each other.Industry also needs to put more focus on mission outcomes. Look for opportunities to make significant changes.

Getting out the crystal ball to predict future developments is a hazardous exercise, but a first look at topics and conversations happening across the government contracting ecosystem can help in preparation.Our first episode of 2024 serves as that initial glimpse into what is important for the government market in this new year with the insights from Stephanie Smith, GovCon industry senior analyst and valuation services director at the global professional services firm RSM.Smith told our Ross Wilkers that she and her colleagues at RSM are fielding many questions from clients about the evolving interest rate environment, which touches every aspect of the economy and certainly something GovCon has to take note of.They also go over investment activity among non-traditional financing sources and the business opportunities for contractors in these three buckets: the industrial base's new CMMC cyber standard, the government's push to go green and defense on the global stage.

We live in a world where there are challenges on multiple fronts – the war in Ukraine, China and a continuing terrorist threat. Those challenges drive federal budgets and defense spending, which in turn set the tone for mergers and acquisitions.This episode has Jean Stack, co-lead of the investment bank Baird's defense and government services practice, join WT Editor Nick Wakeman to discuss how M&A activity can explain priorities and trends across the federal market and some subtle changes she sees taking place.Her outlook covers what to watch for in venture capital and private equity involvement, as well as the potential for more privately-held companies going public.

An unusual set of circumstances looms over the entire public sector landscape with two sets of federal funding slated to run out on different dates in early 2024.What those deadlines mean for government contractors is the starting point for this episode featuring David Berteau, CEO of the Professional Services Council, one of the main trade associations representing the GovCon industry.A second major signpost on GovCon's roadmap for 2024 is the Cybersecurity Maturity Model Certification, the emerging industry-wide standard for protecting information and systems. Berteau tells our Nick Wakeman and Ross Wilkers all about what contractors are looking for in the final version of CMMC's draft rule, whenever the Defense Department is ready to unveil it.The agenda for this episode also includes discussion about technology trends and the National Defense Authorization Act, a key piece of policy legislation that also helps set the tone for how contractors work with their agency customers.

A great amount of planning went into ASRC Federal's acquisitions of a supply chain and logistics business from Science Applications International Corp. and Broadleaf, an IT services firm. The transactions closed within two weeks of one another.What led ASRC Federal to those two businesses and where does it want to go next? In this episode, ASRC Federal's chief executive Jennifer Felix describes the strategy and market-wide trends behind both of those moves.In speaking with our Ross Wilkers, Felix also explains how federal agencies are working with companies like ASRC Federal to position for the future in terms of supply chain reliability and the adoption of next-generation technologies.The pace of change across the entire federal landscape is not getting slower, but the partnership between government and industry is ramping up as Felix described it.

Price and cost will always be a factor for U.S. government agencies in deciding who to choose for a contract, but not all of them just go with the lowest-bidding company for an award.How the government buyer goes about its purchasing is of equal importance to knowing what the customer is asking for, as explained in this episode featuring FedSavvy Strategies' founder and managing principal Brian Lindholm.In speaking with our Ross Wilkers, Lindholm goes over the work that business development teams can do in understanding the buyer profiles of prospective customers before starting to write proposals. That pre-bid exercise also shapes business decisions on whether to compete for a certain contract or not.

Aerospace, defense, government services and space represent four key focus areas for the private investment firm AE Industrial Partners and also cover practically all of the government market.Our guest for this episode in Kirk Konert, a partner at AEI, joined the firm at around the time it started to further scale out its investments in the mid-2010s.Konert describes to our Ross Wilkers how that approach has evolved, why AEI focuses much of its portfolio on companies that are founder-led and what the firm looks for an investment.The discussion also includes Konert's observations on what is driving private investment activity across the entire government market landscape, plus the attributes that make for successful leadership teams at companies.

Generative artificial intelligence is all the rage everywhere and those tools are being applied in multiple ways across the market, including in the proposal writing process.But even with AI's promise, its effectiveness depends on the person using the tool. Which makes AI just like any other tool we have, in that it often comes down to knowing the right questions to ask.This episode goes over many of those questions with the help of Bruce Feldman, a former senior vice president from Science Applications International Corp. who now monitors AI in his current role as a principal consultant at Lohfeld Consulting.Feldman tells WT Editor Nick Wakeman that even with his advocacy for using AI and seeing its potential, he also will warn of the shortcomings and risks.

Other Transaction Authority contracts have existed for many decades as alternative means for federal agencies to quickly bring in new technologies and systems when the usual acquisition processes will just not cut it.But the focus on speed puts artificial limits on the promise and potential of what OTAs can do when used correctly, as NSTXL’s founder and chief executive Tim Greeff tells our Ross Wilkers in this episode.Greeff leads NSTXL in its mission to manage consortia that work with agencies when they decide to run OTA processes, many of which are being used for programs of increasing size.How OTAs work and what agencies are using for are focal points of the conversation that also has the backdrop of near-peer competitions for new technologies, and not just of the international type.

The prospect of a government shutdown is far from the only budgetary headwind that agencies and contractors alike have to navigate, but it is the one that causes more anxiety than any other.Funding delays and protracted procurement cycles are also facts of life in the market that are the starting point for this episode featuring John Caucis and James Wichert, public sector analysts at the market intelligence firm Technology Business Research.Caucis and Wichert take our Ross Wilkers through how in one sense the work goes on and the budget environment looks promising for contractors on the surface, but that other factors get in the way of a more ideal picture.Also on their agenda: the competition for tech talent, merger-and-acquisition highlights, leadership transitions at some of the largest companies and what the federal market's cloud computing landscape looks like today.

More startup tech companies and investors are looking to enter the defense industrial base, which RTX is one of the largest members of and pushing to expand through its venture capital arm.How this blue chip aerospace-and-defense hardware giant is taking on the role of business and technology scouting hat is the focus of this episode featuring Dan Ateya, president and managing director of RTX Ventures.The former Raytheon Co. was a player in the venture game before its merger with United Technologies to create RTX in 2020. But as Ateya explained to our Ross Wilkers, RTX formalized the venture fund as a means to link the corporation's own innovation agenda with the Defense Department's critical technology priorities.Also on the agenda for this conversation: what happens after RTX Ventures invests in a company, why the overall innovation and investment ecosystem is growing, and Ateya's advice for how to connect with the ventures team.

The world's largest defense company also takes on the role of scout through its venture capital organization, which searches for technologies and businesses whose creations are of promise to customers and the industry.But those investments are just the first step in what Lockheed Martin and those companies are looking to achieve together as explained in this episode by Chris Moran, executive director and general manager of Lockheed Martin Ventures.What happens after the capital is committed from the fund? Moran tells our Ross Wilkers that the post-investment relationship has been a focus area for the ventures team with new staff on-board after the fund doubled in size one year ago.How does the startup ecosystem that Lockheed Martin Ventures taps into really operate? Moran saw it up-close during his time as a Silicon Valley executive and leans on that experience in his answer, which also includes perspective on why more startups are entering the defense market.

Amentum's identity as an engineering and technical services provider naturally places the company at the front end of many large-scale efforts by government customers to incorporate new technologies.Where the federal government's second-largest services provider is concentrating its time and resources in technology is the focus of this episode featuring Jill Bruning -- president of Amentum's engineering science and technology group.Bruning explains to our Ross Wilkers that much of Amentum's tech focus centers on the front end: so think of work like research, development and testing of advanced systems.The conversation also works its way to hypersonics and counter-unmanned aerial systems, two areas that Bruning sees as being like most technologies: on an accelerated development cycle that means today's inventions can often get quickly outpaced by tomorrow's.

Cybersecurity started to evolve into an enabling technology area more than a decade ago, which means today it is in the core of what government technology companies do for federal agencies.Dr. Sarbari Gupta founded Electrosoft in 2001 to focus on helping agencies with their own postures in cyber, the evolution of which she describes in this episode that also goes over what the government is asking of industry in today's cyber landscape.Gupta explains how companies such as hers have carried out their own cyber practices and cultures amid the emergence of standards like CMMC as the final rule is in-the-works for that particular program.She also shares her lessons learned along the way on growth, entrepreneurship and industry teaming as a small business founder.Click here to watch Gupta's Ted Talk that was discussed in this episode.

IBM showed its prioritization of public sector and federal markets through its $1.2 billion acquisition of Octo Consulting, which closed in the spring and is the largest such transaction in the history of Big Blue's consulting business.This episode features an update on the integration and where that combination fits into IBM's larger, global vision for itself. The guests are Susan Wedge, managing partner for the U.S. public and federal market at IBM Consulting; and Mark Johnson, vice president of technology for the U.S. federal market at IBM.One way IBM characterizes that vision is in its push to make a bigger impact for its clients, including those in U.S. government. Wedge and Johnson explain what that means and how they see the combined IBM-and-Octo team contributing to Big Blue's larger strategy and vision that centers around artificial intelligence and hybrid cloud computing.IBM ranked at spot No. 28 on our 2023 Top 100.

Some truth exists in the often-repeated statement that the government market has some resilience to pressures from the global economy, but companies do still have to deal with them.How contractors are navigating a world of inflation and higher interest rates is the launch pad of this episode featuring Ruth Ann Clark, managing director for aerospace, defense and government services at JPMorgan Chase Commercial Banking; and Don Irwin, managing director and banker team leader at J.P. Morgan Private Bank.Unlike other markets, GovCon has the unique fabric of how its singular customer set buys and adopts technology and that shapes how companies position themselves to win contracts.Clark and Irwin share their perspectives on how companies are deciding which tech domains to focus on, plus where the middle-tier contractor fits in today's market landscape that often looks like a barbell shape between small businesses and large multibillion-dollar corporations.

With a new majority owner and chief executive in place, Empower AI is embarking on a new approach in its push to be a leading provider of artificial intelligence tools in the federal landscape.The path Empower AI has mapped out for itself is the focus of this episode featuring Jeff Bohling, who was named chief executive in February as the global investor KKR took majority ownership of the company.Empower AI is starting to talk about itself more as a solutions-oriented business versus one focused on making products, a shift Bohling describes as giving the company greater focus and alignment with how agencies are looking to buy AI.ChatGPT featured prominently in this conversation. Bohling shares his perspective on what that technology has done to the overall AI dialogue, and how his time as cofounder and owner of a restaurant informs him in this current role.

Deloitte's identity as a global professional services firm means it looks to be more than just a provider of advisory support for its clients and particularly with federal agencies.Jason Salzetti, who leads Deloitte's government and public services practice, explains in this episode how that 26,000-employee team is working with its federal clients today on navigating the increasing speeds and rates of change with technology and how they operate.A big component of that approach means Deloitte looks to be at the intersection of implementation, integration and consulting. Salzetti goes over how Deloitte does that and why he sees federal clients now thinking differently about risk when it comes to innovation.Other topics on the agenda included how the "GPS" team will work with Deloitte's space practice, and Salzetti's perspectives on human capital macrotrends his colleagues at the Deloitte Center for Government Insights studied.Deloitte ranked at No. 15 on our 2023 Top 100.

BAE Systems' U.S. subsidiary has made working well with others across the government and commercial technology landscapes a core part of its strategy and story to tell as a federal systems integrator.Peder Jungck, vice president and general manager for intelligence solutions at BAE Systems Inc.'s intelligence and security segment, knows both of those worlds well given he was chief executive of a cybersecurity company that became a government contractor in the early 2000s.As Jungck explains in this episode, knowing the market will be disrupted and where said disruption is coming from means his business is off to a good start. Jungck and our Ross Wilkers also go over today's role of the federal integrator, data management trends across government and what the I&S business is up to in working with BAE's Fast Labs advanced research team.BAE Systems Inc. ranked No. 24 on our 2023 Top 100.