As the new decade dawns, how will government contracting change? What will be the priorities? We had the opportunity to sit down with Barry Kane, President of Catapult Technology, to ask him these questions and hear his opinion on what direction government contracting is shifting.
ExecutiveBiz: What sectors are going to be hit hardest by insourcing? Why?
Barry Kane: It's the opposite of what outsourcing was in the early 80's. It's a pretty emotional topic and there are a lot of people railing on both sides of it. I don't think it has been all worked out yet. I think there are going to be some pilot programs and the government is going to have to assess what this really means before it really moves forward. I lived through A76 both on the government side and on the contractor's side and it was just as emotionally charged back then.
ExecutiveBiz: Do you think the dialogue about OCI has changed in recent years?
I don't think we know the answer to that question yet. I think the bigger companies are going to have a much bigger problem with this. For companies the size of Catapult – $150 million and smaller – deconflicting isn't really a big issue. I think that when part of your growth model is the acquisition of other companies it becomes much more difficult to figure out where you might have entanglements and where you don't. I don't have an answer for that because it doesn't affect my business base. I think for larger companies, this is a really big issue, and the larger you are the more of an issue it becomes.
ExecutiveBiz: What are your company's top goals for the next twelve to eighteen months?
Barry Kane: We're in a period of fairly significant growth right now and a big part of our focus is to remember how we got here so we don't lose that bubble; that means paying attention to employees, paying attention to customers, enhancing the quality of services that we provide and making sure that we don't lose that as we get larger. Secondly, we are evolving from a small business into the midtier and larger business and we need to be able to compete in the full and open market. We must figure out where our real niche is. In that regard we've done things like achieving the ISO 20000 certification. There are less than 40 companies in the country that have that certification and we are hoping that will give us enough of a differentiator to make that jump. So it's really on a strategic level how to play with the big boys without losing track of how we got to be where we are.
ExecutiveBiz: Where do you hope the stimulus dollars will go?
Barry Kane: That's another question that I am going to back off from. We looked at the stimulus dollars as an uncertain source of revenue. Given that our immediate customers weren't receiving these funds in the areas we were providing support, we decided to stay clear of it. If I knew the answer to where stimulus dollars were really going, I would be a very rich man – but I don't know where that is and I'm not sure anybody does. Catapult as a company has not looked at that as a potential source of income.
ExecutiveBiz: As a new decade dawns how will government contracting look ten years from now?
Barry Kane: I think the trend has already started. The days of staff augmentation, adding people that were performing personal services (although personal services contracts aren't permitted) are numbered. Contracting is moving toward a fixed price, performance based scenario, where the contractor has to take more risk. I think that one of the rewards for doing a good job will be a longer term, a longer period of performance so the government will have the opportunity to keep the good contractors longer and not have to compete as often. Some contracts have started going this way already. Summarizing, contracting is really moving away from the model where you put people at a government site and the government is happy to direct them to a model where contractors are actually providing solutions.
ExecutiveBiz: What emerging markets will you be pursuing in 2010?
Barry Kane: We look at emerging markets in terms of customers rather than technology. In this past year, we have won work at the FBI; we have work at the State Department, Diplomatic Security Bureau; we have work at DEA. We are starting to look and feel like a law enforcement supporting organization, so an emerging market for us is the law enforcement world. Similarly we went from a very small amount of DOD work a couple of years ago to about $30 million worth next year. DOD, for us, is a market that is pretty much untapped and still emerging. And finally we anticipate deeper penetration into the markets that we already have. When you say the word emerging markets and talk technology, I tend to think of “state of the art“ focus and we are more of a “state of the market“ than “state of the art“ company. Unlike companies who are jumping on the cloud computing bandwagon (which might be a good place to be), a company of Catapult's size needs to be more diligent before investing in an emerging technology.
ExecutiveBiz: Which applications and strategies will lead IT spending in the new decade?
Barry Kane: I think this goes back to where government contracting is going. Certainly cyber security is being built into every kind of a contract we have; the focus on that cannot be overstated. Similarly there are things cloud computing, continuing expansion of VOIP and other technologies that are hot right now, but when you say the next ten years ““ who knows where technology is going? There will be a complete technology evolution there also. I think the strategy for companies will be to decide when something is mature enough to invest money in (since you want to get a piece of the market) or when it is just another great idea that might not get any legs. I do think that the government will be looking to streamline and standardize service delivery in support of their IT systems. This is where ITIL and ISO 20000 will play a bigger role ““ this goes along with the move from staff augmentation contracts to contracts with defined service level agreements and complete solutions.