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By now you’ve had your fill of top 10 lists for 2010. But this is one list you don’t want to miss. What will 2010 hold for Government Contracting? What shape will collaboration take between industry and government in addressing the tough issues of the day? ExecutiveBiz brought that question to top industry leaders. Here’s what they’re saying:
1.) Industry More Competitor with Government
Norm Augustine’s 2010 Prediction:
“The issues facing the nation and the world increasingly transcend the ability of either government or industry to solve alone. For example, the government clearly has overall responsibility for homeland security, yet 90 percent of the assets to be protected currently reside in the private sector.
“At the same time, as the federal debt grows along with the non-discretionary part of the federal budget, heightening fiscal pressures will be placed on the procurement process. As a consequence, industry is unfortunately likely to find itself more and more a competitor with government than a partner … with proven bad ideas rising from the ashes yet another time (e.g., fixed price research and development contracting). The problem will be exacerbated by the inability/unwillingness of qualified individuals with industry experience to serve terms in government.
“As one who has spent a significant part of his professional life in each government and industry, I truly hope the above is wrong but that would not be how I would bet.“
(Norm Augustine is retired Chairman and CEO, Lockheed Martin Corp.)
2.) More Contracts related to the ‘Battlefield of the Future’
Paul Cofoni’s 2010 Prediction:
“CACI expects intelligence to be a mainstay of growth in 2010 and beyond. In addition, CACI is bidding for millions of dollars in cyber security contracts, as awareness of this kind of threat grows. C4ISR technology is also one of CACI’s strengths, and the company expects to see more contracts related to the ‘battlefield of the future,’ helping to guide and protect the warfighter and target the enemy on the battlefield.
“Going forward, our domestic operations are solidly positioned in the well-funded and high-priority areas of defense, intelligence, homeland security, and IT modernization. We remain agile in responding to market changes and aligned with the administration’s priorities in cyber security, smart power, and IT modernization.
“Many experts predict that non-defense government spending will grow faster than defense spending in coming years, and government contractors can meet those demands by offering new services in sectors like healthcare logistics, energy IT and IT modernization. Still, national security remains at the top of our government’s greatest challenges, and we will continue to concentrate our resources to help our clients preserve the freedom and liberty of our nation’s citizens while expanding to meet new areas of demand.
“National security remains at the top of our government’s greatest challenges, and we will continue to concentrate our resources to help our government and our clients preserve the freedom and liberty of our nation’s citizens. Even with multiple domestic issues facing our country, we cannot lose sight of ever-increasing threats from determined, persistent, and well-resourced terrorist organizations. There is no margin for error in our national security posture.
“Our recent record results for both the quarter and the year validate our strategy to focus our solutions in the well-funded and critical areas of defense, intelligence, homeland security, and IT modernization. strong performance in CACI’s U.S. operations.
“We anticipate continued demand for our proven solutions to keep our nation safe and implement efficient and cost-effective solutions to modernize federal agencies. We are positioned to expand our capabilities in defense healthcare logistics and IT modernization and address new opportunities in cyber security, smart power, and energy. We also expect to see continued growth in our highly profitable U.K. operations, including greater penetration into the public sector.”
(Paul Cofoni is President and CEO, CACI)
3.) Government-Industry Collaboration will be robust
Renny DiPentima’s 2010 Prediction:
“Government contracting will continue to be robust over the next decade, just as it has been over the previous five decades. A responsible and collaborative business relationship between government and industry benefits both. Government depends upon contractors in large part to get its jobs done and contractors depend upon government to keep their companies financially sound. This government-contractor relationship, more than ever, will depend upon mutual respect and trust and performance from both parties that delivers results.
“Effective, responsive collaboration [between government and industry] will require a clear understanding and expression of requirements on the part of government, effective and efficient solutions from industry that deliver results, and a working relationship based on trust and respect on the part of both. The collaboration must be characterized as a constant flow of communications between both government and industry at all phases of their work, from pre-solicitation exchange of ideas, to appropriate dialogue to truly understand the government’s requirements, to a clear articulation and demonstration of the solutions proposed by industry. Collaboration based on open communications, trust, and respect is essential to the success of solving any of the tough issues ahead.”
(Renny DiPentima is former president and CEO of SRA)
4.) Business Models Must Accommodate More For Less
Jacques Gansler’s 2010 Prediction:
“I think the key point of the next decade is going to be the budget crunch combined with, from the defense side, the huge spectrum of potential concerns on the security basis: pirates, terrorism, regional conflict, insurgence, possible future peer competitors, nuclear deterrence and that whole huge spectrum. In that environment we have to figure out ways to get more for less … and the models for getting more for less changes the business environment.”
(Jacques Gansler, former Under Secretary of Defense for Acquisition, Technology, and Logistics, is now a professor at the University of Maryland’s School of Public Affairs.)
5.) Government Will Expect More Secure Offerings from Industry
Melissa Hathaway’s 2010 Prediction:
“The need for partnership between industry and government will increase over the next decade especially as our enterprises become further interconnected due to our dependence on information technology. The seams between private networks and government networks will continue to blur and it will be harder to know where one ends and the other begins.
“We must work to understand the full extent of the vulnerabilities and interdependencies of our enterprises because our opponents are exploiting these seams and stealing our sensitive and proprietary information at an unprecedented volume. This requires industry and government to share details on vulnerabilities of and security threats to our infrastructures and information assets. Industry will need to provide a stronger service offering of security testing of networks to lower our collective exposure. Additionally, I expect that the government will demand from industry more secure software products and services. I am hopeful that the next decade will bring greater transparency and willingness to share information among and between enterprises so that, in partnership, we can raise our collective security posture.”
(Melissa Hathaway is President of Hathaway Global Strategies, LLC and Senior Advisor at Harvard Kennedy School’s Belfer Center)
6.) Another Year of Confidence Re-Building
Bill Hoover’s 2010 Prediction:
“2010 will be another year of caution and confidence rebuilding. Concerns about the deficit will influence both the government“™s and citizens“™ priorities and actions. National security and citizen safety remain the top priorities of government. Government services sector will continue to be the nation“™s ‘anchor to windward.'”
(Bill Hoover is President and CEO of AMERICAN SYSTEMS)
7.) Year of Positive Trends and Challenges Ahead
Linda Mills’ 2010 Prediction:
“Government contracting is seeing some very positive trends and some challenges that the industry and government together will have to work to overcome in the next decade. Some of the positives we are seeing in legislative and policy trends include increased use of IDIQ contracts, Secretary Gates push towards 75 percent solutions, and spiral developments. At the same time, however, industry continues to face a move toward fixed price development contracts, long procurement cycles, continued protests, and insourcing.
“Northrop Grumman acted quickly and responsibly to comply with another positive trend, the tightening of the OCI policy. The key to go-forward success is consistent and clear communication with the contracting community and consistent application of these policies across government. Going into the new decade, we expect the government will uniformly enforce these new OCI regulations.
“Collaboration between government and industry will remain important in the next decade. Most tough issues require government legislative and policy changes before real progress can occur.”
(Linda Mills is Corporate Vice President and President, Northrop Grumman Information Systems)
8.) Cyber Czar, Bid Protests Key Issues to Watch
Stan Sloane’s 2010 Prediction:
“The new cyber czar will start to grapple with the challenges he’s taking on, and we’ll see some progress on the policy front, as well as collaboration with industry on intellectual property protection.
“There will be growing dissatisfaction with the bid protest mess, and we will start to see reform in the way of penalties for companies which abuse the process.
(May be a wish versus a prediction!)
(STAN SLOANE is President and CEO of SRA)
9.) Year of Modest Growth, Productivity Gains for GovCon Sector
Ralph Shrader’s 2010 Prediction:
“I’m cautiously optimistic that 2010 will be a year of modest growth and productivity gains for the economy as a whole, and for the government contracting sector. The most important challenges of the 21st century are the business of government “” from national defense and economic security “” to health, citizen services, and international development. While government officials clearly need to set policy, be in command, and carry out inherently governmental functions, the biggest challenges can’t be solved by government alone, so collaboration with industry is critical. Industry teammates bring innovation, specialized expertise, and value that helps win the peace and prosperity that citizens want and expect from government.
“Collaboration begins with respect. Government contractors must recognize that the mission of our nation and acceptance of taxpayer dollars is a sacred trust. The government, in turn, needs to respect the real value and patriotic commitment of the contractor community. Industry and government are on the same team, facing the same challenges, working toward the same goals. If all sides can embrace this point of view, the year and decade ahead will be among the most successful in history.”
(Ralph Shrader is Chairman, CEO, and President, Booz Allen Hamilton)
10.) Time for Fundamental Review is Now
David Walker’s 2010 Prediction:
“The federal government needs to engage in a fundamental review and re-engineering of what it does, how it does business and who does its business in the coming decade. This includes the need to address the 15 or so long standing and systemic acquisition and contracting challenges identified by the GAO. Successfully addressing these challenges will benefit both the country and taxpayers.”
(David Walker is president and CEO of the Peter G. Peterson Foundation)
