Charles Lyons-Burt
Adam Harrison joined Amentum after the completion of the PAE acquisition in 2022. Prior to Amentum, he was appointed to PAE’s leadership team just as the company was going public in early 2020. As head of strategy and corporate development for PAE, Harrison oversaw the company’s growth strategy in addition to helping lead PAE’s acquisitions of two companies, Centra Technologies and METIS Solutions, during the height of the pandemic in late 2020. The following year, he supported PAE on the $1.9B sale of the company to Amentum.
Before his time at PAE, Adam spent nearly a decade advising aerospace-, defense- and government services-focused clients on corporate strategy, market research and mergers and acquisitions.
Harrison began his career in Lockheed Martin’s leadership development program, where his roles and responsibilities included program management, strategy, corporate planning, pricing and capture management.
This month, Harrison sat down with ExecutiveBiz for a Spotlight interview, where he discussed the differences in the market from the early 2000s to now, major trends in modernization and their impact on GovCon, how Amentum’s new organization gives them a leg up in growth and expansion and more.
How has GovCon changed since you began your career, and what’s your take on the market now?
We sometimes quickly forget that the government services market, in its current format of large sector participants, has only been around since the early 1990s. I started my career a little over a decade later and it still looked very different than it does now. The industrial base, size and structure is very different today than it was in the mid- to late-2000s. Back then, the largest company in the market might have been $4 or $5 billon dollars in revenue and today we are approaching companies close to $15 billion in size. You also had a lot of mid-tier private and publicly traded companies that were in the $500 million to $1 billion range. And now you have on the supply side what I call a barbell effect, where there are a few very large companies, and then a lot of small businesses, but there aren’t many companies in the middle. Private equity has done a great job of buying companies and combining them to reform and reshape the mid-tier landscape in the market, but it’s still not at its previous levels from early- to mid-2000s.
It’s also important to realize that not only have many of companies changed in size over the last ~20 years, but their focus, competencies and brand have evolved as the government services market has matured and grown.
Amentum itself has doubled in size in the last two years. And while we are the same company at heart, we are a stronger version, a 2.0. We have evolved to leverage our tremendous scale, global reach, and breadth of capabilities to grow in adjacent and emerging markets. And even though we’re bigger, we have an agile business model with a unique ability to quickly scale operations — we can perform at mission speed. We have leadership positions across defense, environment and energy, national security, development and infrastructure markets — and now we are placing our focus on modernizing these missions. We’ve grown to have an even more diverse customer base and a vast diversity of skills and people. And now, Amentum has transformed into an engineering and modernization solutions company that integrates an ecosystem of technology investments and partners that we use to deliver value to our customers.
What’s your outlook on the government services market?
As we sit here in the beginning days of 2023, there are major tectonic shifts that are likely going to create significant changes in the government services market as we move forward over the next several years. This clear focus on modernization is at the forefront of everyday conversation about the market given the quick revival of great-power competition coupled with growing concerns of aging platforms, systems, infrastructure, and workforce.
With that, I’d say the outlook on the government services market is sustainable and strong in the foreseeable future. Discretionary budgetary tailwinds and clear focus on modernization will create a lot of opportunities in the market as we move forward. I think when we think modernization in the GovCon or government services market, we automatically think of IT modernization given the constant chatter and press on cloud and cyber. However, it’s not necessarily just an IT thing — modernization is expansive across almost every segment and customer in the federal government market today. Whether it’s infrastructure, clean energy, engineering, autonomous solutions, intelligence analytics, etc., these all are going to be instrumental in modernizing tomorrow’s missions across the federal government.
For Amentum, we are focused across a variety of prioritized modernization areas for our customers. One example is autonomous systems, such as UAVs and countering the threats from these unmanned systems. Another market area is model-based systems engineering, creating digital twins to run simulations for training and upgrades. We see augmented and virtual reality capabilities as a trend to deliver synthetic training environments, and predictive analytics in maintenance, infrastructure management and smart supply chain.
What’s the most impactful trend you’re currently seeing in the GovCon market? How are you seeing the industry respond to that trend?
Again, it really comes back to modernization. We’ve been talking about modernization for a while, and now we are seeing the momentum and the light at the end of the tunnel when it comes to this topic. Overall budgets and specifically research, development, testing and evaluation and procurement related accounts have created strong tailwinds for this modernization push and I don’t expect it to slow down at least in the near-term.
At Amentum, we have seen a significant increase in velocity and volume of “new-new,” or novel requirements from our customers. Our business development and capture teams have been spending a lot of time responding to these requests for proposal related to engineering and integration of a variety of next generational technologies and solutions, not just for the Department of Defense but more broadly across the entire federal government.
You’re also seeing the standup of several relatively new government organizations like DoD’s DIU and Office of Strategic Capital that have been placed to bring in these new and emerging technologies given the geopolitical threats and importance of maintaining our competitive advantage as a nation.
It has been interesting to watch how the industry has responded to these recent changes. Some companies in the market are really focused on picking their niches given their finite amount of internal resources, while others have been more active using resources externally, whether it’s mergers and acquisitions or venture capital-like funding to invest in a specific capability or technology.
At Amentum, we believe our history and being recognized by our customer as the leader in global engineering, project management and solutions integration on complex programs of significant importance for the U.S. government puts us in a great position to help with this modernization focus.
We have the longstanding relationship supporting the mission across almost every major customer in the federal government providing the base to bring emerging technologies and commercial applications into the GovCon marketplace. We excel at partnering and integrating with best-in-class technologies to bring safer, smarter, cleaner solutions to our customers. Our customers are very receptive to innovations that maximize both effectiveness and efficiency, and Amentum is always evaluating the marketplace for deals that compliment and expand our capabilities. Our new tagline, “solving what’s next,” really encapsulates not only our legacy, but also our continued dedication to bring the innovation and solutions for tomorrow.
And it’s important to think about modernization not just in terms of platforms and systems, but also in the form of human capital and the future of the workforce. At Amentum, we have made it a priority to invest in our next generation of professionals. I recently took on the role of executive sponsor for Amentum’s NextGen Employee Resource Network, an affinity group we recently created to focus on our younger employees and recruiting, developing and retaining our workforce for the next generation. Great employees are the most important asset we have, and it’s imperative that we bring in and develop the best talent to accomplish our modernization objectives.
Where are you seeing opportunities for expansion in your company’s portfolio? What new capabilities or markets are you eyeing?
When I onboarded in March of 2022, I helped with restructuring the company for growth. We split our portfolio into three business groups to leverage their strengths in leading each of their addressable market spaces.
Our engineering, science and technology group drives the modernization of our core competencies. It takes our business of today and evolves it for the future. In this group, we’re working on RDT&E, MBSE and digital twin, naval engineering, C5ISR, autonomy and unmanned systems solutions. The ES&T team is focused on markets in engineering modernization to maintain our nation’s competitive edge, science that develops capabilities for government’s next generational priorities and technology that makes our federal customers more effective and efficient.
Our national security group continues our leadership and expansion into highly specialized markets such as nuclear operations, environmental remediation, energy sustainability and intelligence analytics. We see huge market opportunities in renewables with government initiatives around climate change, and also in the intelligence community given the geopolitical environment.
Our critical missions group focuses on keeping and expanding our leadership position in our core, mission-related work. Our goal is to build through position, scale, speed and talent in the areas of infrastructure, readiness and sustainment, international development, space operations, supply chain and test and training. We see market opportunities in virtual training and augmented reality, predictive analytics, smart supply chain and innovations through smart tools and applications.
The reorganization into three business groups helps us clearly define our market segments while enabling us to create and execute a focused strategy at the operating group level. Additionally, all three business group strategies are 100 percent focused on contributing to making the world safer, smarter and cleaner. Amentum is a trusted leader to help the government modernize the most critical missions anywhere in the world today and in the future. We are very excited about what the future holds for Amentum as we move into the next phase of the company.
