Contractors saw a year of uncertainty and challenges, but there's relief that it wasn't worse.
If there was one word that executives commonly used to characterize the government’s fiscal 2011, it would be uncertainty. But they’re not complaining.
“I wouldn’t necessarily use a term like frenetic,” said Mike Wilson, president of ITT Information Systems, when asked to label fiscal 2011. “I would say cautious because we’re in a period of uncertainty.”
“It was not a terrible year, but there was definitely some budget pressure and some competitive pressure,” Wilson said.
“The doom and gloom is always overamplified because the mission requirements aren’t changing that much. I think the intensity of the spotlight on a premium on performance is not going to change,” he said.
“Through the first half of 2011, our business continued to grow,” said Randall Wotring, president of URS Corp.'s federal services. “That’s not new news. I believe that all the federal service providers are claiming the same thing.”
Despite what he called the budget uncertainties, the delays caused by the continuing resolutions (CRs) and the debt-ceiling flap, URS Corp. had a good year overall, Wotring said.
“It’s the uncertainty of what’s going on and not having a clear line of sight into how the budget issues get resolved,” said Kevin Parker, president and CEO of Deltek Inc., a provider of enterprise software and information solutions to government contractors.
“We’re seeing a variety of reactions,” he said. “We know of some customers that have had very successful years. And if they’re in the right agency with the right contract vehicle, they feel pretty good about their prospects for the future. On other occasions, people have lost contracts or contracts have been delayed and they’re feeling a great deal of pressure.”
“I think people would really appreciate some certainty and some direction so they’d know how to plan,” he said.
That also applies to government agencies where the emphasis on insourcing waned in fiscal 2011. “Particularly with the budget uncertainty, they’re not as aggressively bringing people upstream into the agencies as they were historically,” he said.
CEO Joe Moye of Capgemini Government Services, a relative newcomer to the federal market, said his company grew but faced challenges .
“We’ll do shy of $70 million in [government] revenue this year. We started from a base of $20 million two years ago so we’ve grown pretty substantially,” said Moye.
Nevertheless, he called fiscal 2011 a difficult year. “It was difficult in the sense that we’re not achieving the growth we had hoped, but we’ve still grown 25 percent,” he said.
Moye said the congressional battles over the continuing resolutions had more of a negative effect on the company’s bottom line than the budget constraints did because “when you’re in growth mode versus sustain mode, we didn’t have all the contracts that were just going to continue to feed us. So it hurt our growth a little bit.”
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