What were 2014's biggest stories?
Next week, I’m going to be taping a radio show hosted by Mark Amtower on FederalNewsRadio. The topic: Top stories of 2014.
So, I wanted to share my ideas and see if I can get some feedback.
Here’s my list of topics and trends that were big in 2014. They are in particular order of importance.
These actions have pretty much become standard practice. To me, this points to the struggles agencies are having with managing the contracting and bid evaluation process.
But it is still surprising to me how often we see large, high-profile contracts run into trouble. You’d think that the attention and importance contracts like NetCents, Eagle and ITES get from the market would translate into better managed procurements.
I can’t blame companies for protesting because they stand such a good chance of getting a positive outcome.
I don’t think I’ve ever heard the term “moved to the right” as often as I have in the past 12 months. Some of the delays are because of protests, but many of the delays are in the early part of the process as agencies struggle to develop requirements and structure the procurement.
We’ll have some new research out in early January that explores this more deeply, but suffice it to say that procurement delays are having an impact across the market, and it is costing companies revenue and resources.
The budget agreement that ended the shutdown last year brought a welcomed reprieve to contractors and their customers. They finally had some stability and visibility into budgets and funding after more than a year of uncertainty.
We saw a return to some normalcy. The market didn’t grow overall, but companies could make the strategic adjustments and make investments because of their customers’ funding levels.
My fear is that we’ll see a return to uncertainty as partisan battles ramp up in Congress and with the White House in 2015.
We could see history repeating itself.
Resurgence of M&A
The stability that the budget deal brought helped rekindle mergers and acquisitions as buyers had more confidence in where the market was headed.
It took a few months to take off, but the second half of this year has been active, and we’ve seen a few large deals such as Engility’s acquisition of TASC.
I expect this to continue because budgets will remain tight, and I’ve heard a lot of people talk about the overcapacity in the services sector where too many companies are chasing too few opportunities.
The Mid-term Elections
The GOP took the Senate, so now both houses of Congress are lined up against President Obama.
The results of the election set the stage for what likely will be one of the biggest stories of 2015 – the battle over the budget.
The new Congress also will likely look at other important topics such as cybersecurity, defense priorities and maybe even some substantive procurement reform. I think a lot of people are expecting some form the FITARA legislation to pass, which will give more budget authority to agency CIOs.
Open Season on Incumbents
2014 I think saw more pressure on incumbents, and many of them lost on recompetes. Several executives have told me that because of the demand for affordability, customers are more open to swapping out their contractors.
This is a double edge sword, however. It creates an opportunity for companies to gain market share by taking business away from their competitors, but they also have to be on guard for competitors trying to take business away from them.
More than ever, you can’t assume you have the inside track just because you are the incumbent.
Those are my six major stories and trends from 2014. What else should I add to my list?
When I know, I'll post the details of when the show airs.
Posted by Nick Wakeman on Dec 04, 2014 at 9:24 AM