WT 360: The market from all angles

BlueHalo as the market knows it today is around four years old with a strategy centered around space, cyber, directed energy and other key tech priority areas for the U.S. military and allied forces. Now the defense technology integrator is joining forces with another like it that has the same private equity owner in Arlington Capital Partners. In this episode, BlueHalo's chief executive Jonathan Moneymaker explains the decision to combine with Eqlipse Technologies and the overall demand landscape that is behind the move. "Transforming the Future of Global Defense" is the tagline all over BlueHalo's website and other promotional materials, and one Moneymaker spoke to us about in 2021 early on in the journey. Moneymaker returns now to tell our Ross Wilkers about what that transformation looks like here in 2024 and shares some first-hand anecdotes of how he has seen it. This is episode two in our 2024 series on mergers and acquisitions across the government market. BlueHalo to combine with Eqlipse Technologies PROJECT 38: BlueHalo's strategy for transforming modern warfare Private equity drives high transaction volume in 2023 2024 M&A Round Up WT 360: All about Guidehouse's vision to be a 'next-generation consultancy'

Guidehouse was owned by one of the government market's most active private equity firms in Veritas Capital until its December sale to one of the investment world's cornerstone names. In this episode, Guidehouse's chief executive Scott McIntyre describes the blueprint laid out by the company and its new owners Bain Capital with respect to what's next and how they plan to get there. A bulk of that can be seen in how Guidehouse has adopted this approach for itself – "Building our next-generation consultancy." McIntyre explains what that means to our Ross Wilkers, plus how consulting is now much more than just providing clients advice, and the ways Guidehouse works with customers that are regulators and among the regulated. This is episode one in our 2024 series on mergers and acquisitions across the government market. Private equity drives high transaction volume in 2023 2024 M&A Round Up Guidehouse to get a more global private equity owner

Google's cloud environment now has license to host secret and top secret data, which is a must-have for the company in its pursuit of large opportunities at defense and intelligence agencies especially. Frank Konkel, editor-in-chief for GovExec's publications including us, had a front-row seat to that announcement and at Google's flagship cloud conference April 9-11 in Las Vegas. In this episode, Frank joins our Nick Wakeman and Ross Wilkers to explain what Google's receipt of that key security authorization means for both the tech giant itself and the larger cloud computing landscape with respect to federal. Google had much to share at its Cloud Next conference and Frank had much to talk about with key government and industry leaders there: conversations on all things cloud and artificial intelligence that he provides a glimpse into for Nick and Ross. Google is now authorized to host classified data in the cloud Google Public Sector ‘hitting our stride’ in government market, CEO says Google centers public sector strategy on alliances with integrators Google Bets Big on Government Business with New Division Pentagon Awards $9B Cloud Contract to Amazon, Google, Microsoft, Oracle CIA makes awards for intelligence community's next massive cloud contract

Once passed and signed into law, the National Defense Authorization Act lays out the Pentagon's policy priorities and dictates how and where its appropriated funds are to be used. The NDAA also functions as a roadmap for companies to shape their business strategies as explained in this episode featuring Luis Avila and Stephanie Smith, government contracting market analysts at RSM. Avila and Smith take our Ross Wilkers through some key signposts of the legislation that they believe contractors should take particular note of. Procurement, the industry's pool of participants, supply chains, data rights and artificial intelligence are on the discussion agenda. This fiscal year's NDAA comes out to around 3,100 pages, but as Avila and Smith explain: doing the homework on what is in the law helps contractors know their customer before it's time to pursue the contract.

The Defense Department has a new industrial cybersecurity strategy in place to help contractors improve their data and network security postures with a particular focus on small businesses. DOD's emphasis on cyber through that strategy and beyond is an ongoing storyline that Lauren Williams stays on top of for Defense One, a sibling publication of Washington Technology. For this episode, Lauren explains the vision and goals of that new strategy in conversation with our Ross Wilkers. Lauren also provides a snapshot of what she found in the Army Applications Lab -- a technology incubator that the service branch stood up in 2019 to grow the network of startups it works with. The Pentagon wants to help boost cybersecurity for small contractors Meet the Army’s tech incubator

It definitely feels like the tide is turning against noncompete agreements across the country: five states ban them outright, while many others have restrictions on when they can be enforced and on whom. The Federal Trade Commission's effort to make these pacts illegal in the U.S. has a long runway ahead of it before becoming official, but is still a move that the government contracting ecosystem should take note of as it unfolds. In this episode, attorneys Marlena Ewald and Grace Williams of the national security-focused law firm Fluet explain the bigger economic-wide picture of the FTC's push to ban noncompetes and then take the conversation to GovCon. Both attorneys told our Ross Wilkers that questions about what this already means and could mean for the employer-employee relationship are starting to come up, so they provide some answers to them here. They also provide some key signposts to watch as the FTC's effort progresses. The Proposed Nationwide Ban on Non-Competition Agreements by the Federal Trade Commission Will the FTC Finalize a Complete Ban on Noncompetes? Noncompete agreements explained

The federal government has several large technology initiatives underway such as improving customer experience and leveraging artificial intelligence. Those issues are at the heart of what Natalie Alms writes about for NextGov/FCW, one of several sibling publications for Washington Technology. She dives into those topics and more in this conversation with WT Editor Nick Wakeman. From her perch, Natalie has a unique perspective on the challenges agencies face in trying to modernize how they provide services to citizens. She explains that while AI holds great promise to improve how the government operates, there are also many hurdles to clear. Related articles: IRS touts launch of Direct File pilot White House stalls on digital identity mandate, despite billions in fraud Experts warn that OMB’s AI guidance could slow federal adoption of the emerging tech On the heels of Biden's executive order, agencies get White House directive on implementing AI The CX executive order turns one

The final Cybersecurity Maturity Model Certification rule is still months or maybe even a full year away, but the heart of rule will not change: standard 800-171 from the National Institute of Standards and Technology. In this episode, Fortinet's federal chief technology officer Felipe Fernandez tells Editor Nick Wakeman that companies should focus their efforts around the standard shaping the rule regardless of how CMMC evolves. Companies have checklists and questionnaires available to them for use before they go through a third-party assessment. For those that prepare early, there may be an opportunity to separate themselves from competitors. Fernandez shares insights on that preparation and more as he and Wakeman dive into CMMC as it moves through the rulemaking process.

Rebrandings are a constant in the government market and the company now known as Everfox is the newest example of that after its acquisition by one of the world's largest investment firms. The cybersecurity business formerly known as Forcepoint Federal, and before that as Websense, now exclusively focuses on global government and critical infrastructure clients as a portfolio company of TPG. In this episode, Everfox's chief executive Sean Berg goes over some of the 700-employee company's investment priorities and the overall cyber landscape's current state of play. Everfox has two decades of history behind it and to say that cyber has changed over that timeframe would be an understatement, but the emergence of nation-state actors is one of the trends Berg explains to our Ross Wilkers. Also on their agenda: the new name itself of course, commonalities between Everfox's government and critical infrastructure customers, how and where the company plans to grow its talent base.

LMI was chartered during the Kennedy administration in 1961 as a provider of logistics management services and research to the federal government, work that remains core to the firm's vision and strategy. That has not changed for LMI, but its change in 2022 from being a nonprofit to for-profit appears significant on the surface. In this episode, LMI's chief executive Doug Wagoner explains the rationale for making that shift and who the investors in the company are. Of course, the conversation between Wagoner and our Ross Wilkers works its way toward what LMI plans to do with its private capital backing. LMI now has more resources for acquisitions and support for its continued push to lead in logistics, an area that has become paramount for federal agencies in light of all that has happened to supply chains during the past three years.

The presence of private equity firms continues to grow in the government market because as Zach Hester says in this conversation with Editor Nick Wakeman: “It just works." Plain and simple. Most of the largest companies in the market have used acquisitions as a catalyst for organic growth. But according to Hester, the director of merger and acquisition strategy and deal generation at Bluestone Investment Partners, there are plenty of opportunities for the small and midsized players to be active in M&A as well. Hester says the critical element a mission focus and using that to drive your acquisition choices. Buyers can add capabilities, talent and broaden your depth. It can send a signal to customers that you can take on larger opportunities. The volume of deals may ebb and flow from year to year, but there is little doubt that M&A has become a powerful force.

SMX can trace its history back to 1995 and that timeline includes the name Smartronix, a marker represented in the current name that seeks to balance recognizing history with continuous evolution. Digital transformation remains the core focal point of the new SMX's strategy and a main topic of this episode featuring chief executive Peter LaMontagne, who joined in 2020 as OceanSound Partners acquired the business. LaMontagne also shared with our Ross Wilkers his view on what private equity investors like OceanSound do for the government market's middle tier and how SMX defines digital transformation for its strategy. As LaMontagne sees things, cloud computing is absolutely part of that but far from exclusive to it. The conversation closes with LaMontagne's perspectives on the Pentagon's National Defense Industrial Strategy and what companies should do to make it a success.

Multiple-award contract vehicles are where a majority of the government's buying activity seems to take place these days, but the "Rule of Two" that tells agencies how to work with small businesses did not apply there. The White House has started to work on changing that through a Jan. 31 memo that tells agencies to use that golden rule of government contracting for multiple-award vehicles and their task order business. What that means for small businesses is the focal point of this episode featuring Stephen Bacon, government contracts attorney at the law firm Rogers Joseph O'Donnell. Bacon tells our Ross Wilkers all about what the memo does and doesn't do, plus what comes next for the directive to become final and how small businesses can use it as an informational tool for their customers. These links below have more on the Rule of Two expansion memo: Stephen Bacon on LinkedIn: OFPP Memo Small Business Participation on MACs GovCon's 'rule of two' is about to widen in scope

The Cybersecurity Maturity Model Certification regulation may not be final for at least another year, but the Defense Department has been running a voluntary program for companies to go through a third-party assessment. That test looks at how compliant companies are with the standards at the heart of CMMC, which will formalize how contractors should protect controlled unclassified information in their systems. This episode features Editor Nick Wakeman's conversation with Derek Kernus, director of cybersecurity operations at professional services firm DTS, who explains how his company became compliant with the National Institute of Standards and Technology's 800-171 standard that is the basis for CMMC. Kernus led DTS and one of its clients, IVA’AL, through DOD’s Joint Surveillance Voluntary Assessment program that measures their processes against the NIST standard. DTS and IVA'AL got perfect scores and that will get them an automatic CMMC Level 2 certification when the rule goes into effect, probably in early 2025. Kernus shares what they went through, what they learned and what comes next.

DMI was born as a mobility solutions provider in 2002 and that remains a core component of its approach to digital transformation work with federal agencies. But another much faster-moving sector of the economy looms large in DMI's strategy for public sector. In this episode, DMI's chief executive Rocky Thurston explains to our Ross Wilkers what the auto industry teaches the company about taking modern technology into federal environments. Think connectivity and automation in particular when listening to Thurston describe how DMI draws lessons learned from the auto industry. DMI's overall strategy and the role of its private equity backer Oceansound Partners are also on the discussion agenda.

The rise of artificial intelligence, heightened demand for improved customer experience and the relentless pace of change are all continuing to drive the market here in 2024. In this interview with Editor Nick Wakeman, ACT-IAC's CEO David Wennergren describes both the challenges ahead for agencies and contractors, plus the for optimism. One key piece of advice from Wennergren stands out: There are many serious issues to resolve, but there are no excuses for individuals and companies not to get involved with each other and more importantly their government customers and with each other. Industry also needs to put more focus on mission outcomes. Look for opportunities to make significant changes.

Getting out the crystal ball to predict future developments is a hazardous exercise, but a first look at topics and conversations happening across the government contracting ecosystem can help in preparation. Our first episode of 2024 serves as that initial glimpse into what is important for the government market in this new year with the insights from Stephanie Smith, GovCon industry senior analyst and valuation services director at the global professional services firm RSM. Smith told our Ross Wilkers that she and her colleagues at RSM are fielding many questions from clients about the evolving interest rate environment, which touches every aspect of the economy and certainly something GovCon has to take note of. They also go over investment activity among non-traditional financing sources and the business opportunities for contractors in these three buckets: the industrial base's new CMMC cyber standard, the government's push to go green and defense on the global stage.

We live in a world where there are challenges on multiple fronts – the war in Ukraine, China and a continuing terrorist threat. Those challenges drive federal budgets and defense spending, which in turn set the tone for mergers and acquisitions. This episode has Jean Stack, co-lead of the investment bank Baird's defense and government services practice, join WT Editor Nick Wakeman to discuss how M&A activity can explain priorities and trends across the federal market and some subtle changes she sees taking place. Her outlook covers what to watch for in venture capital and private equity involvement, as well as the potential for more privately-held companies going public.

An unusual set of circumstances looms over the entire public sector landscape with two sets of federal funding slated to run out on different dates in early 2024. What those deadlines mean for government contractors is the starting point for this episode featuring David Berteau, CEO of the Professional Services Council, one of the main trade associations representing the GovCon industry. A second major signpost on GovCon's roadmap for 2024 is the Cybersecurity Maturity Model Certification, the emerging industry-wide standard for protecting information and systems. Berteau tells our Nick Wakeman and Ross Wilkers all about what contractors are looking for in the final version of CMMC's draft rule, whenever the Defense Department is ready to unveil it. The agenda for this episode also includes discussion about technology trends and the National Defense Authorization Act, a key piece of policy legislation that also helps set the tone for how contractors work with their agency customers.

A great amount of planning went into ASRC Federal's acquisitions of a supply chain and logistics business from Science Applications International Corp. and Broadleaf, an IT services firm. The transactions closed within two weeks of one another. What led ASRC Federal to those two businesses and where does it want to go next? In this episode, ASRC Federal's chief executive Jennifer Felix describes the strategy and market-wide trends behind both of those moves. In speaking with our Ross Wilkers, Felix also explains how federal agencies are working with companies like ASRC Federal to position for the future in terms of supply chain reliability and the adoption of next-generation technologies. The pace of change across the entire federal landscape is not getting slower, but the partnership between government and industry is ramping up as Felix described it.