Inaugural GovCon Summit Addresses Developing Political, Legislative, and Economic Challenges Faced by Area Government Contractors
Government representatives and industry experts speak to members of the government contracting industry at event hosted by SC&H Group, and Spectrum Careers
Government contracting leaders and executives from across the region gathered last week to discuss the ever-shifting industry landscape at the inaugural GovCon Summit.
With significant acquisitions like Northrop Grumman’s bid to buy Orbital ATK, the push by Senate Democrats to strengthen Buy American Act requirements, and the ongoing debate around President Trump’s proposed tax plan, the government contracting industry is still learning how to navigate a new presidential administration and a new way of doing business.
The summit, hosted by SC&H Group and Spectrum Careers was designed to help the Mid-Atlantic’s large number of government contractors focus on the most important topics the industry faces: from mergers and acquisitions, and capital markets to tax reform, new legislation, procurement, and general contracting strategy.
GovCon Summit organizers, Pete Ragone, Director at SC&H Group and Kevin Kelly, Managing Partner of Spectrum Careers recognized the government contracting industry was in great need of an educational platform where leaders and experts could discuss important issues, trends, and the future of government contracting as a whole.
“There’s no better time for this conference,” said Ragone. “The government year-end just happened in September. We’re nearing the end of the first year of a whole new presidential administration. We’re experiencing an incredible amount of change in the industry, and a lot of good change at that. The government contracting industry has been missing a forum like this to discuss those important changes and challenges.”
Dr. Jerry McGinn, Principal Deputy Director at the Office of the Secretary of Defense, GovCon’s keynote speaker, addressed the current state of the government contracting industry and the role his department is playing to support the industry.
“Senior DoD leadership has indicated that improved government contracting methods are a priority to reform acquisition processes,” said McGinn.
McGinn detailed an executive order signed by President Trump requesting a comprehensive report on the state of the contracting industrial base. The report is an inter-agency effort. Parts of the report will be available in an unclassified summary.
Matt Roberson, Principal at SC&H Capital, led an engaging panel discussion on the active M&A market within the government contracting industry featuring two private equity buyers (Arlington Capital and CM Equity), two strategic buyers (MAG Aerospace and PSS), and veteran M&A attorney Dean Rutley of Womble Carlyle. Roberson commented, “While market uncertainty still exists, the market is experiencing good tail winds right now.”
Rutley, while optimistic on the future for the GovCon deal market, stressed the importance of due diligence, stating, “Purchase Agreements are actually risk allocation documents; as such, proper due diligence is where you win or lose the deal.”
Scott Goss, CEO of PSS, urged the audience to seek the right financial and tax advice before entering into a deal. “Get the right advice right out of the gate to structure the deal in the most efficient way possible,” said Goss. “Seek out the SC&H’s and Womble’s of the world. Use them for guidance.”
Joe Fluet, CEO of MAG Aerospace said when assessing a deal, “Meet with the people of the company and assess them yourself. Not just senior management, but also the people under them — the people who build and sell the product. Those are the people I want to meet with. That’s the only way to get a complete picture of the company.”
SC&H Group tax Principal Angelo Poletis and Senior Manager Chris Davidson shared their insight on the recent release of President Trump’s tax plan. The pair mentioned the ongoing debate around the Republicans’ effort to repeal and replace the Affordable Care Act explains the late release of the President’s tax plan.
Poletis believes, “At best we can hope for legislation to be passed by Christmas. Likely it will be in January, but the longer it takes Congress to pass, the more likely the plan won’t go into affect until 2019.”
While Davidson acknowledged much of the tax plan is still unknown, and subject to change, he believes the proposed elimination of the benefit for itemized deductions “might have implications on the banking industry,” speculating the banks would be less willing to grant loans because of it.
Dan Snyder, the Deputy Director of Government Contracts Research at Bloomberg Government, lead a panel discussion on procurement and strategy. Discussing the importance of OTA (Other Transaction Authority), Snyder asked, “The federal government has been increasing usage of OTA’s and other innovative acquisition methods in order respond and prevent from incidents, such as cyber-attacks, from occurring. Could we discuss what role OTA’s and other innovative methods are now playing and could continue to play in shaping the future of government purchasing?”
Responding to Snyder, Karen Thornton, Director of the Government Procurement Law Program at George Washington University, said, “When you consider first principles in the light of rapid discover and new technologies, you see the tension between efficiency, competition, and transparency in government procurement. OTA is lowering the barriers to participate and to innovate, and new guidance will likely help expand the use of this tool.”
The summit concluded with the “RecognizeDC Government Contracting Awards Celebration.” The awards program recognized 40 companies across four categories for their contributions to the market and community. The full list of winners can be found at: https://www.govconsummit.com/winners
SC&H and Spectrum Careers, are proud to offer the insight and expertise the government contracting industry needs to thrive and be successful. And, after a successful inaugural event, GovCon Summit sponsors – SC&H and Spectrum Careers – are already looking to the future. The trio believes GovCon will become a mainstay event in Washington DC for the government contracting industry. The companies are continuing to look for new outlets and forums to provide lasting impact and education for the industry, and anticipate a GovCon 2018.
For a full list of speakers and topics visit: https://www.govconsummit.com/.
About SC&H Group
SC&H Group is a nationally recognized management consulting, audit, and tax firm serving clients from rapidly growing private sector businesses to Fortune 500 companies with global brands. The firm’s strategic practices provide the leading-edge thinking and advice that transform our clients’ businesses and help them outpace the competition. We embrace the future and help clients prepare, innovate, and evolve their businesses in this complex and highly competitive world. For more than 25 years, SC&H Group has demonstrated its commitment to delivering powerful minds, passionate teams, and proven results on each and every engagement. Learn more at www.schgroup.com.