Webinar – How to Achieve Growth & Profitability

Lexy Kessler, Stephen Pimpo & Mark Johnson | January 24, 2018

www.aronsonllc.com/blogs/fedpoint
Introductions

LEXY KESSLER
Partner
Aronson LLC

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Introductions

STEPHEN PIMPO
Principal
Greenhouse Consulting

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Introductions

MARK JOHNSON
Managing Partner
3A Broker Services

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Why Are We Here Today?

Government contractors have had to become

leaner and more agile, adapting rapidly and
adopting new tactics. They are becoming
more efficient in the delivery of services,
including utilizing technology whenever
possible. However, the uncertainty of the
government market is forcing quick
adjustments and contractors need to be
aware of those possibilities. “Strategize,
optimize and realize” should be the new
mantra for companies that want to stay
ahead of the curve.

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Trends Affecting These Companies
Evolution
• Shrinking market
• Significant price pressures
coupled with cost increases
• Industry consolidation and
divesture
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Spending Federal Priorities
• New normal for government • Traditional contractors to see
contracting pressure from non-traditional
• Potential for increase in competitors – government
DOD spending in 2018 seeking commercial solutions
• Proactive efficiency in
technology
• Defense and infrastructure
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2017 Analysis & Outlook

Contractor Profit

Contractor Risk &

Cost

Profit, Risk, Cost Millennials in the Workforce M&A on the Rise

• LPTA has driven down
margins and capabilities
• Contractors taking on
inordinate profit and
performance risk
• Compliance mandates have
driven costs up
• Revenue recognition and
lease accounting changes
coming
• Sluggish transition of
Administration
• Wave of Federal worker
retirements continues to grow
• Generational workforce gap
• Public perception low
• Millennials less interested in
GovCon culture and perceive
fewer, slower opportunities
• Profit pressure, compliance
demands, spending shifts, and
competition to drive M&A
acceleration
• Popular contracts and agencies
key to interest and value
• Streamlining focus and approach

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What Does This Mean For You?

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The New Govconomy

Operations & Systems Contracts Compliance

• Re-engineer back-office & delivery • Be CAS and SCA compliant
processes before the auditors call
• Implement and leverage full • Aggressively address
capacity of accounting / ERP / CRM cybersecurity acquisition
systems for quick efficiency gains requirements & know how
• Aggressively address emerging / to recoup the costs
changing cybersecurity • Use compliance with new
requirements requirements as a
• Monitor and prepare for cyber competitive advantage
incidents – they will happen to you

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The New Govconomy

Financial Talent Management

• Implement accounting rule • Change personnel / skills to
changes to ensure accurate solution / capability needs
financial data • Manage executive compensation
• Explore available tax credits • Proactively address SCA
compliance
• Adapt culture and processes for
next-gen leaders

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The New Govconomy

Corporate Growth
• Strategically plan for contract opportunities
• Increase in use of joint ventures
• Clearly demonstrating solutions/capabilities
• Enforce strict bid/no-bid process
• Diversify into adjacent service offerings &
agencies (organic growth, M&A or both)
• Balance B&P spend vs. cost reductions

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Contract Management vs. Account Management

CONTRACT MANAGEMENT ACCOUNT MANAGEMENT

•• Responding
Responding toto client
client needs
needs within
within •• Driving
Driving increased
increased client
client service
service by
by
contract
contract scope
scope establishing
establishing and
and expanding
expanding relationships
relationships
•• Performing
Performing high-quality
high-quality work
work •• Identifying
Identifying new
new opportunities
opportunities
•• Managing
Managing compliance
compliance to
to contract
contract terms
terms •• Introducing
Introducing new
new ideas
ideas
•• Protecting
Protecting your
your territory
territory
•• Building
Building aa strong
strong brand
brand across
across an
an
agency
agency

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A Simple Formula for Growing Accounts

• Penetrate – entering a new account by winning a competition, being hired sole

source or by being added to a team

• Radiate – leveraging your presence under contract to proactively expand

relationships and grow revenue

• Insulate – protecting the business and relationships you have build from the
inevitable attempts of competitors to take them

The overall objective is to

develop
“Clients for Life”

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Growing Business Development Folks

• Provides huge upside and real value

• Current employees have:

– Been vetted through the hiring process
– Have performed successfully and have a proven track record
– Understand the corporate culture and organization
– Know the competition and your value proposition
– Have a command of the company’s service offerings and products

• Client facing and delivery professionals can become your best sales people

• All employees can help sell – not in the same way, and some will be better than
others

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Selecting the Right Deal

• Core service offerings? Can you “play to your strengths?”

• Do you have relevant past performance and corporate quals?
• Size, timeframe, contract type and vehicle?
• Do you know the client? Does the client know you?
Sometimes you
• What are the current issues, budget outlook? just
• Who are the incumbents and competitors? have to let go!

• Right personnel or appropriate teaming partners?

• What are the price points? Can you be competitive?
• Have you been able to talk to the client or gain market
intelligence?

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One “Size” Does Not Fit All
We look at where a business fits in our Small Business Growth Continuum (i.e. DESTINY)
to determine the approach to accelerate their revenue growth:

Transform – A firm typically with $22M+ in revenue that must

Transform “transform” to compete upon graduation.

Sustain Sustain – A firm typically with $12 -22M in revenue that is looking
to “sustain” their growth in the market.

Evolve Evolve – A firm typically with $5-12M in revenue that must

“evolve” to compete on a broader level.
Dream
Dream – A firm typically with $1-5M in revenue that has a “dream”
to grow their business into something greater.

The strategic
The strategic and
and tactical
tactical approach
approach to
to growth
growth differs
differs in
in each
each phase
phase of
of the
the continuum.
continuum.

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What is most important for your business?

• We see many companies that have graduated and fallen back, and we have
adopted the term 30-20 company for those firms

• How do you avoid becoming a 30-20 company?

– Plan strategically on how to continue to maintain and grow revenue from small
business set aside contracts
• Seek contract vehicles that will extend the life of your access to SDB work
• Identify a “flip” partner for re-competes
• Consider if there are similar opportunities to strategically form a MPP and JV’s
– Never lose focus on quality delivery and client relationships
– Understand the competitive landscape on each deal
– Team to Win

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What Does This Mean For You?

What does
this mean
for
you

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Contact & Connect with Us

Lexy Kessler Stephen Pimpo

301.231.6218 410.903.1548

lkessler@aronsonllc.com spimpo@Greenhousefirm.com

linkedin.com/in/lexykessler linkedin.com/in/stephenpimpo/

Mark Johnson

610.357.9099

mark@3absllp.com

linkedin.com/in/mark-johnson-a304224/

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