Is stagnation in the GovCon system getting worse?

Delays in federal agencies in these three categories are not new: bidding, selecting companies for rewards, and then funding contract work.

But some CEOs and other senior executives in the market have told investors that there are unique circumstances to consider, especially the Omicron pandemic option COVID-19 and a further solution.

Here are pictures of how some of them summarized the situation at the annual Cowen Aerospace / Defense & Industrials Conference on February 8 and 10.

Leidos CEO Roger Krone

“The Pentagon has really overestimated their status, and they have, in effect, closed the building again. I recently had a fairly public meeting with the Minister of Defense for Hypersonic Technology, and this meeting, in my opinion, would be better held in a secret facility.

“But because of Omicron we’ve all done it virtually, and I think it affects purchasing officials, program managers, people who have to do the work to make the acquisition process run smoothly and efficiently.

“We kept seeing the programs move to the right, to the delay of acquisition and the like. But I am not at all critical of the Pentagon. I think we should take Omicron very, very seriously. ”

Peraton CEO Stu Shi

“There’s just stagnation, and if you can’t make an RFP (request for proposals), you can’t submit an offer, you can’t submit an offer, no one will award a prize.

“A lot of work is moving towards contract growth. If you already have a contract, they keep dumping money on it, they extend the contracts. It’s not necessarily good if you’re in a growth model.

“The way the government has structured these acquisitions because they are starting to scale, they are not doing fast things. There are also fewer people in government who can make acquisitions.

“We have a customer, I think there were 13 people in the office who were contractors doing the work, and now there are only two left. People have retired, people have just gone on ”.

CACI International CEO John Menguchi

“In the past CR, where the government spent 1/12 each month of last year’s budget, they cut it. Some agencies spend 70 percent, of which 80 percent. Eventually, when they add up, it leads to a different level of funding orders, which slows down our ability to do the job.

“Our problem was not that the inquiries were published, but later failed. I mean, we’ve had a couple of awards, but that’s part of any other year.

“It’s more about getting the money they can spend on the contract, and secondly, we need to find a better solution for this CR. We are afraid that CR will continue to involve the government in the fourth quarter, and if we do not have people who can handle the flash, we will not see this flash. “

Lloyd Howell, CEO of Ellen Hamilton’s Booze

“We’ve really seen that even with rewarded work, it’s just a slower pace and things are going. I think it is not a matter of desire or lack of desire to protect our customers. But, nonetheless, it has led to things going a little slower.

“Hand in hand with this are programs that have shifted to the right, and I have to admit that we are a little deja vu because we saw similar dynamics in the third quarter of last year. So we are still persistent in attracting our customers, pushing as needed, but that was what it was.

“We are encouraged by the recent dynamics, when I think the Ministry of Defense has at least begun to formulate an intention to open things up a little more.”


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