Insourcing. Organizational conflict of interest. Transparency. If ever industry had its share of issues on the table, this would be it. For ideas on how to navigate the hot button issues of the day, ExecutiveBiz recently caught up with industry veteran Jim Sheaffer, president of CSC – North American Public Sector. In a candid exchange, Sheaffer offers his take on the state of the acquisition landscape. Plus he weighs in on how to stay competitive amid growing calls for insourcing. Whatever you do, says Sheaffer, plan for the long run. Read on for specifics.
ExecutiveBiz: The prevailing consensus is that the government contracting community is fairly buffered from the economic downturn. Do you agree?
Jim Sheaffer: To say that there is little impact from the economic downturn in this particular situation isn’t completely true. Policies of the current administration around things like insourcing and organizational conflict of interest are creating some turmoil in the industry for which the eventual outcome isn’t completely predicted. Some companies have little or no potential conflicts, others have fairly significant ones.
“Focus on value-added solutions and mission-critical problems rather than on trying to grow your business around just providing support services and staff augmentation.”
— Jim Sheaffer
ExecutiveBiz: How can companies within government contracting stay competitive amid growing calls for insourcing?
Jim Sheaffer: Focus on value-added solutions and mission-critical problems rather than on trying to grow your business around just providing support services and staff augmentation. The government continues to need to get value-added solutions funded by the private sector, they need to get those solutions from the private sector. Just bringing a whole bunch of people inside isn’t going to solve that problem.
ExecutiveBiz: What’s your perspective on transparency?
Jim Sheaffer: I don’t think there is anybody in our industry who’s afraid of transparency. This is an honest profession. It’s a profession that is pursued by professionals with high standards of conduct and ethics. That said, a small number of contracts don’t turn out the way they were initially intended but there is no reason why American taxpayers shouldn’t be able to understand that. The real question centers on the unintended consequences of some parts of transparency; they need to be thought through carefully. Having so much transparency that confidential information about a bid or a firm’s financial structure would not be beneficial to the industry in the long run. So, being able to define the limits of transparency in order to protect the commercial interest of the participants in the market is necessary.
ExecutiveBiz: Any advice on navigating these economic times?
Jim Sheaffer: Try to bring your costs in line in the short run so you don’t fail to make the investments to be in a healthy and profitable position in the long run. You have to be careful how you make that trade-off.
ExecutiveBiz: Last year we talked about Datatrac. What does the acquisition landscape look like in the near future?
Jim Sheaffer: The economic downturn certainly has affected the acquisition landscape; it’s changed people’s views on valuations. Some people might be interested in waiting to see if the economy turns around and valuations go back up. My observation is that there aren’t as many targets out there for us to look at as there are going to be in a year or two.
ExecutiveBiz: What’s the latest with Project Accelerate? What specific areas of growth is the program honing in on in the government space?
Jim Sheaffer: Project Accelerate started out with three key components: 1) focus and build on our core business, 2) emphasize the areas of the market that we thought had potential for higher than average growth, and 3) expand our business in the state and local marketplace following federal funding and federal mandates. That definition of our strategy hasn’t changed. As we enter our new fiscal year it’s the same as the last couple years.
How is your company planning for the long run? Share your comments here.
Interview conducted by JD Kathuria
Read more interviews here: https://blog.executivebiz.com/category/interviews/