Government contracting presents unique challenges that require strategic planning, infrastructure investment, and a deep understanding of complex regulations. For HX5, a professional services firm supporting federal agencies, positioning for success has meant focusing on operational excellence while navigating intricate compliance requirements.
Margarita Howard, sole owner and CEO/president of HX5, has built a company that operates across 34 states and 90 government locations. Since its founding in 2004, HX5 has grown to employ over 1,000 professionals specializing in research, development, testing, evaluation, hardware and software engineering, and mission support operations.
The Foundation for Federal Success
Howard’s approach to federal contracting emphasizes early infrastructure investment as a cornerstone of sustainable growth. This strategy established critical systems before pursuing significant expansion.
“Right from the beginning, we invested heavily upfront in purchasing and implementing a specialized accounting system developed for government service contracting firms,” Howard explains. “A system we knew the government was very familiar with and that would provide us the necessary accounting tools to pass government billing audits and gain government approval for use in the performance of our government contracts.”
This early decision proved pivotal in HX5’s development. “So, that was also very attractive to large businesses, that we were very small at the time and that we already had this government accounting system in place that those large businesses had.”
Rather than focusing on immediate profitability, Howard recognized that establishing proper infrastructure would create long-term advantages. These investments “were very key in the beginning. And certainly, the Small Business Administration makes those recommendations, but they don’t force you [to implement them]. Yeah. And it was a risk that we took and it highly paid off.”
Navigating Regulatory Challenges with Expertise
Federal contracting requires meticulous attention to regulations and compliance requirements. Howard has positioned HX5 to excel in this environment through comprehensive expertise and record-keeping practices.
“From working in the industry, we knew the importance of impeccable record keeping,” notes Howard. “Therefore, we’ve always ensured our finances, and all our records of everything we say we do must always be supported with the appropriate documentation and recorded accurately because, as a government contractor, all of our records are open to the government’s inspection and audits at any time. These are some of the many reasons for the high standards that we hold.”
The company maintains specialized knowledge in multiple areas to address specific challenges. “We have built and keep a team of advisers that specialize in the government industry, in the government field. These external experts help us with the more challenging and complex regulatory matters, for example, whether it’s a legal issue, an accounting issue, or an audit issue. Those are types of external situations where we may need to consult with these experts. They’re part of our practice and business model.”
Building Strategic Relationships with Agencies
Howard’s positioning strategy extends beyond infrastructure to relationship development with government agencies. This approach focuses on demonstrating value through consistent performance rather than pursuing every available opportunity.
“Large businesses and the government have to meet small-business goals,” Howard explains. “When they find a small company that they know understands the industry, that performs well, takes care of its employees, and know they’re not going to have to hold their hand, so to speak, that makes for a very positive long-term relationship between the two companies and oftentimes leads to new contracts and the expansion of existing work.”
These relationships yield substantial benefits for HX5’s growth strategy. “Building strong relationships with government agencies is an invaluable asset for successful government contractors as it can serve to provide the contractor with positive performance appraisals and sometimes even lead to new or additional business.”
Howard’s leadership has positioned HX5 as both a prime contractor and subcontractor, creating versatility in pursuing federal opportunities. “It’s a mix. We have won some, for our size company, very large prime contracts. And we have large businesses as our subcontractors. And then we’re a very good subcontractor as well,” she says. “We have also been awarded a Prime-Subcontractor of the Year award in recognition of our outstanding performance as a subcontractor.”
Through strategic infrastructure investment, regulatory expertise, and relationship development, Margarita Howard has created a positioning strategy that enables HX5 to navigate the complexities of federal contracting while delivering consistent value to government clients.