Roger Krone on small businesses and the government contracting landscape
Leidos Chairman and CEO Roger Krone served as a keynote speaker at the 7th Annual Northern Virginia B2G Matchmaking Conference. Krone, along with the Small Business Administration's Antonio Doss, shared insights about the government contracting industry with an enthusiastic audience of small business owners interested in working with prime contractors. As a follow-up for those unable to attend, here's a brief Q&A with Krone around some of the same themes he covered in his remarks:
What are some emerging trends in the government contracting space?
An obvious one is the quickening pace of major technological change. Solutions using artificial intelligence, big data analytics, biotechnology, and other technologies, are key areas of investment for the DOD. At Leidos, we’ve already made substantial internal investments into some of these technologies that we think are going to help us penetrate and grow in evolving markets and meet evolving customer needs.
Another trend I see is that we’re essentially in a new era of cooperation and collaboration in government contracting. Providing services and skilled labor for the government customer isn’t enough anymore. Whether it’s figuring out how to implement AI technologies, migrating to secure cloud infrastructures, or executing agile deployments of software, contractors have to anticipate and provide intellectual and creative value for the government customer at speed and at scale.
How is Leidos expanding and innovating to meet government needs? Where do you see opportunities?
We are putting significant resources and attention into the continuous development of new solutions through our Leidos Innovations Center or LInC.
LInC is comprised of one-third of our company’s Technical Fellows and their mission is to help us solve enduring and new national technical challenges. They’re able to meet that mission because they can rapidly prototype and field solutions in areas such as AI and machine learning, big data, cyber, surveillance systems, autonomy, sensors, applied biology, and directed energy – all areas with a lot of opportunity for Leidos.
What are some of the challenges that you see for federal contractors?
I think the challenges we face at Leidos are the same across the industry, especially among the prime contractors. Hiring and talent acquisition, especially as it relates to technical or cybersecurity skills and customer or industry knowledge, is paramount. Leidos is continuously looking for top talent and while technical skills are very important, so is creativity and the ability to think critically. We recognize that people from many different technical backgrounds can contribute to our success and help us fulfill our mission to make the world safer, healthier, and more efficient. And with roots as an employee owned company, we think we have a lot to offer employees where they can perform important work and thrive personally. Beyond hiring and talent acquisition, things like tighter defense budgets and industry consolidation present additional challenges at times.
How does Leidos choose the subcontractors and small businesses it works with?
We’re always looking for subcontractors who add value and can help make us even more competitive. We’re different than some of the other major contractors in the sense that we don’t buy a lot of physical product. Instead, we look for transformative thinking or unique approaches that might help us solve complex technical problems for a wide variety of our government customers. If your small business has an idea or solution that can help make us smarter and more responsive to the needs of our customers, then Leidos wants to work with you.
What advice do you have for small business looking to work with prime contractors such as Leidos?
The small companies who fare the best often have the most tenacious people, people who don’t give up easily and are always willing to try another door. But having grit only gets you so far. You need to do your homework as well. Don’t just study the customer, study the customer’s customers as well. And make sure that what you’re selling is something that the customer, and their customers, might actually want or need.
While it might seem like the government contracting industry favors big companies, there are plenty of opportunities for smaller firms. For one, there are very clear rules that require government agencies and prime contractors like Leidos to do business with smaller businesses. And this is obvious, but the Small Business Administration's main purpose is to support entrepreneurs and small businesses. The SBA is a big reason why almost a quarter of the annual volume of federal contracts is delivered to small businesses.
Finally, since past performance will always be an important factor in government contracting, working with other small businesses who might already have a track record could prepare you for work with larger companies. It’s important to remember that whether it’s Leidos or another prime contractor, there will always be interest in working with subcontractors who bring value and make us more competitive. We absolutely need those small businesses in the supply bay.