I am a government contractor in DC - ask me anything

sb842 PT

(Senior Monkey, 95

Points) on 12/6/13 at 6:54am

is most defense work done by engineers or is there cool stuff available for finance-y types as well.

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sb842,

Most defense work is done by neither! It really depends what you want to get involved with. A good example now might be the F-35 program, which is I believe the largest Acquisition Category I program (ACAT - government acquisition programs are broken down into 4 main levels, each with a couple of subsets based on various factors including cost, complexity, etc.) Then again there is tons of contract work that has nothing to do with engineering, such as developing training programs and IT to name a couple.

I guess the biggest thing to consider here is that DOD's annual budget, not including overseas contingency operations (OCO - budget trickery) funding, is a HALF A TRILLION dollars per year, for an organization whose active duty membership is 1.5 million strong. There are literally opportunities to do anything and everything. If you are into dealing making / sales, there is plenty of room for such business development roles. Also for everyone government program there are tons of back office finance roles on the comptroller/accounting side as well. The money involved virtually guarantees a fair amount of finance work.

Cheers,

Garfield

Just a nitpick, but Booz and Co. was acquired by PwC. Booz Allen Hamilton is a huge presence in the federal contracting realm (not Booz and Co.) and is backed by the Carlyle Group. The two have been separate companies since 2008.

mikesswimn,

1) You mentioned that you do the equivalent of front office work, can you describe this further? Do you get into the actual proposals and contract negotiation? Do you deal with subs or vice versa (i.e. 8A subcontracting, etc.)?

Yes! Just so everyone is on the same page here, let's say the government needs to build a new combat vehicle. It's not like when a company decides to have an IPO and they get to choose whether Goldman or JP Morgan gets to do the road show. Because we are talking taxpayer dollars here, the Government almost always (although there are exceptions that I will get to) publically releases a request for proposal (RFP) or request for quote (RFQ) from industry. It will list the requirements of the work, the type of pricing to use (Firm Fixed Price, CPFF, T&M), the instructions for what can and cannot be included in the proposal, etc. Sometimes this is vague and sometimes it is detailed. The biggest thing to know is that government work is usually won way before the proposal comes out, during the capture / BD phase. Basically my job involves, or has involved understanding what customer requirements currently are, what they will be, when existing contracts will expire, and preparing the battlefield through client interaction/demos to let them know why my company is the best prepared to provide them with a solution to their requirements. There generally is no contract negotiation per se, usually the government says we need X, a company will provide their price and solution, and then a winner is chosen based on specific weighted criteria. Sometimes there are multi-round Best and Final Offers (BAFO) where pricing is revised, but usually not.

I deal heavily with subs and "set-asides" all the time. Basically each government agency/department comes up with small business set-aside goals that a certain percentage of their contract work should go to Small Business, Woman Owned Small Businesses, Veteran Owned Small Businesses, Service Disabled Veteran Owned Small Businesses, 8(a)s, HUBZones (kind of a geographic set aside for rural or poor urban areas), etc.

2) Do you deal exclusively with DoD? Or do you with many federal agencies (i.e. DoS, DHS, Intel, etc.)? If you deal with several in your role, how are they different? Do they each pose their own set of challenges?

In the past yes, but now I am moving away from DOD into a couple of other areas---I have worked in DHS, VA, the individual services, and the Intelligence Community (IC). Every department is different in how the procure work, and agencies within departments have different standards, pecadillos, etc.

3) How important are clearances in your work? I imagine that if you're dealing with the DoD, everyone has a secret level clearance, but what about TS? Full poly TS? TS/SCI? How has the clearance process changed over your career?

Surprisingly not that important! Most people do not have clearances. I think nationwide only 3.5 million people have secret clearances (which is a joke in and of itself), but TS is less than a million, and when you start getting into higher than that (Sensitive Compartmentalized Information, Poly, Lifescope, etc.) it is much less.

The clearance process in my view is fundamentally broken and is driven by a cold war mentality to prevent Soviet esponiage. The process itself is fairly easy until polygraphs get involved, but that doesn't happen until the TS/SCI level when it is required (it isn't mandatory) and only for certain roles. Having a clearance certainly helps, but is not necessary. I would also add that as long as you are honest and your transgressions are several years past, getting a secret or even TS isn't that big of a deal. JUST BE HONEST!

4) Of course, the token "how's the exit ops?" Many of my friends in your field have a love/hate relationship with the client. They always seem to complain about how client side employees don't do much but, really, they all secretly want their jobs :). Is this the most desirable exit? Or have you heard about other opportunities available to former contractors?

Generally what I do is the exit opp for federal government civilian or military professionals, but the ultimate exit opp in this field is starting your own company. It's really no different from when some stud at a PE firm or hedge fund realizes he/she is awesome and can do what they are doing for themselves but only make a lot more money. One way of looking at it is if I work for a huge company (CACI, SAIC, Booz Allen) and am completely running a 200M program, how much am I getting paid vs if I owned a company whose sole contract was that 200M program? A lot less.

Other people look at exit opps into Government, particularly politically appointed Senior Executive Schedule jobs that pay garbage (tops out at 200k for say Secretary of State), but wield ridiculous outsize influence. Generally this a reverse exit opp where money is traded for prestige (sense of purpose too) and the promise of even better exit opps down the road. If you are deputy assistant secretary of whatever, your rolodex guarantees post-Government employment, virtually for life.

5) Many people here are aware of the acquisition of Booz by PwC from a consulting perspective, but I'm not sure if many are aware of Booz's large presence in the federal contracting realm. How do you view this acquisition from the perspective of a defense contractor?

Another poster answered this, but Booz Allen is different then Booz and Co.

Hope these help and I will be on here this afternoon when this goes on the main page for more prompt answers.

Cheers,

Garfield

4) Of course, the token "how's the exit ops?" Many of my friends in your field have a love/hate relationship with the client. They always seem to complain about how client side employees don't do much but, really, they all secretly want their jobs :). Is this the most desirable exit?

I should add the transitioning from the private sector to the government is akin to moving from consulting/IBD to F500 companies --- less demanding schedule and less pay. Client side employees (federal government employees on the GS or other pay band scales) have a reputation of doing less than private industry. Let's just say that it is virtually impossible to fire a federal worker after an initial probationary period, and people can and do ride it out forever without accomplishing much ever. Add in automatic step pay increases and you might have a good picture as to why a private industry guy would trade increased pay for near total job security (and much much better benefits) working for the federal government. Some might counter that they get furloughed with the government shutdown, and lose pay, but in both this and the previous mid-90s shutdown everyone received backpay for work never completed.

Cheers,

Garfield

2pm!

What's your take on China's extended air detection zone?

I did say anything!

China likes to poke (some may remember the EP-3 Hainan incident pre 9/11 very shortly into GWB's first term). After 9/11 they stopped poking pretty much for the remainder of Bush's presidency.

They currently claim an economic exclusion zone (EEZ) that contravenes established international norms, and the ADIZ runs concomitantly with that in terms of PLA (Navy) anti-access / area denial (A2/AD) strategy against the much superior US military. Basically if the US/Japan/S. Korea had not run flights over the disputed area after China's announcement, China would have likely declared an ADIZ over the South China Sea too (why not).

Getting South Korea and Japan to both independently run flights over the disputed area in a show of force is truly amazing to anyone that is the least bit aware of Japanese-Korean history, particulary considering how much the Koreans hate the Japanese (rightfully so) for its absolutely brutal half-century occupation of Chosin from 1900-1945.

Bottom Line: This is a problem that will continue but can be managed pretty effectively from a US standpoint. If Japan amends Article 9 of their constitution (offensive war ban) and beefs up military spending (which politically is brilliant), expect further trumped up escalation from the PLA. The US pivot to the Pacific makes the Chinese uncomfortable so they will continue to go after US allies in the region.

Cheers,

Garfield

I absolutely disagree. Study something you love? You know you can read all of those history textbooks at the library, for free right?

Libraries also have finance books, no?

What is the purpose of spending money/going into to debt for a degree that isn't related to your career aspiration?

I did not discuss college financing and one does not major in Hedge Funds, Consulting, Investment Banking, or Private Equity. Many in those fields did pursue an undergrad path in finance-like fields such as economics and business, but plenty also in the liberal arts and sciences. I highly recommend studying something you enjoy so you can concentrate on the most important thing during undergrad, crushing strange.

It seems you were successful with it, and obviously there are countless others, but giving this advice is not really helpful for people on the forum especially with intentions of working in finance.

I originally posted this thread in the "other careers" forum.

Sorry to come off harsh, but it just bugs me the amount of people that major in history, english, medieval studies ect and then complain when they can't get a job and have $100k in debt.

This bothers me as well, but I do not really see its relevance to this thread. I am guessing by your screenname that you are an Big4 accountant (condolences). If so it explains your fascination with treating college as a trade school. But to each his own.

Cheers,

Garfield

What is your comp?

I have a lower six figure base, an annual bonus structure that can match 100% of my salary, but most importantly, I receive a point in commission on all revenue I bring in through my accounts.

Cheers,

Garfield

What would be the best way of getting a position like yours coming from such a liberal arts background?

You almost always have to put in a few years to (1) Gain a deep technical background in your target area(s); (2) Understand how the Federal Government procures services (the Federal Acquisition Regulations far); (3) Understand how to read a Government solicitation and respond with a compliant and highly rated proposal; (4) Determine staffing requirements; (5) Prepare a competitive and profitable pricing structure; (6) Engage your customer to understand their problems; (7) Strongly align your customer's requirements with your solutions. These happen from a combination of working as an analyst or engineer in a target field and building a base of knowledge, moving up to a more senior managerial role, preparing proposals, understanding customer price points, understanding your competitor's price points, engaging Government decision makers, and developing compelling solutions, processes, and/or work products.

I personally started off as an analyst, got roped into putting together some fairly high level classified reports, moved to proposals and then program management, and finally moved to business development. The iteration isn't particularly important, but generally successful business developers are very well rounded.

Would it be doing say 3 years as a Contract Specialist with the Feds and then moving over to private like the listing below, assuming one qualifies given their clearance and experience requirements?

This is very doable. I know many in government contracting who have had finance, liberal arts, science/math, JD, and/or MBA backgrounds who have moved into contract specialist/officer roles. Learning how the Federal Government procures goods and services can be good preparation for moving to the private sector. Many prior uniformed military acquisition professionals retire or separate from the service and go into business development or start their own companies to compete for contracts.

How much upside on that "point" can one reasonably expect?

Sales, business development, and capture roles that offer equity in terms of profit/revenue sharing can be very lucrative. There are roles with unlimited upside, and it is very possible to get in on the ground floor at a company that five years after opening its doors is making 9 figure annual revenue. As with anything, getting in early makes a huge difference.

Has anyone at your position level, during your tenure, approached seven figures with that point on sales structure?

At my tenure level seven figures is highly unlikely, but certainly possible, it really depends on what you are selling, and the nature of the market.

Also, where do you see yourself in 5 and 10 years?

Ideally working for the Federal Government at a senior policy level. Possibly at the helm of my own firm.

Cheers,

Garfield

For someone who does their time for 3 years with the Fed as a Contracting Specialist, what are the companies and titles of roles they should be targeting that pay/compensate/incentivize with commission structure like your company?

The companies whose contracts have come across your desk is a good place to start. Compensation structures vary and everything is negotiable if you can demonstrate value.

Also, would it be fair to say you are now all-in (with comish structure) pulling down mid six figures annually?

My on target earnings is certainly in that range.

What is your lifestyle like in this profession (i.e., hours worked per day/week, time off/vacations, collegial nature of work environment, work conditions)?

It really depends on the company and the individual. In general I would say that government contracting is pretty easy. You can make a very good living with solid work/life balance.

Cheers,

Garfield

jay765,

Crush the internship obviously. I would linkedin/google search for employees of the firm in your local area who are veterans of your service. Before the intership I would talk to your ROTC officer instructors about your professional ambitions and get their thoughts. Not sure of your relationship with them, but they might be a good resource in terms of their peers who have left the service and are now in private industry in the defense contracting world. Once you get assigned to a specific duty station your fellow officers are going to be a great resource as well.

Not sure of your background, but it wouldn't hurt to go to some of the big defense contractor websites and just snoop around their available career listings. I would check out SAIC, Booz Allen, CACI, Lockheed, Northrop, Boeing, Raytheon, General Dynamics.

Your military credentials will help down the line immensely once you get commissioned and are assigned to a unit. It will certainly land you interviews a lot easier if you play it right.

Cheers,

Garfield

What branch and what was your rate/MOS if you don't mind?

Infantry.

Cheers,

Garfield