By: Zach Miller

According to the Congressional Budget Office, the 2023 federal budget was around $6.13 trillion. Key allocations included $24 billion for NASA to support space exploration and technology development. These budget allocations presented new opportunities for companies to align with emerging priorities. For HX5, a company active in the defense and space sectors, understanding budget changes is crucial for effective planning and maximizing potential growth.

Margarita Howard, the sole owner and CEO/president of HX5 provides insight into how her company prepares for and manages these challenges, ensuring sustained performance and compliance. Furloughs often result from budget impasses, leading to temporary work stoppages for government employees and contractors. Budget cuts can reduce funding for programs and projects, necessitating quick adaptations in project scopes and timelines.

“Every year, we run into, ‘Is the budget going to be approved? Are they going to have budget cuts?’ Those sorts of things. When we approach the fiscal year end, on Sept. 30, it is something that we always prepare for in the month of September,” explains Howard. “What changes may come about, or if they’re going to let us know at the last minute of something that they need, or that we may see some cuts in the following year that we need to prepare for.”

Dealing With Disruptions

Margarita Howard emphasizes the importance of readiness and adaptability in the face of unexpected furloughs. Due to the nature of the work, the company has to prepare for potential disruptions that can arise from budgetary constraints and government furloughs. These scenarios are a part of its operational landscape, and it has developed strategies to handle them effectively.

One key strategy is maintaining clear communication channels with government clients. The company ensures it receives timely updates on potential budget issues and furloughs by establishing strong relationships with procurement officers and contract managers. This proactive approach allows the company to anticipate changes and adjust its plans accordingly.

HX5 recognizes which programs to reach out to and which individuals to prep. Howard prioritizes having all those things ready to go every time it comes up because sometimes, it comes down to the eleventh hour.

In the face of such uncertainties, HX5 has developed a multipronged approach. For mission-critical areas, the company is willing to “work at risk for a little while,” as Howard puts it. This means temporarily self-funding operations until budgets are approved and reimbursements are issued. “We know that with the work that we do, we will get reimbursed,” she says. 

HX5: Budget Management and Prioritization

Effective budget management is critical when dealing with government budget cuts. “So, being prepared for [possible cuts], knowing our finances are always in order, is of critical importance. As a government contractor, our finances can be audited at any time, at a moment’s notice. Again, that comes from the experience of knowing that working for the government, you’re always subject to being audited at any time. So that was a very important experience to have gained early on,” says Howard. 

“From working in the industry, we knew the importance of impeccable recordkeeping. Therefore, we’ve always ensured our finances, and all our records of everything we say and 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,” Margarita Howard adds. 

“As a government contractor being paid with tax-payer dollars, it is the government’s job to audit every single area of what we do for them, from the labor department evaluating our human resources policies, to the financials that we bill to the government for services provided being audited by multiple agencies. Additionally, our security department goes through an annual security audit as well, making sure that we’re doing the proper security training and providing everything needed for the people that are cleared. So it may seem like there’s always an audit going on, but that’s just part of the business of being a government contractor.”

Whether HX5 wins or loses a contract competition, the company gets feedback from the contracting officer to understand how it can improve its proposals and increase its competitiveness in future opportunities. Margarita Howard says, “We try to continuously assess our performance, refine our strategies, and invest in professional development education so our employees are able to always stay ahead in performance.”

By diversifying its client base and pursuing contracts across different sectors, the company minimizes reliance on any single government contract. This strategy provides a buffer against the financial impact of budget cuts in specific areas.

Under Margarita Howard’s leadership, it reviews its operational processes to identify inefficiencies. By streamlining these processes, the company can reduce costs and maintain profitability despite budget cuts.

HX5 invests in technology that improves operational efficiency and reduces costs. For example, the company has integrated artificial intelligence tools to automate routine tasks, allowing staff to focus on more strategic activities. “It’s something that we’re very much involved in already, and because of the work that we do, we try to stay ahead of those changing technologies, AI and cybersecurity,” says Howard. 

Margarita Howard Talks Training and Development

By providing ongoing professional development opportunities, HX5 ensures its workforce is equipped to handle the demands of government contracting, even in the face of budget cuts and furloughs.

“When we talk to business entrepreneurs or new staff we remind them: We know that what we do is not easy to do, and it’s very expensive to ensure it’s done right. A phrase we use often is, ‘If it were easy, everyone would do it,’” Howard says.

“We prefer to hire experienced individuals, so we look for people who have worked with, or supported, the Department of Defense as this experience is always very helpful. Experience in their respective fields such as contracting, accounting, finance, and HR is key, because leading a workforce in this industry is very different than leading it in the commercial world.”

Margarita Howard considers the employees to be HX5’s greatest asset. “I could not be more proud of the team that we have. Many of them have been with us for 10 years or more,” she says. “We have a highly dedicated, experienced management team. We could not do what we do without them. So I want to give a lot of credit to our employees.”

Published by: Holy Minoza