Margarita Howard on Establishing HX5 as a Prime Contractor in a Competitive Market

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By Jacob Maslow

Margarita Howard established HX5 in 2004. Today, the company provides professional mission support services to federal space and defense government agencies. Over the past two decades, it’s earned a trusted reputation with its government clients for offering professional software and hardware engineering services, mission operations support, information technology, research, and development.

“I was aware of the socioeconomic set-aside opportunities for veteran, woman-owned, small businesses. I had also worked with large businesses, so I was aware of the large business aspect of government contracting as well. So, that’s when I decided to start HX5. And since my family had always been very supportive of my high aspirations, I named the company HX5, which is Howard times five, for my family,” Howard explains.

Howard also credits her entry into the Small Business Administration’s 8(a) program, a nine-year training program that offers mentorship and support services to business owners who are socially and economically disadvantaged. Howard, a first-generation American, qualified. With an 8(a) accreditation, Howard could now bid on and win contracts up to several million dollars. “After becoming an 8(a) company, we were awarded very quickly four contracts in one year and that helped in getting us off the ground.”

But the starting block was just that for Margarita Howard and HX5 — she wasn’t resting on her laurels or taking the easy way out. Her vision had far loftier goals.

“I had that competitive edge or desire. And I knew that I didn’t want HX5 to be dependent on sole-source awards from the SBA,” she explains.

“We had been in the industry, we knew small businesses in our area, and that’s what many of them did. And once the program was over after nine years, they were done. They had never competed. They had never really done it on their own,” she adds, highlighting her determination to build a company that could sustain and thrive independently.

She was smart enough to know success isn’t often built on the back of one visionary. Howard made a point of surrounding herself with the best and brightest employees. She readily acknowledges their vital role in its achievements. She says, “At the end of the day, it’s HX5’s employees. Many of them have been with us for 10 years or so, and we have a highly dedicated, experienced management team. We could not do what we do without them.” This emphasis on teamwork and employee value is a testament to her inclusive leadership style.

The Prime Government Contracting Landscape in 2024

Competing for federal government contracts requires a nuanced approach. This involves extensive research to understand specific federal agencies’ missions, visions, and deliberate goals. Building a list of contacts and establishing relationships with key decision-makers is crucial. Contractors must also diligently target opportunities that align with their core competencies and expertise.

Margarita Howard has a knack for recognizing that success in the field of prime government contracts demands a combination of compliance with regulatory changes, strategic business development, adaptability to technological advancements, and shifting government priorities.

And she had a few more keen observations in her tool kit.

“If you don’t have the competitive edge and understand what it takes to compete for government work, then it’s a daunting task,” she acknowledges. “You have to know and understand the industry first, then build a good team, have the right infrastructure in place, and ultimately be able to meet all the obligations and requirements that come with government contracting.

“We made the decision very early on that we wanted to compete. Part of that decision early on was to make smart infrastructure investments. For example, early on, we invested in an industry-recognized accounting system that was government approved for companies doing business with the government. A lot of small businesses usually wait many years before making such an investment, but we found tremendous benefit from having it in place early on. That was one aspect that made HX5 very attractive to large businesses who were looking to partner with small businesses to meet their small business goals that are often required in large government contracts”.

She continues, “Those were investments the company made that were very key in the beginning. And certainly, the SBA, the Small Business Administration, makes those recommendations, but they don’t force you. It was a risk that we took, and it highly paid off.”

Did it ever. Securing a prime government contract is no walk in the park. In 2024 the playing field is highly competitive, marked by evolving regulations and increased opportunities, especially in specialized areas such as cyber security and artificial intelligence. The federal government’s continued focus on specific objectives and the introduction of new legislative and regulatory changes significantly impact the landscape of government contracting.

One of the fundamental legislative changes in 2024 is the National Defense Authorization Act for Fiscal Year 2024. This act includes provisions directly affecting government contractors, such as new greenhouse gas emissions reporting restrictions for contractors who earned at least $7.5 million in federal contract funds in the previous fiscal year. Additionally, the NDAA prohibits Department of Defense subagencies from requiring defense contractors to disclose greenhouse gas inventories as a condition of receiving a contract award. This could complicate the implementation of the Federal Acquisition Regulation amendment regarding emissions disclosure, which is still under review.

The NDAA has also brought changes to subcontracting, particularly for small businesses. The act revises the Small Business Act to enforce stricter requirements on prime contractors to ensure timely payments to small business subcontractors. This includes reducing the notification period for past-due payments to subcontractors from 90 to 30 days.

Furthermore, the NDAA amends the Small Business Act by increasing the governmentwide goal for service-disabled veteran-owned small business participation from a minimum of 3% to 5% of the total value of all prime and subcontract awards for each fiscal year.

The Inception of HX5

The foundation of HX5 was laid with a clear vision: to establish a company that would not only participate in government contracts but excel in them. Howard’s approach was characterized by a refusal to rely solely on sole-source contracts, which can be issued without a competitive bidding process.

“I knew that I didn’t want to depend on just sole-source awards,” Margarita Howard says. Her vision has always been to create a company capable of competing and thriving independently beyond the limited scope of sole-source awards. This decisive approach stemmed from Howard’s prior experience in military healthcare management and her understanding of the industry’s dynamics. She was part of the contracting team that first introduced Tricare, a United States Department of Defense Military Health System program. “I was part of the overall contract team tasked with implementing Tricare. And, of course, there was a lot of debate and dissatisfaction in our area and across the country. Nobody likes change. So we had a lot of town hall meetings. I was an area field manager at the time, responsible for my office in Florida. I then quickly advanced to a regional director, where I was part of the senior leadership team responsible for the southeast region of Tricare.”

During that time, Howard learned much about how contractors and the military worked together on government contracts. ”At the same time, I interacted with the commercial side of it because part of my responsibility was ensuring that we had providers that wanted to be a part of the military’s network of providers,” she explains. “So it was a collaboration of meeting with civilian providers to encourage them to accept this new military Tricare insurance program. This also included monthly meetings with the military senior leadership at every military installation in our region, giving them a monthly briefing of the progress of the program’s implementation in their respective areas.”

Margarita Howard: Navigating Challenges in a Male-Dominated Industry

HX5, under Margarita Howard’s sole ownership, consistently adheres to a corporate philosophy centered on providing professional services of exceptional quality to its government clients. Its solid commitment to ethical conduct and a focus on supporting clients’ missions has helped the professional engineering and technical services company grow from just one employee to today, with over 1,000 employees operating in 34 states and over 90 locations nationwide.

Being a female CEO in a predominantly male-dominated sector brought its own set of challenges. Margarita Howard had to frequently navigate biases and establish her credibility in rooms often filled with male counterparts. She focused on her competencies, steering conversations back to a professional level. “It’s a very big challenge for women,” she admits. “We just have to overcome more challenges that unfortunately still exist.”

She believes in the potential of women in leadership positions. A remarkable company achievement under Howard’s leadership is its commitment to diversity, particularly in promoting women to leadership roles. “The majority of our management team are women,” Howard says.

The company’s success is attributed mainly to its dedicated employees, from the management team to the employees supporting HX5’s contracts. Howard places immense value on the collective effort of her team. “At the end of the day, that’s who makes us successful,” she acknowledges, emphasizing the role of her employees in HX5’s growth and success.

With the company having met the growth trajectory plans Howard had envisioned, Howard now is focused on sustaining HX5’s current size, while always remaining committed to its core values. Her blend of strategic vision, resilience, and commitment to her team is poised to guide the company’s future direction.

It’s working.

In 2012, the U.S. Small Business Administration acknowledged Margarita Howard’s achievements in expanding HX5, awarding her the 2012 SBA Minority Small Business Person of the Year for SBA National Region 4. Howard’s success continued to be recognized in 2015, when she received the SBA North Florida Woman-Owned Small Business Person of the Year award.

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