Margarita Howard and HX5: From 8(a) Graduates to Industry Experts

 

Margarita Howard’s leadership of HX5 provides a practical example of navigating industry challenges in the government contracting space. From her start in the Small Business Administration’s 8(a) program to managing a company with over 1,000 employees, her experience offers clear insights into the complexities of the field.

The 8(a) Business Development Program is a crucial initiative by the U.S. Small Business Administration designed to assist small businesses owned by socially and economically disadvantaged individuals. This nine-year program offers a range of benefits, including access to set-aside and sole-source contracts, business development assistance, and the opportunity to form joint ventures and teams to bid on contracts.

 

“Any business considering joining the 8(a) program must, first and foremost, familiarize themselves with the eligibility requirements for the 8(a) program. When HX5 applied to the program, an applicant’s business had to be at least 51% owned and controlled by a socially and economically disadvantaged individual who is a U.S. citizen.

 

“Additionally, you had to ensure your business was able to clearly demonstrate to the SBA your potential for success. I believe those requirements are still in play, but anyone looking to join the program needs to always ensure they are following the most recent SBA regulations for 8(a) applicants that are in place at the time they decide to submit their applications,” says Margarita Howard.

 

“It’s best if the firm possesses a well-thought-out business plan, as this was another component that was essential for acceptance into the 8(a) program. You need to be able to clearly outline your company’s objectives, identify your target market, provide a competitive analysis where possible, explain your marketing strategy, and provide financial projections.”

Given the potentially daunting nature of the application process, applicants still determining any aspect of the procedure or eligibility requirements should consider seeking assistance from the SBA or a Small Business Development Center in their region. The SBA offers guidance and support throughout the application process, and some companies may also choose to engage law firms specializing in helping businesses enter the 8(a) Program.

“Also, before applying, the firm should absolutely understand both the benefits and responsibilities of participating in the 8(a) program,” Howard adds. “While there are, of course, benefits to being in the program, including things like access to sole-source contracts, mentorship opportunities, and specialized business training, participants are also required to adhere to strict program regulations and fulfill substantial reporting requirements.”

HX5‘s approach to the 8(a) program was strategic. Howard says, “To excel in government contracting, it is imperative to understand the unique characteristics and intricacies of this marketplace. Government agencies at federal, state, and local levels have diverse needs and requirements, which can vary significantly across industries and regions.” 

 

Margarita Howard Reflects on the 8(a) Program’s Impact on HX5

 

For Margarita Howard, a first-generation American and service-disabled veteran, the 8(a) program launched HX5’s growth and success. “After becoming an 8(a) company, we were awarded very quickly four contracts in one year and that really helped in getting us off the ground,” she recalls.

 

Unlike some participants who rely heavily on set-aside contracts, Howard recognized the importance of developing a more ambitious strategy. “It was a very early decision that we would compete while still being in the 8(a) program,” she explains. “I had that competitive edge or desire. And I knew that I didn’t want HX5 to be dependent on sole-source awards.”

 

This forward-thinking strategy positioned HX5 for success beyond the program’s duration. “We had been in the industry and we knew small businesses in our area; that’s all they did was sole-source work. 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,” says Margarita Howard.

 

HX5’s proactive approach included investing in critical infrastructure and building a robust team. “At the end of the day, it’s our great employees and our management and leadership team who makes us successful,” she says.

 

Howard adds, “Also, right from the beginning, we invested heavily up front in purchasing and implementing a specialized accounting system developed for government service contracting firms; 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.

 

Advice for New Graduates of the 8(a) Program

 

Drawing from her experience, Howard recognizes the importance of planning ahead. “One of the most important things that should be done before the 8(a) graduates is to create a postgraduation comprehensive business strategy that outlines the goals, target markets, growth plans, and strategies for sustaining the company’s success once it graduates,” she shares.

 

Graduates should focus on diversifying their revenue streams “to reduce dependence on sole-source 8(a) set-aside contracts,” Howard says. “In fact, this diversification is a requirement while in the program, but once the firm graduates, it’s even more important.” She advises companies to explore new opportunities through subcontracting, teaming agreements, and other avenues to ensure its viability postgraduation.

 

Leveraging past performance and relationships is essential. “The graduated firm should build a portfolio that highlights the firm’s track record of success while in the program, showing examples of customer satisfaction and high-scoring past performance evaluations, and use it to market to the government and to companies where subcontracting opportunities may present themselves,” Margarita Howard says.

 

Fostering solid connections is crucial for continued success. Howard advises, “Also, the firm should continue to maintain strong relationships with government agencies, prime contractors, and industry partners that it’s previously worked with to have access to new opportunities that may develop once the company is out of the 8(a) program.”

 

Support doesn’t end with program completion. “Last but not least, even though the firm has graduated from the program, the SBA still provides various resources and support to graduates of the 8(a) program and the graduating firm would be wise to continue maintaining its relationship with the SBA and take advantage of the postgraduation support and resources provided by the SBA,” explains Howard.

 

“Seeking guidance from experienced mentors or advisers who had firms in the 8(a) program and graduated can provide valuable insights and advice based on their own experiences postgraduation.” 

 

Since graduating from the 8(a) program, HX5 has continued to experience remarkable growth. The company operates in 34 states across 90 government locations, providing professional advisory and assistance services. These services encompass various support functions for government agencies that enhance the government’s capacity to execute diverse mission-critical tasks in areas such as research and development, engineering, information technology, mission operations support, and program management.