Stability Within Reach

As the economy continues its roller-coaster ride, traditional verticals such as accounting and manufacturing are taking a beating. One area that's holding its own is that of state and local government. Budgets for 2009 have long been set, providing some stability for VARs in that sector. Heading into 2010, necessary capital projects are moving ahead. The government's purse strings may be tightening, but they are not shut. David Kriegman, president of TechTeam Government Solutions Inc., Chantilly, Va. (VARBusiness 500 No. 162), the federal contracting arm of TechTeam Global, discusses how his company is taking its expertise in commercial solutions and parlaying it with success in the government arena.

VB: Why did you make the move to TechTeam over the summer?

KRIEGMAN: One of the main reasons that I was attracted to TechTeam was the combination of government with commercial best practices. I saw a tremendous opportunity to take best practices and put them to use in the government sector.

VB: Is it tough being the new guy?

KRIEGMAN: It's been much easier than I thought. It's been very comfortable for me. I work with a great group of people with a great collaborative culture. For example, I joined in the beginning of August, and had a strategy meeting at the end of September. I had a month to get a plan together, but it was enough time because of the collaboration of folks.

VB: TechTeam has had impressive growth of 32.8 percent year- over-year. Despite a gloomy economic outlook for 2009 overall, the government sector appears to be a bright spot. Why is that?

KRIEGMAN: The government is still spending on infrastructure, because the government still has to operate. For example, contact centers servicing the city and internal departments have to continue and be efficient. They need to offer the same services for less money. We can take what we learned on the commercial side and apply that to the government side.

VB: Can it work the other way around as well? Government learning from commercial?

KRIEGMAN: Yes, for example, supply chain modeling simulation, which allows you to see the effects of things before you do them. Prior to 9/11, the auto industry used just-in-time logistics. The auto companies were getting supplies from Canada as they needed them. After 9/11, just-in-time was not working, as borders were closed. Modeling was applied to that to see how the change in any one part of supply chain impacted the rest of the chain. The industry learned how to still have an effective supply chain. We can apply that same reasoning to military auto development and armament. We acquired New Vectors LLC [Chantilly, Va.] [which specializes in supply chain engineering and modeling, simulation and optimization decision aids] a year ago and it's now a division of TT.

VB: Has government spending slowed at all? We're hearing that for those in the government sector, spending may slow down for next year, but this year they're riding out existing contracts.

KRIEGMAN: I'm not sure, though, if that's solely because of the economy, or due to the political situation of it being an election year. The war on terrorism, the war in Iraq, those things have affected discretionary dollars. But it really hasn't touched civil agencies ... The biggest effect of the current economic situation is on employees, worried about their 401(k)s. That impacts business.

VB: What's the biggest challenge facing you in the next 6 months?

KRIEGMAN: The midtier squeeze. Companies under $1 billion are facing a challenge because large companies are bidding everything out and there's more competition than ever. We've focused on differentiating ourselves, which allows us to compete effectively. Our biggest challenge is getting the word out and refining our offerings. [We're] working quite a bit on that definition: We're not like everybody else. The integration of best commercial practices into government is one of those. Modeling and simulation is another. Those are real reasons for midtier customers to come to us.