Federal contracting has a learning curve that catches many small businesses off guard. The billing requirements, cost accounting standards, audit expectations, and teaming arrangements that characterize government work demand administrative capabilities that most small firms do not build until they are forced to. Margarita Howard built them before HX5 had won any major contracts.
Her first significant investment was a specialized accounting system government reviewed, built for federal contractors, and familiar to the large defense firms that HX5 hoped to partner with. The cost was steep relative to what a startup would typically allocate to back-office tools. Howard considered it essential.
The Logic Behind the Investment
Howard’s reasoning was straightforward HX5 needed to be attractive to two audiences the government itself and the large prime contractors that could open doors to subcontracting work. Both audiences valued administrative readiness over flashy presentation.
“We knew the investments that we had to make to be successful, to compete and not wait on those sole sources, and be attractive to the government and large businesses to work with us,” Howard said. “And both highly paid off.”
The accounting system served as evidence of that readiness. For government auditors, it demonstrated proper cost accounting practices. For prime contractors, it removed the administrative burden of guiding an inexperienced subcontractor through billing and compliance requirements. For Margarita Howard and HX5, it opened a wider competitive field than most newly formed contractors could access.
Growth Built on the Right Foundations
HX5 today operates across more than 70 government locations in more than 20 states, with a workforce exceeding 1,000 employees. The company has won large prime contracts and been recognized for subcontracting excellence. Howard has spoken candidly about what made that growth possible.
“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,” she said. The lesson embedded in HX5’s history is one that Margarita Howard has articulated clearly: knowing what it takes to compete in government contracting, and building those capabilities before they are required, is what separates companies that grow from those that merely survive. Read this article for related information.
Find more information about Howard on https://m.doyoubuzz.com/margarita-howard
