Q&A: Tom Romeo, President of Federal Services, MAXIMUS Inc., Discusses Business Growth in Challenging Budget Climate - (Archived)

It is no secret that government contractors are tremendously challenged when it comes to developing business growth strategies in today’s austere budget climate. However, seeking opportunities in adjacent markets can be the key to success, while providing the right services that support the mission, improving operating costs for government and best meeting citizen needs.

These are some of the key takeaways from a recent FedPulse interview with Tom Romeo, President of Federal Services at MAXIMUS Inc., who shared several insights he covered during his recent PSC Conference panel. Below is the full interview.

FedPulse: Tell us about MAXIMUS.

Romeo: We are a global contractor with 9,000 employees with 240 offices around the world. MAXIMUS has been in business for more than 40 years and we focus on providing health and human services programs to federal, state and local government agencies. The first point of contact in these programs are citizens, and our services run from supporting health insurance exchanges as part of today’s healthcare reform efforts to running Medicaid eligibility programs.

MAXIMUS is 100 percent focused on helping the government best serve citizens and we aim to provide services that also improve the overall operating costs. In the past fiscal year, MAXIMUS Federal has grown nearly 70 percent and we are poised to experience similar growth in FY 2014.

FedPulse: You recently spoke at the PSC Annual Conference about growth in adjacent markets. Tell us about what you covered in your presentation.

Romeo: One focus area of the discussion was in regard to how MAXIMUS has expanded internationally. The company has been very successful at applying our core competencies to expansion in the global marketplace. One example is the U.S. Welfare to Work employment programs we developed, where we were able to successfully bring similar programs to Canada, Australia and the United Kingdom. Our strategy has been to acquire companies in these regions and then instill the MAXIMUS mission around business processes in order to expand opportunities in these regions.

My role is President of MAXIMUS Federal, and in that role I have focused on expansion in the U.S. federal marketplace. To accomplish that expansion, we have developed opportunities at adjacent agencies based on our core competencies. A key principle in our expansion is bringing the best practices from our state work in health and human services and applying them to Federal agencies. An example of this is our work with the Social Security Administration, where we help beneficiaries with disabilities find sustainable employment. Other examples include Medicare appeals work at the Centers for Medicare & Medicaid Services (CMS), and a recent win helping students avoid default on their student loans for the Department of Education.

Another area of focus has been on program enrollment and eligibility – that type of work exists across the entire federal government. From helping with visa programs to Census efforts, we are seeing tremendous opportunities for citizen services that we think will only continue to grow.

FedPulse: What more should contractors be doing to seed potential business opportunities in these adjacent markets?

Romeo: I will give away some of the secret sauce.  Our success has been based on aligning ourselves with the government mission and then tying our compensation to our ability to meet certain measurable outcomes. For example, in some of our Welfare to Work programs, this means that our payment is based on our ability to actually find long-term employment opportunities for citizens and place them in a steady job they can keep. In other programs, the measurable outcome could be increasing enrollment for citizen services or processing a high volume of independent appeals.

This method for doing business allows us to be more focused, efficient and productive. Whereas many federal contracts are set up to pay for a specific number of people based on cost plus or time, we prefer contracts that tie payments to tangible outcomes that support the mission. It’s a significant shift in the traditional procurement structure.

FedPulse: With 2013 being a challenging year for contractors, how do you see things shaping up in 2014 for our community?

Romeo: There are definitely many uncertainties in the current budget climate. For incumbents, it will be significantly more difficult to win business with more competitors and a focus on lower price. If a government customer aligns a potential contract with the mission, they will look for the best value. We need to shift away from the LPTA mindset and focus on providing a true best value that helps the government be more effective.

FedPulse: Anything else to add?

Romeo: I would like to add that government agencies will continue to feel tremendous budget pressure. I urge agencies to shift their buying focus on getting the best value that is aligned with the mission.

In addition, as our nation is still dealing with an economic recovery, we will see the demand for government services increase and the right programs – whether healthcare, education or job-related – will be needed. The government will feel increasing pressure to serve its citizens more effectively, and those that can find opportunities to support growing adjacent markets are in the ideal position to best serve these agencies.

We would like to thank Tom for taking the time to speak with us. To learn more about MAXIMUS and its services for government, click here.

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