In February 2018, PricewaterhouseCoopers’ (PwC) U.S. Public Sector business was acquired by the private equity investment firm Veritas Capital. The business now operates as a standalone Vertitas company under the name of “Guidehouse”, and reported approximately 7,000 employees in FY2019.
Staying true to its origins, Guidehouse provides business management consulting and financial advisory services for primarily federal, state, and local government customers. However, over the past two years, Guidehouse has had some major contract losses and major gains that are steadily changing the identify of its federal portfolio.
What is Guidehouse?
Guidehouse operates as a partnership which fall under distinct industry and sectors. The company is organized under Financial Services, National Security, Defense, Healthcare, Life Sciences, Public Health, Energy, Sustainability, and Infrastructure (ESI), and State and Local Government sectors.
In 2020, company brought on several new directors to support both commercial and government facing sectors, including:
- Joshua Myers, Director of Guidehouse Public Health Division (joined March 2020)
- Robyn Link, Director of Energy, Sustainability, and Infrastructure (ESI) segment (joined April 2020)
- Roy Pratt, Director for Utilities & Energy Companies IT/OT Delivery (joined April 2020)
While the above hires come from industry and commercial backgrounds, Guidehouse has also made several key government pick-ups, including several DoD-focused additions to the leadership team in 2019:
- Mike Hoskin, Director of Defense Sector, Army Portfolio – Retired Director of Contracting for the U.S. Army Corps of Engineers (USACE). He is also a retired Brigadier General and former Acting Deputy Assistant Secretary of the Army for Procurement (DASA(P)).
- Rich Wilson, Director of Health Segment – Retired Defense Health Agency (DHA) Chief of the Solution Delivery Division. He was also the Chief Medical Information Officer and the Chief Information Officer for Army Medicine.
- Marianne Bailey, Technology Director, leading Advanced Solutions Cybersecurity Practice – Retired National Security Agency (NSA) Deputy National Manager.
Core Federal Customers
Even after the split from PwC, the company still retains a healthy portfolio across both the U.S. Department of Defense and Federal Civilian customer groups.
Figure 1 – Guidehouse’s top 10 federal customers by prime contract obligation over the past five fiscal years.
Source: USAspending.gov
While the above chart gives us a good sense of the company’s legacy customers, this may not reflect their future portfolio. Guidehouse has had some defining wins and losses since its split from PwC in 2018, as seen in the graph below.
Figure 2 – Guidehouse’s prime contract obligations over time, FY15-19
Source: USAspending.gov
Expanding some details from Figure 2, we have some noteworthy contract wins and history.
- Legacy U.S. Air Force Financial Improvement and Audit Readiness (FIAR) contract was a loss in April 2018, Guidehouse to Deloitte. This was a major foundational aspect of their federal contract portfolio. Note the precipitous drop in funded work with the U.S. Air Force in Figure 2.
- The U.S. Department of Veterans Affairs (VA) $110M Market Area Health System Optimization Consultation BPA award in November 2018 has helped Guidehouse make up for some of the FIAR losses. Their VA backlog has been further strengthened by several 2018 and 2019 order awards under the $125M Community Care Choice Program Training and Program Management BPA.
- In September 2018, Guidehouse won two orders on the U.S. Department of Homeland Security (DHS) Chief Financial Officer (CFO) Assessment of Internal Controls Support Services (AICSS) BPA worth $45M.
- Guidehouse has had some steady success winning orders on the $45M National Institutes for Health (NIH) Business and Professional Support Services II BPA since winning the vehicle in January 2019.
- Guidehouse has maintained their base providing support for U.S. Transportation Command (USTRANSCOM) with the award of the $20M Comprehensive Financial Services Support. This may help them maintain their footprint with the customer as the their $28M Total Distribution Process Improvement (TDPI) contract which expires in September 2020.
Recently, Guidehouse has refreshed their contracts portfolio with some wins such as:
- In March 2020, the Government National Mortgage Association (Ginnie Mae) awarded Guidehouse a seat on a Software development services BPA that provides Ginnie Mae with securitization platform modernization and robotic process automation integration for critical business operations.
- Also awarded in March 2020, the 10-year, $150M U.S. Department of State, Bureau of Diplomatic Security, Identity Management Services Acquisition Program IDIQ. This represents new work for the company, and a fresh win with the Bureau of Diplomatic Security customer.
The acquisition of Navigant – a big acquisition with little impact in the GovCon domain?
In October 2019, Guidehouse completed the $1.1 billion acquisition of Navigant Consulting. This acquisition expanded, their depth in life science, healthcare and energy consulting. While Navigant has had federal contract work in the past, it has not had any noteworthy prime federal work in the past five fiscal years.
Navigant’s core service sectors were healthcare, energy, and financial services, and the company brings additional depth in advisory, consulting, outsourcing, and technology/analytics services specific to these domains. This includes data hosting and processing, and technology-driven business process management services for rapid business environment transformation.
The FedSavvy Strategies take on Guidehouse
- Guidehouse’s federal portfolio is changing – This is partially due to recompete misfortunes in the Air Force and partially through new customer breakthroughs in the Federal Civilian space.
- Many of Guidehouse’s new wins reflect a move towards program management and IT modernization related work – a step away from their legacy as a financial advisory company. The company’s workforce at-a-glance indicates a highly educated >7,000 person workforce (with 38% of employees holding advanced degrees) employee base that aligns well with the company’s business management and advisory portfolio.
- The acquisition of Navigant does not bring much of immediate impact to the GovCon aspect of Guidehouse. However, it adds depth in the healthcare and life sciences expertise. Navigant also added expertise in business process management services. We may see them leverage this to compete more aggressively within their existing customers such as Centers for Medicare and Medicaid Services (CMS), Defense Health Agency (DHA), and National Institutes for Health (NIH).
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