Huntsville, Alabama, has long represented a tantalizing market that always felt out of reach for many contractors. Over the last decade, this zip code has been a focal point of growing interest as it became home for many organizations that, on an annual basis, manage billions in contract spending. Based on the latest news, Huntsville's influence over the aviation, space, and missile enterprise will grow significantly in 2021.
Before we get into the excitement of this news, it is essential to understand the economic impact of Space Command. We will have a new administration in a few days, don't expect Denver to accept this decision without a fight. Starting with state and local governments and quickly escalating into Congress, the war is on to reverse this decision. While the chance of success is relatively low, it will likely create a significant distraction and leave the final decision in doubt.
If we assume that the protests fail and Space Command will soon call Huntsville home, what does that mean? Admittedly, Patrick, Peterson, and Schriever, and other Air Force Bases will still represent the Space Force's critical gravity centers. Nevertheless, decision-makers for Space Command, AMC, NASA, and many other agencies will promote Huntsville to a powerhouse in the contracting world.
With Space Command's move, "Rocket City" will attract greater interest from those who have yet to establish themselves in Huntsville.
There are few markets or customers that exist within GovCon that are easy to breach. However, Huntsville has proven to be more complicated than most; many see the difficulty of gaining traction there to be on par with the challenges found at Fort Meade, MD, or Springfield, Chantilly, and Langley in Virginia. This tight-knit community runs the spectrum from the small business with niche offerings to systems integrators, with the common thread being strong relationships with their customers. Due to Huntsville's localized environment, there is no shortage of former government personnel who have established companies or joined existing contractors, strengthening their connection with the mission and requirements.
In summary, relationships matter in Huntsville. You are either in the club or struggling to get noticed.
Once all the dust settles, if Space Command ends up relocating to Huntsville, a migration of contractors will follow. This shift in location will impact contractors in various ways, and those ripples could impact customer relationships. While the move will take time, head hunters and recruitment activities will likely increase as established Huntsville contractors look to court the new game in town. Leidos recently purchased Dynetics to increase their exposure to Huntsville customers, increased M&A activity in the region is likely to follow Space Command's arrival.
Space Command is an attractive customer, and the continued consolidation of the space enterprise in a central location increases the relevance of Huntsville. However, Space Force is not relocating, and as with any unified command, it is the service branch elements that execute on strategy and doctrine. Will Space Force contractors who have enjoyed their proximity to Space Command in Colorado decide to follow the herd, perhaps. It is important to remember that the Space Force and its various bases represent a significant majority of space enterprise spending. Yes, the move changes the landscape, but most spending for DoD space efforts is staying put.
Decisions in Huntsville will impact Space Force spending, and that may make getting to know your way around Huntsville a priority for anyone dedicated to supporting Space Force.
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