Founding a government contracting firm requires navigating a maze of compliance requirements, audit standards, and billing protocols that most startups in other industries never encounter. Margarita Howard walked into that maze in 2004 and immediately identified the one tool her company needed most: a proper accounting system.
An Investment Decision With Long-Term Consequences
Rather than spending on the cosmetic elements that might attract attention from outside observers, Howard put HX5’s limited early capital into an accounting platform purpose-built for government service contracting. The system served a specific function: it allowed the company to bill the federal government correctly, maintain proper cost segregation, and pass the audits that government contracts require.
For Margarita Howard, this was not a reluctant compliance investment. It was a deliberate competitive choice. The accounting system became proof that HX5 understood the operational demands of federal work proof that large prime contractors needed to see before they would consider partnering with a new small business.
Solving the Subcontractor Credibility Challenge
Prime contractors in the defense and government space needed small business subcontractors to satisfy set-aside requirements, but many qualified small firms lacked the administrative depth to handle complex billing or survive government audits. HX5’s infrastructure closed that gap. “So, that was also very attractive to large businesses, that we were very small at the time, and that we already had this government accounting system in place,” Howard noted.
That early infrastructure investment gave Margarita Howard‘s company access to partnership opportunities that typically take years to develop. HX5 eventually scaled to more than 1,000 employees operating across 34 states and 90 government locations, a trajectory made possible by Howard’s decision to build the foundation before seeking the growth. Visit this page for more information.
Find more information about Howard on https://www.itsecurityguru.org/2025/11/12/what-will-defense-contracting-look-like-in-10-years/