Federal rules governing government contractors leave more room for delay than many small businesses realize. The Small Business Administration encourages new contractors to maintain compliant accounting systems, but it does not require any specific software. Formal adequacy standards come from federal acquisition regulations, which apply only to certain contract types, leaving many small firms to start simple and grow into more rigorous systems over time.

Margarita Howard, who founded HX5 in 2004, chose not to take that slower path. She purchased a government-approved accounting system almost immediately, well before the company had won its first major award.

Built For Federal Standards

The system Margarita Howard selected was already familiar to federal auditors and to large prime contractors, the two groups whose trust HX5 needed most in its earliest years. “It was more important for us that we invest in things like a high-end accounting system that was built and developed specifically for companies who work with the government, and was government reviewed and approved,” she said.

Implementing a system like this requires more than a purchase. It demands training, process changes, and ongoing expertise that many small businesses lack in their first years. Margarita Howard has acknowledged the cost was real, but she has also pointed to a clear return on it.

“This is what we used to bill the government,” Howard said. “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, which those large businesses had.”

That early compliance work became a foundation for everything HX5 built afterward. The company now employs more than 1,000 people across more than 20 states, operates as both a prime contractor and subcontractor, and has been recognized as Prime Subcontractor of the Year, outcomes Howard connects directly back to a decision most new contractors postpone. Visit this page for more information.

Learn more about HX5 on https://ritzherald.com/ceo-margarita-howards-background-shapes-hx5-approach-to-veteran-employment/