Margarita Howard’s Early Investment Philosophy: Building HX5’s Infrastructure Before Growth

When most entrepreneurs launch government contracting firms, they focus on securing office space and establishing a professional appearance. Margarita Howard took a different approach when founding HX5 in 2004, prioritizing operational infrastructure over aesthetic considerations. This foundational philosophy shaped the company’s trajectory from startup to a contractor employing over 1,000 people across 34 states and 90 government locations.

Margarita Howard’s investment priorities reflected her understanding that government contracting success required specialized capabilities from day one. Rather than pursuing traditional startup expenditures, she directed resources toward systems that would establish immediate credibility with federal agencies and prime contractors.

“Right from the beginning, we invested heavily upfront in purchasing and implementing a specialized accounting system developed for government service contracting firms,” Howard explains. “A system we knew the government was very familiar with and that would provide us the necessary accounting tools to pass government billing audits and gain government approval for use in the performance of our government contracts.”

Margarita Howard’s Strategic Infrastructure Over Superficial Assets

Margarita Howard’s infrastructure-first approach contrasted sharply with conventional business development practices. While many contractors focused on creating impressive office environments, HX5 channeled capital into operational systems that directly supported contract performance and compliance requirements.

The decision to prioritize functional infrastructure over appearances reflected Howard’s military background and experience within federal contracting environments. She recognized that government agencies and prime contractors valued operational competence above superficial business presentations.

This approach created immediate competitive advantages for HX5. The specialized accounting system eliminated barriers that typically prevent new contractors from competing effectively, while demonstrating the company’s commitment to compliance and professional standards.

Building Credibility Through Operational Excellence

Margarita Howard’s infrastructure investments yielded returns beyond operational efficiency. The specialized systems established HX5’s credibility with potential partners and clients who required assurance of the company’s administrative capabilities.

“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 that those large businesses had,” Howard notes.

The accounting system became a differentiating factor when pursuing subcontracting opportunities with established prime contractors. Large companies seeking qualified small business partners could rely on HX5’s proven financial infrastructure rather than providing extensive oversight or training.

This credibility extended to government agencies evaluating potential contractors. Federal procurement officials recognized HX5’s commitment to proper documentation and audit readiness, factors that influenced contract award decisions and ongoing relationship development.

HX5’s Long-Term Vision Over Short-Term Comfort

Margarita Howard’s infrastructure philosophy required accepting immediate sacrifices for future advantages. The specialized accounting system represented significant upfront costs that many startup contractors would consider prohibitive or unnecessary.

“Those were investments a company made that were very key in the beginning. And certainly the SBA, the Small Business Administration makes those recommendations, but they don’t force you. Yeah. And it was a risk that we took and it highly paid off,” Howard explains.

The investment philosophy extended beyond accounting systems to encompass comprehensive operational readiness. Margarita Howard prioritized capabilities that would support sustainable growth rather than creating impressive but functionally limited business environments.

This approach proved essential as HX5 expanded its contract portfolio across multiple federal agencies, including the Army, Navy, Air Force, NASA, and General Services Administration. The foundational systems established during the company’s early years provided the scalable infrastructure necessary to manage increasingly complex operations.

Margarita Howard’s early investment philosophy demonstrates how strategic resource allocation can create lasting competitive advantages in government contracting. Her focus on operational infrastructure over superficial assets enabled HX5 to establish credibility, build partnerships, and support sustainable growth throughout its development from startup to major federal contractor.