HX5 CEO Margarita Howard on the Government Employee to Contractor Pipeline

When the Government Accountability Office examined how former DoD officials move into contractor roles, it found 1,718 former senior military and civilian officials across 14 large firms — drawn from roughly 100,660 who had departed the department over six years. That was 2021.

The Pentagon’s Deferred Resignation Program has since approved more than 55,000 voluntary departures in fiscal year 2025, with an additional 6,100 exiting through early retirement authority. Executive Order 14210 compounded the effect by mandating one new hire for every four vacated positions.

The defense and aerospace contractor HX5 has grown from a single person firm in 2004 into a firm now operating across more than 20 states at approximately 70 government locations, with approximately 1,000 employees supporting the Department of Defense and NASA in research and development, engineering, IT, and mission operations. It’s one of several mid-sized contractors navigating the new environment, and its strategy speaks to several broader industry trends.

In Transition

When agencies offered voluntary early retirement, seniority thresholds meant that the most experienced acquisition officers, contracting specialists, and program managers had the greatest eligibility, and the greatest outside marketability. As described in an April 2025 Covington & Burling analysis by attorneys Scott A. Freling and Homer La Rue, agencies lost exactly the employees they most wanted to retain.

Space Force Chief of Space Operations Gen. Chance Saltzman described the damage directly: “The corporate knowledge — the expertise that our civilian workforce brings — is vital to acquisitions, and so the Deferred Resignation Program certainly took some of those out of play.” Space Systems Command reported civilian losses above 10% in some functional areas.

Geopolitical analyst Irina Tsukerman, president of Scarab Rising, was more specific: “Buyouts and early retirements stripped out corporate memory in acquisition commands and depots. That is where independent cost estimates, configuration control, and risk burn-down live. When those functions thin out, schedule credibility becomes a guess.”

Margarita Howard on What Government Experience Transfers

Margarita Howard uses a specific term for the hire that defense contractors spend years trying to find: the “purple unicorn” — someone who holds an active security clearance, carries advanced STEM credentials, and has spent meaningful time inside a government program. Three requirements, each limiting on its own, become exponentially more difficult to find in combination.

Approximately 2 million Americans hold active security clearances, against an estimated 500,000 to 700,000 open cleared positions, and 92% of cleared professionals are already employed. A candidate who combines an advanced degree, an active clearance, and direct government program experience remains scarce regardless of current market conditions.

“Our focus is professional support services in research and development and in specialty areas, primarily the STEM fields of science, technology, engineering, and math,” Howard said. “Across the DoD and NASA, those are the specialties that make up our primary workforce. They have to have advanced education.”

HX5’s Model: Strategic Integration Over Speed

In 2021 HX5 became a partner in the Hiring Our Heroes Corporate Fellowship Program, in which transitioning service members are placed with employers in a structured fellowship before separating from active duty; HX5 has hosted fellows at a rate of two per year since joining. More than 30% of the company’s employees are veterans, and the Department of Labor recognized those practices with a 2025 HIRE Vets Gold Medallion Award.

The firm’s approach to hiring veterans is built more on establishing solid relationships and networks with qualified applicants than it is about quickly trying to fill positions. The goal is to cultivate a culture built around those, like many veterans, who genuinely value the kind of work that contractors provide for government agencies.

“You have to get up in the morning and be excited about the particular program you’re supporting,” Howard said. “Let’s get to the moon, let’s accomplish this mission overseas.”