Georgia Tech Procurement Assistance Center

  • Home
  • About Us
  • Training
    • Class Registration
    • On-demand Training
    • GTPAC COVID-19 Resource Page
    • Veterans Verification Video
    • Other Training Audio & Video
  • Useful Links
  • Team Directory
    • Albany Counselor
    • Atlanta Counselors
    • Augusta Counselor
    • Carrollton Counselor
    • Columbus Counselor
    • Gainesville Counselor
    • Savannah Counselor
    • Warner Robins Counselor
  • Directions
    • Atlanta – Training Facility
    • Atlanta – Office
    • Albany
    • Augusta
    • Carrollton
    • Columbus
    • Gainesville
    • Savannah
    • Warner Robins
  • COVID-19
  • New Client Application
  • Contact Us

Federal pay freeze: Why it matters to contractors

February 25, 2011 By ei2admin

The President has proposed a two-year pay freeze for federal employees; the House of Representatives wants to extend that to five years. Others have proposed legislation that would freeze federal hiring all together. “The government is bloated and too big” goes the conventional wisdom. If you’re a government contractor that “wisdom” could have a profound negative impact on your government business.

Let’s start at the top. Say you’re a company that wants to get a government contract. Be prepared to stand in line. A hiring freeze would mean that the already stretched-thin acquisition workforce will likely get thinner. There will be fewer people (likely with less overall experience) to handle your offer.

Even a pay freeze would impact your business, as qualified acquisition professionals look elsewhere for jobs and those that do remain could have morale issues.

Let’s say your company already has a government contract. Monday, your firm announces a new hot product. You’ve been told that you must get this on your company’s federal contract – fast. Well, not so fast. Fewer acquisition professionals, or even the same amount as we have now, means that there is little ability for the government to move quickly to modify existing contracts. If government customers want your product they will have to take the extra steps necessary to buy it on the open market, a time-consuming process not favored by overworked government contracting officers.

“I’m in sales,” you say? Let’s take a look at the impact of a pay or hiring freeze on your business. There may be good and bad here, depending on what you’re selling.

For product-oriented companies, a static or shrinking federal workforce means that there will generally be less need for the product’s you’re selling, particularly in a tight budget climate. Fewer people mean fewer chairs, desks, real estate, paper, etc. To survive, you must ensure that your efficiency and value propositions literally jump off the page. It must be crystal clear how spending money with you will save the government money overall.

Service providers might have it slightly better. The government will still be expected to meet many missions, and if there aren’t enough federal workers to fill the need, this could translate into increased opportunities for service providers. You certainly have to deal with the same tight budgets that everyone else has to, so I wouldn’t start predicting year-over-year sales jumps. Still, with House Republicans resuscitating competitive sourcing (which allows contractors to bid against government for work currently conducted by federal employees), and continuing public demand for federal services, you have an opportunity to place people where they’re needed most. Added bonus: It might be easier to pick up qualified “frozen” federal workers to perform those tasks if you can offer competitive compensation and the prospect of a pay “thaw.”

The bottom line for contractors: When federal workers are frozen, you’ll feel the chill too.

— by Larry Allen – Washington Business Journal – February 23, 2011

Read more: Federal pay freeze: Why it matters | Washington Business Journal

Filed Under: Contracting News Tagged With: budget cuts, federal contracting

Recent Posts

  • OMB releases guidance related to small business goals
  • Are verbal agreements good enough for government contractors?
  • OMB issues guidance on impact of injunction on government contractor vaccine mandate
  • CMMC 2.0 simplifies requirements but raises risks for government contractors
  • OFCCP launches contractor portal initiating AAP verification program

Popular Topics

8(a) abuse Army bid protest budget budget cuts certification construction contract awards contracting opportunities cybersecurity DoD DOJ False Claims Act FAR federal contracting federal contracts fraud GAO Georgia Tech government contracting government contract training government trends GSA GSA Schedule GTPAC HUBZone innovation IT Justice Dept. marketing NDAA OMB SBA SDVOSB set-aside small business small business goals spending subcontracting technology VA veteran owned business VOSB wosb

Contracting News

OMB releases guidance related to small business goals

OMB issues guidance on impact of injunction on government contractor vaccine mandate

Changes coming to DOD’s Cybersecurity Maturity Model Certification under CMMC 2.0

Judge issues nationwide injunction halting enforcement of COVID-19 vaccine mandate

Nondisplacement of qualified workers is back, but with changes

Read More

Contracting Tips

Are verbal agreements good enough for government contractors?

CMMC 2.0 simplifies requirements but raises risks for government contractors

OFCCP launches contractor portal initiating AAP verification program

GAO rules that DoD may not require small business Joint Venture itself hold facility security clearance

Terminations for convenience clauses vs. mutual termination clauses

Read More

GTPAC News

VA direct access program events in 2022

Sandia National Laboratories seeks small business suppliers

Navy OSBP hosting DCAA overview (part 2) event Jan. 12, 2022

Navy OSBP hosting cybersecurity “ask me anything” event Dec. 16th

State of Georgia hosting supplier systems training on January 26, 2022

Read More

Georgia Tech News

Undergraduate enrollment growth reflects inclusive excellence

Georgia Tech delivers $4 billion in economic impact to the State of Georgia

Georgia Tech awards first round of seed grants to support team-based research

Georgia Tech announces inaugural Associate Vice President of Corporate Engagement

DoD funds Georgia Tech to enhance U.S. hypersonics capabilities

Read More

  • SAM.gov registration is free, and help with SAM is free, too
APTAC RSS Twitter GTPAC - 30th Year of Service

Copyright © 2022 · Georgia Tech - Enterprise Innovation Institute