.gov sub-contract company switch question

Ok, guys w/ a lot of .gov contracting experience, I want to pick your brains since I am very green in this world.

My particular agency's current contractor lost the bid when the contract was up for renewal. Another company is taking over. I am an employee of a sub-contractor.

Current sub-contract companies are unlikely to be retained, with sub-contracted employees shifting to a new group of companies that the primary has chosen. According to my company's lead for this contract, the new company has stated that employee salaries will not change/will be comparable. They do not plan to get rid of us workers, just upper management. There is still a small chance my company will be able to jump over to the new contract, though this is unlikely.

Today, my company lead called and said he wants to bump my pay from $X to $X+Y annually. Obviously, that only holds until I get forced into switching companies. I assume he has done this to give me wiggle room for negotiating with whatever company I get assigned.

Now that you have the background, given the statement by the new contractor company that salaries will stay the same or be comparable (whatever that means), what do you think is the likelihood of me keeping the new salary @ $(X+Y)? Or, do you think my current company did this to allow us wiggle room/stick it to the company to whom we will be assigned, and force them into offering more than $X or at least keeping me at $X.

Being my first foray into the world of being a sub-contractor employee during a contract changing hands, I'd really appreciate feedback on what to expect, how much room I have to haggle salary with the new company given this recent change, etc.

Obviously, the new company could say, "here's your $W and if you don't like it then get out," so I know that's a possibility too.

I don't know much about .gov contracting. I do know a lot about IT contracting in the private sector.

If I had to guess I would say the +Y bump was to keep you from jumping ship early to keep the sub attractive in hopes of getting picked up on the new contract. What that means if you have to move over probably depends on how well you negotiate. They tipped their hand in a way; you now know you are valuable.

I'm used to hearing "we can find anyone to sit in the chair." When I've played hardball after that, I usually get a call back for the rate I've requested. In my space most consultancies are almost shell companies. They exist on the margin between client billable and my rate providing zero value to the client. The owners don't do anything and the engagement managers are often incompetent.

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Originally Posted by CavSct1983

Ok, guys w/ a lot of .gov contracting experience, I want to pick your brains since I am very green in this world.

My particular agency's current contractor lost the bid when the contract was up for renewal. Another company is taking over. I am an employee of a sub-contractor.

Current sub-contract companies are unlikely to be retained, with sub-contracted employees shifting to a new group of companies that the primary has chosen. According to my company's lead for this contract, the new company has stated that employee salaries will not change/will be comparable. They do not plan to get rid of us workers, just upper management. There is still a small chance my company will be able to jump over to the new contract, though this is unlikely.

Today, my company lead called and said he wants to bump my pay from $X to $X+Y annually. Obviously, that only holds until I get forced into switching companies. I assume he has done this to give me wiggle room for negotiating with whatever company I get assigned.

Now that you have the background, given the statement by the new contractor company that salaries will stay the same or be comparable (whatever that means), what do you think is the likelihood of me keeping the new salary @ $(X+Y)? Or, do you think my current company did this to allow us wiggle room/stick it to the company to whom we will be assigned, and force them into offering more than $X or at least keeping me at $X.

Being my first foray into the world of being a sub-contractor employee during a contract changing hands, I'd really appreciate feedback on what to expect, how much room I have to haggle salary with the new company given this recent change, etc.

Obviously, the new company could say, "here's your $W and if you don't like it then get out," so I know that's a possibility too.

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So much to write here - but little time. In short, it depends on the language of the new contract. In some cases there is a clause that mandates that labor cats (e.g. wage rates) will not be affected, in some cases that language is not there. Further, it depends on whether or not it is a FFP contract or Cost Plus - or something else. If it is cost plus, then you are generally going to get the same wage that you had before. If it is a FFP - then the new contractor will be looking to scrape every last penny they can get and everyone should generally worry. ;) The other thing to look at is whether the contract has shrinking costs built in - if so you may be in for a squeeze.

Take the X+Y now, negotiate with the new prime and see what happens. All that said, people with tickets keep jobs in this market. You may have to take a pay reduction to keep said job if you do something very generic. But if you have any skills whatsoever, then you're not going to be unemployed any time soon.

The $X+Y can also be used by your current company to bill and burn remaining funds. Your +Y also means the company receives a raise as they take a percentage of the rate the .gov is paying for your services.

Having seen this situation many times, there is no concrete answer as far as salary - anywhere from -30% to +10%. However, getting picked up by the new company is probably greater than 90% probability.

Unfortunately, I have only witnessed once where the new salary was negotiable.

ETA: Now is a good time to go ahead and look for another job. It's that time of year in the cycle where a lot of contracts are coming on. You can always fall back on the position you're in if you don't find a better offer.

Whenever we my company bid on a new contract, we always took a certain pay cut. That's how they won the contract, they outbid the competition. In regards to the next company keeping you, depending on the line of work you just transition over to them. This was for govt. security type work though. When it gets complex in intelligence, computers, data, it can go either way; they can transition the other companies employees into the new company or they can be replaced by the new companies current workers. Always good to have other options in case the work is no longer there. That's how I always expected it as the job was very insecure.

What's the minimum prescribed Gov wage for your position / title? Anywhere above that is wiggle room (that's what the company makes off you)

Good luck man I dealt with that crap for almost 10 years and ultimately they'll tell you if you don't like the offer than there's the door. Goodbye Seneriority, Vac, Sick, Misc PTO.
During the transition watch a few things like your Job Description, 401k, healthcare, because most likely you'll be having to change all that to whatever the new company offers. So until you receive the offer letter don't believe shit, if it's not in writing it's just speculation.

They told us in 2012 if we didn't like it we could walk. We were just "shooters" and were easily replaced. They quickly retracted those statements as there was a mass exodus of people leaving and they were getting fined for not maintaining the TO of the contract.

Well let's see.

I was working for a company that had a contract with the USDA, they lost the contract renewal to a company that way under bid.

The new company made "offers" to all but 2 staff, most were 10-15% lower than what they had been making, my offer was about 20% less.

They wanted us to work on other contracts as well, plus they did not match the benefits or vacation.

I have worked as a contractor many times over the years and have never seen this type of crap before, both gov and private sector. Until now I had always gotten the same or better switching over.

This occurred the end of Feb, I just got an offer and am waiting for the background check to start my new job.

BTW if the company that won the contract is InquisitLLC, find another job, even if they make you an offer you will hate them

Thank you for the replies so far.

Some quick points which may change answers (or cause the experienced guys to chuckle and pat me on the head in my naivete):

* New company apparently did not underbid according to my company lead. The .gov actually raised the project budget for this renewal.

* New prime company is not a small one, and apparently has a good reputation for pay -- not sure how that extends to their sub-contracted companies.

* By the time I'd need to look for a new job, if I do, I'll have the CCNA and will only be a few classes shy of a Bachelors. I'd think this would set me apart from my peers, as I'm already one of the few on my team with an Associates and I have several certifications which diversify my appeal. However, I don't have tier 3 experience and am merely ready to jump into that sphere. A desperate sys admin/engineer could easily fill a role into which I'd otherwise be a good candidate.

* I'm 95% sure I'm about to jump into a higher level job on a smaller team with more appeal, and that team may be moving to another contract and my current company is a sub for the primary who will likely win it. Just waiting for staffing to release the job, and the manager has been pursuing me for a month+ to get me on.

Negatives:

* I'm potentially a dangerous person to retain because I do make so much and I do have more ease of jumping. I'm less in a corner than my other teammates and stand out in my production, both in quantity and quality. If they replace me with two mediocre people, they could pay each of them 50% less and increase the quantity of production in those two by maybe 10% over my production as a single tech. Individually, they'd not be much more than leeches. Together they might represent a bottom line which a bean counter would find appealing.

* The new prime might say one thing now, which sounds good, but then when they come in they could totally shake things up in an effort to remediate an improper bid on their part.

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Originally Posted by CavSct1983

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* I'm 95% sure I'm about to jump into a higher level job on a smaller team with more appeal, and that team may be moving to another contract and my current company is a sub for the primary who will likely win it. Just waiting for staffing to release the job, and the manager has been pursuing me for a month+ to get me on.

[snip]

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[youdontsay.jpg]

If you negotiate with the new sub, you now have something to negotiate with. Having something with $x means you aren't talking hypotheticals (assuming this shakes out).

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Originally Posted by CavSct1983

[snip]

Negatives:

* I'm potentially a dangerous person to retain because I do make so much and I do have more ease of jumping. I'm less in a corner than my other teammates and stand out in my production, both in quantity and quality. If they replace me with two mediocre people, they could pay each of them 50% less and increase the quantity of production in those two by maybe 10% over my production as a single tech. Individually, they'd not be much more than leeches. Together they might represent a bottom line which a bean counter would find appealing.

* The new prime might say one thing now, which sounds good, but then when they come in they could totally shake things up in an effort to remediate an improper bid on their part.

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Don't be your own enemy. They wouldn't have volunteered +Y is there wasn't value.

What you've got above can be said about nearly any worker in any field. The problem is those people don't consistently bring experience or results. So it's not really 50% + 50% = 110%. Your employer would be gambling while you are a known quantity. The cost of recruitment + training can easily offset multiple years of cost savings as well.

If a time comes to take a pay cut to stay safe, so be it. But if you have people offering you more now, you need to take it to maximize your earning potential. And assume you could always do better than what is offered (unless you have tested the upper boundaries).

Put the +Y in a savings account (CD) in case you get cut (assuming you don't have a cushion already).

Oh yeah, they thought they could replace me at a lower cost, LOL, they have still not replaced me and now the client is starting to lose patience with them over not providing the support they contracted to supply.

Rumors fly, just be sure you have an exit plan in place if you end up not being brought over.

I had a lot of action from head hunters, but nothing solid, which turned into 6 months of unemployment. That sucked, 5 kids one of which is starting college, another got married.

Being a contractor sucks at times, this is one of those times

Some updates:

The primary contract company has assured people in their "town hall" meetings that salaries will not be lowered, and could even go up depending on various factors.

They are 99.9% sure they are not bringing on any of the current sub-contractor companies, so I will likely be switching companies but apparently keeping my current salary (including the raise). They have said they bid with a team of partners in mind and their success projections depend on that model being followed. Further, the ability to keep salaries the same in the transition depends on that. Not quite sure what that has to do with the price of tea in China, but I'm not a businessman.

The switch to whatever company is not for ~ 6 months, so as long as I don't go all nouveau riche, I should be able to put away some good savings if there is a month or two lull.

We have until a certain date to apply for our current jobs/higher level and are guaranteed to be taken on board. We might even be able to bump up in position despite lacking qualification, if we submit a cover letter stating what we are doing to reach a more qualified status. If we fail to apply by the deadline, we go into the pool of external candidates.

All of this sounds very good, which is what worries me. Perhaps it's par for the course and they're not lying. I dunno.

As a .gov contractor it is not too often I see a reduction in pay in these situations... But a change in benefits is what I see happen most of the time. The "new" company may have different and sometimes less to offer on the benefit side. You may even get a raise but at the cost of losing other benefits. Reduced paid leave, educational assistance, reduced retirement/401K etc., etc. just different policies and philosophies in general. Those are some of the questions I would be asking.


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The new prime will have to strike a balance between controlling costs and capturing key/critical talent. If there is not key/critical talent (e.g., anyone can swing a pickaxe or empty a trash bin), then controlling costs is the strongest factor and they would be less inclined to offer you the new pay raise. If you are somewhat unique and offer value that other potential employees don't then capture rate is the strongest factor and they'll likely offer you the raised salary (and perhaps more) to keep you in place and look somewhere else to control costs. From what you've described, I'd take the X+Y now and use that as the starting point of any negotiations with the new prime. There is always room to jump to another company later if you don't like the new circumstances, just avoid any non-compete clauses ... ;-)

Got offer late last night (read this morning). Bump in pay from an already obscene amount. Highest bump out of anyone on my team. Guessing due to solid resume/cover letter, certifications and pending Bachelors graduation. Guess they liked what they saw on paper and in HR interview (probably didn't hurt that my interviewer was a retired EOD NCO and we talked about Iraq for most of the interview).

Everyone else either got same pay or small bump.

Good job and congratulations!

Nicely done! Every time I've seen people transition from the sub to the prime they come out ahead in salary, and typically benefits as well. I'm happy it worked out for you that way!

Thanks guys. Just ran some numbers. Since getting my first formal IT job 2 years ago, and working fwd to calc for the pay increase when the contract switches, I'll have jumped salary brackets in a total of 2.5 years to make it a difference which is higher than my first salary starting out.

Example (not actual numbers)
1st job - 20k
current - 40k
upcoming - 44k

difference of +24k

That's... insane. Glad I stopped the lib arts courses and followed vectorsc's advice.

Me, 3.5 years ago :"vectorsc, you're successful and usually have good advice. I think I'm gonna marry her. Need more $. What do I do?"
Vectorsc: "Get into IT."
Me: "OK"

Yeah, you're just getting started. ;-) I made moves like that when I was getting started. Congrats on your advancement!

Keep it up and gain as much experience as you can. Experience is worth more than certs. Certs say I know about this technology, but experience says I can really use this technology and implement it to improve your business. Think about it in the professional sports spectrum; Would you hire someone with a baseball glove manufacturer's certification (where they make money on the courses and tests) or would you hire someone with a proven track record of being a paid professional ball player?

I never finished college and have never held a cert, but I have a career. Never stop learning and push yourself by taking on tasks that may be out of your comfort zone and then hit them out of the park. Your employer will notice (puts you at the top of the worker pool for raises/promotions) and you win by gaining more knowledge that you can apply to your career (resume enhancer).

Definitely looking to increase experience. Getting BS to satisfy the HR monkeys who think degrees mean something (I personally don't see any value in a degree, but I'll play the game). Getting certs to get a chance to gain the experience. I tend to get assigned a lot of special projects and often get great feedback from the engineers and project champions, so that's always encouraging.

If you're young enough, do get that degree. I'd like to get mine, but at my age and today's tuition rates, I'll never recover the expense. I'm better off putting that money into my retirement. We're still paying for the wife's student loans.

Hopefully only 6 months or so left to graduate. Came into it w/ an Associates which cut a lot of time off.

Should check out WGU. Chad Amberg just graduated from there recently. Very affordable. At your own pace. Competency based. Accredited. I've been pleased.