.gov sub-contract company switch question

[CS1983]

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.

[Skip]

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.

[asmo]

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.

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.

[davsel]

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.

[Shooter45]

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.

[Mazin]

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.

[Shooter45]

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.

[thedave1164]

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

[CS1983]

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.

[Skip]

[snip]

* 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]

[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).

[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.

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).