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7 months ago · by · 0 comments

Will the Federal Hiring Freeze Affect Government Contractors?

If you rely on government contracts for your work, then you probably have some questions about the federal hiring freeze. Namely: Is it good or bad for contractors?

The answer: it remains to be seen, but probably not. It may well turn out to be a boon for contractors. Bridges still need to be built, and by freezing the hiring of salaried government employees, the government will be forced to find somebody to put the work in, and more often than not, that’s going to be contractors.

Furthermore, a lot of the work that we do in government contracting is not federal work, rather, we’re being hired by cities, by the state department and so on. We’re being paid on state funds to do state work, rather than being hired for federal work by the federal government. The federal government does pay for construction work as needed, of course, but most contractors are not waiting for these jobs. Most contractors are working locally, and being paid by local government.

Additionally, the executive order putting a freeze on federal hiring comes with a lot of exceptions. Just to name a few examples, the freeze does not apply to the post office, industry exchange programs, intelligence agencies, or seasonal employment. The list of exceptions is only getting longer every day, as these exceptions have been clarified over time.

Finally, while President Trump has issued a statement saying that government organizations shall not be permitted to use contractors to work around federal hiring freezes, this statement was issued in a memo, not in binding law.

At some point in the future, the federal hiring freeze may extend to contractors, but for the time being, it may actually be giving contractors greater bargaining power. A year ago, a government contractor was usually being pursued for one of two reasons: Either they possess specialized knowledge, training or abilities that the government is in need of, such as underwater welding, or they’re cheaper than paying a salaried, year-round government employee. Now, government contractors will be the first choice, over federal employees, for many jobs, creating more opportunities for contractors, and, in many instances, allowing contractors to command a higher rate of pay.

Whether or not you agree with President Trump’s attempt to curb government spending via the federal hiring freeze, the bottom line is that, at least for the time being, it’s nothing for government-contracted workers to worry about.

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