Federal Contractors losing jobs

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:1 contractor I know at State was laid off a month or two ago.

Yes, typically direct hire employees are cheaper in total cost than contractors, but they are getting rid of those too.

How is that possible with benefits, retirement, etc.?

Typical body shop contractor markup is maybe 80-100%. This means if contractor's direct employee has $x in pre-tax salary then government is charged (1.8 * x) to (2 * x) dollars.

The pass-thru markup typically is 8% to 10%. So for subcontractors who are 1099s (on the same contract) who get paid $x, the government gets charged (1.08 * x) to (1.1 * x) dollars.

Federal employees usually cost less than a direct employee of the contractor. For subcontractors who are 1099s, the subcontractors often are cheaper than civil service, but not always.

My part of the government is not in the budget. We are pure fee for service, so I have visibility into the fully burdened costs of a civil service employee.

Imagine if the federal government had the same system of appending a percentage of the total salaries and benefits of support staff and management to each FTE's hourly rate to get the true cost of a federal employee.

We do!! I have to report to Congress the total cost of my program yearly. I report benefits and overhead, not just salary.

[Anonymous]

Anonymous wrote:

Anonymous wrote:America is sucking balls.

Do you think it’s fiscally healthy to have the USG as the nation’s largest employer? It’s not sustainable.

Of course! Think about your comment. Do you think it would be economically healthy for a single company to grow larger than the government?

Look how much damage the banks did, and that was an entire sector, not a single company.

[Anonymous]

Anonymous wrote:

Anonymous wrote:As a fed it’s always more cost effective to hire federal employees. Contractors are expensive and I don’t think they’re always treated well. The reason I see contractors hired is because federal hiring is so convoluted and we can’t pay enough.

It’s a lot more complex than this. Do you have any idea how much training feds are put through every year? Who do you think pays for that? What about the effective overhead for each Fed? Retirement/healthcare?

Retirement and health care are taken into consideration and reported as how much a federal employee costs.

My agency doesn’t do much training. I haven’t paid for a training for any of my team in a decade. Supervisors are the ones who train in my job series.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:1 contractor I know at State was laid off a month or two ago.

Yes, typically direct hire employees are cheaper in total cost than contractors, but they are getting rid of those too.

How is that possible with benefits, retirement, etc.?

Typical body shop contractor markup is maybe 80-100%. This means if contractor's direct employee has $x in pre-tax salary then government is charged (1.8 * x) to (2 * x) dollars.

The pass-thru markup typically is 8% to 10%. So for subcontractors who are 1099s (on the same contract) who get paid $x, the government gets charged (1.08 * x) to (1.1 * x) dollars.

Federal employees usually cost less than a direct employee of the contractor. For subcontractors who are 1099s, the subcontractors often are cheaper than civil service, but not always.

My part of the government is not in the budget. We are pure fee for service, so I have visibility into the fully burdened costs of a civil service employee.

Imagine if the federal government had the same system of appending a percentage of the total salaries and benefits of support staff and management to each FTE's hourly rate to get the true cost of a federal employee.

Uhh, that's exactly what we. At least at my agency. That's how our budget works. I pay a "tax" to the agency that covers institutional support.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Contractors are used when the government wants the flexibility to staff up for finite or indeterminate periods of time, but not indefinitely. Normally, a caveat which wouldn't have been necessary in years past, government employees have considerable job security; once hired, they are (were) rarely terminated involuntarily before retirement eligibility. These days, things are obviously different, but contracting still offers the government a way to hire people for what are anticipated to be temporary needs. Contracting is also a way to hire SMEs at higher salaries than allowed by the government's pay scales.

In the past (when govenment jobs were stable), can government employees be terminated involuntarily without cause if they reach retirement eligibility?

That would be a layoff or a RIF. Yes it has happened but it’s usually not the retirement eligible ones who are let go.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:1 contractor I know at State was laid off a month or two ago.

Yes, typically direct hire employees are cheaper in total cost than contractors, but they are getting rid of those too.

How is that possible with benefits, retirement, etc.?

Typical body shop contractor markup is maybe 80-100%. This means if contractor's direct employee has $x in pre-tax salary then government is charged (1.8 * x) to (2 * x) dollars.

The pass-thru markup typically is 8% to 10%. So for subcontractors who are 1099s (on the same contract) who get paid $x, the government gets charged (1.08 * x) to (1.1 * x) dollars.

Federal employees usually cost less than a direct employee of the contractor. For subcontractors who are 1099s, the subcontractors often are cheaper than civil service, but not always.

My part of the government is not in the budget. We are pure fee for service, so I have visibility into the fully burdened costs of a civil service employee.

Imagine if the federal government had the same system of appending a percentage of the total salaries and benefits of support staff and management to each FTE's hourly rate to get the true cost of a federal employee.

Uhh, that's exactly what we. At least at my agency. That's how our budget works. I pay a "tax" to the agency that covers institutional support.

Yeah our Department takes like 10% off the top before the sub components get it. They basically tax us to fund the central department (where most of the waste is IMO).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:1 contractor I know at State was laid off a month or two ago.

Yes, typically direct hire employees are cheaper in total cost than contractors, but they are getting rid of those too.

How is that possible with benefits, retirement, etc.?

Typical body shop contractor markup is maybe 80-100%. This means if contractor's direct employee has $x in pre-tax salary then government is charged (1.8 * x) to (2 * x) dollars.

The pass-thru markup typically is 8% to 10%. So for subcontractors who are 1099s (on the same contract) who get paid $x, the government gets charged (1.08 * x) to (1.1 * x) dollars.

Federal employees usually cost less than a direct employee of the contractor. For subcontractors who are 1099s, the subcontractors often are cheaper than civil service, but not always.

My part of the government is not in the budget. We are pure fee for service, so I have visibility into the fully burdened costs of a civil service employee.

Imagine if the federal government had the same system of appending a percentage of the total salaries and benefits of support staff and management to each FTE's hourly rate to get the true cost of a federal employee.

Uhh, that's exactly what we. At least at my agency. That's how our budget works. I pay a "tax" to the agency that covers institutional support.

Yeah our Department takes like 10% off the top before the sub components get it. They basically tax us to fund the central department (where most of the waste is IMO).

There's some skimmed off the top for the overall budget, but we're taxed on what we spend. There are different overhead rates that for staff, contracts, equipment/service purchases, and grants. That's how most of the centralized management and support functions get their money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Contractors are used when the government wants the flexibility to staff up for finite or indeterminate periods of time, but not indefinitely. Normally, a caveat which wouldn't have been necessary in years past, government employees have considerable job security; once hired, they are (were) rarely terminated involuntarily before retirement eligibility. These days, things are obviously different, but contracting still offers the government a way to hire people for what are anticipated to be temporary needs. Contracting is also a way to hire SMEs at higher salaries than allowed by the government's pay scales.

In the past (when govenment jobs were stable), can government employees be terminated involuntarily without cause if they reach retirement eligibility?

They could be RIF'd.

Note that choosing who to RIF based on age is flat illegal in the US - regardless of where someone works.

IBM has lost at least 2 class action lawsuits when they targeted people at/above a certain age for layoffs. Very very expensive lesson for IBM.

[Anonymous]

The reason the government did contractors in the past was it was easier to fire them same day or cut contracts vs. firing a fed.

[Anonymous]

Anonymous wrote:The reason the government did contractors in the past was it was easier to fire them same day or cut contracts vs. firing a fed.

That is one reason.

Another is to handle a temporary increase in some kind of work. A third is to get some capability/expertise they cannot find in civil service (e.g., due to GS-15 pay cap or ST pay cap).

Some parts of the US Govt like to start (nearly) everyone as a contractor, then convert that person to civil service after they have shown both wlllingness to work and relevant skills for 1-2 years.