On January 22nd, President Trump signed a “Presidential Memorandum Regarding the Hiring Freeze,”  which prohibited all Federal agencies from filling any identified position vacancies existing as of noon on January 22, 2017 and narrowly limited the circumstances under which any new positions would be created or filled.  The memorandum specifically exempted “military personnel,” but did not clarify the status of civilian military employee hiring positions. The Director of the Office of Personnel Management (OPM) was permitted to grant exemption to the freeze when deemed “necessary.”  Exemptions may also be given where filling a position “is necessary to meet national security or public safety responsibilities.”  Circumventing the hiring freeze through contracting outside the Government is forbidden.

The memorandum further directed the Office of Management and Budget (OMB) in consultation with the OMP to act within 90 days to recommend a long-term plan to reduce the size of the Federal workforce through attrition.  The hiring freeze will expire once this plan is implemented.

What does the hiring freeze  mean for Federal contractors?

How are Professional Services Federal Contractors affected by the Hiring Freeze?  Expect Delays.

If you provide contracted services to these agencies the hiring freeze may not affect you. Here at Coley GCS, we assist various services contractors and are receiving widespread reports that contracting officers are cautioning contractors regarding the award of such contracts for openings past 22 January.  Generally, contracting officers are advising of delays in awarding contracts.:

  • Department of Defense
  • Homeland Security, including
    • S. Immigration and Customs Enforcement
    • Border Patrol
    • Coast Guard
  • Federal Bureau of Investigation
  • S. Marshall’s Service
  • Secret Service

If you provide contracted services to Federal agencies not mentioned above, you can expect a slowdown during the 90 days between 22 January and the expected OMB / OPM report.  After that, however, history would indicate a strong demand for contractors to provide temporary staffing and professional services to carry out Federal functions.

Hiring Freeze Impact on the VA

One specific case that appears to be unclear is that of the Department of Veterans Affairs (VA), which currently has 2,000 open positions.  As it is currently worded, the memorandum appears to include the VA in the hiring freeze as it is not specifically exempted nor does it fall into the national security or  public safety categories.

The Presidential Memorandum Regarding the Hiring Freeze reads:

“The head of any executive department or agency may exempt from the hiring freeze any positions that it deems necessary to meet national security or public safety responsibilities. The head of any executive department or agency may exempt from the hiring freeze any positions that it deems necessary to meet national security or public safety responsibilities. “

Acting VA Secretary Robert Snyder released on Friday, January 27 a signed exemption to the hiring Freeze Memo to include a full list of almost 75 positions necessary for the VA to meet public safety responsibilities.

What does History Show us about Past Government Hiring Freezes?

In the past, hiring freezes under Presidents Carter and Reagan, led to a rapid expansion in the contracting out of functions that had been performed by Federal employees.   The Government Accountability Office has said in the past that the previous freezes “disrupted agency operations, and in some cases, increased costs to the Government.”

While the expected OMB/OPM report will provide strategies for reducing the Federal workforce through attrition, it will also recommend alternatives to achieve efficiencies in the delivery of Federal services.  Some of these will be through organizational actions, such as consolidations. This would be good news for companies providing Management Consulting services under the GSA PSS schedule or OASIS, as agencies look for strategies to maximize the use of scarcer resources through organizational change.

It is also likely that the recommendations will include efficiencies realized through automation and the use of integrative technologies.  This could be beneficial to companies selling both IT products and services through the GSA IT 70 Schedule.

Prepare for Long Term Success.

It appears promising that the recommendations will include competitively bidding out contracting to private firms to efficiently deliver some of the functions formerly handled by Federal employees, which may mean long-term growth opportunities.

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