INCREASED FEDERAL WORKFORCE WOULD INCREASE OPPORTUNITIES FOR CONTRACTORS

DOD, VA, Treasury, and Agriculture could all see significant increases in personnel if key parts of President Biden’s budget are adopted.  The additions would create the largest federal workforce since World War II, providing increased opportunities for contractors to provide services and solutions in support of expanded federal functions.  While some believe that the president’s budget was “dead on arrival” in Congress, others point out that key parts of previous budget proposals are usually adopted in whole or in part by the time Congress has finished its work.  While the Treasury increase may not come as too much of a surprise given the administration’s previous announcements on growing the IRS, it is important to note that main Treasury would be expanded by 18%.  Treasury is concerned that its infrastructure has eroded over time, potentially providing opportunities to companies that can modernize those functions.  New technologies to support Department of Veterans Affairs workers providing services to veterans would also be a contractor opportunity.  Other support opportunities include Forest Service land management work and supporting different missions inside DHS.  The increases, however, may be a bit of a double-edged sword for industry.  A significantly expanded IRS would be expected to recover money from taxpayers to pay for much of the administration’s plan.  Also, the Office of Federal Contract Compliance would increase by 25%, providing more oversight of contractors that provide services to federal customers.  The budget request will now be used by Congress as one key benchmark against which FY’24 spending bills will be formulated.  Industry has an opportunity to participate in this process and should make their voices known on both the budget’s positive and negative aspects.