Hiring Freeze Thaws: How New Administration Policies May Impact Contract Administration

Lyndsay A. Gorton

On April 13, 2017, President Trump’s federal hiring freeze will be lifted—at least in part. The hiring freeze was instituted by a presidential memorandum signed on January 23, 2017, and prevents federal agencies from filling vacant federal government positions that existed at that time, or creating new positions. President Trump included certain exceptions, including military personnel and other positions deemed “necessary to meet national security or public safety responsibilities.” The memorandum requests that agencies use existing personnel efficiently and does not prohibit reallocation of resources for the highest priority concerns.

As of April 13, 2017, the across-the-board freeze will be lifted and heads of federal agencies will be immediately able to begin filling vacant positions. But, there is a catch. Only agencies in line with the budget priorities that were issued in March 2017 may begin hiring.

To explain how the hiring freeze will operate after the across-the-board freeze is lifted, the Director of the Office of Management and Budget (“OMB”), issued guidance for agency heads on April 12, 2017. The OMB guidance requires agencies to provide to OMB by June 30, 2017, a draft of an Agency Reform Plan, a progress report on workforce reduction actions, and a plan to maximize employee performance. The Agency Reform Plan must include an analytical framework to examine the “alignment of agency activities with the mission and role of the agency.” The guidance lists a number of factors for the agency to consider in its analysis, which includes whether positions are duplicative, non-essential, cost-effective, and appropriate for federal personnel.

The goals of both the hiring freeze memorandum and the OMB guidance are to streamline the federal government and eliminate waste. However, the catch is that the agencies can hire in line with the proposed fiscal year 2018 budget, which includes large appropriations for defense spending, and cuts funding for many other agencies. That means that while some agencies will be able to fill their staffs, others will likely be left with the lean personnel staffing that they have been dealing with since January or longer.

What does that lean staffing mean for federal government contractors? It is not possible to know for sure, but contractors should prepare for continued uncertainty. Contracting officers and other contract administration personnel will likely be stretched thin for the foreseeable future and given additional responsibilities to complete in the same amount of time and with the same, or fewer resources. Contractors should be mindful of these resource constraints and seek to redouble their efforts on maintaining strong lines of communication and recordkeeping.