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Insourcing contractor acquisition support

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Most non-competes are written in a way that the court won't uphold because they are too broad. BUT contractors performing acquisition support better be signing non-disclosure agreements or else we're going to spend all our time dealing with procurement integrity/perception/protest issues instead of making smart business arrangements.

I signed a contract with a non-compete clause in it. The prime prohibited me from working directly for their customer (govt agency) for 2 yrs. The agency was tired of paying the prime's pass-thru charges to get my services and wanted to contract directly with me. Prime said no and threatened both of us with legal action. I had no idea these conversations were even taking place!

At the end of my contract and in the middle of a 2-week training class, my client wanted to renew my contract. I said no because of the non-compete restriction. I wanted to start the clock on that 2-yr time restriction. They tried to find another qualified instructor to teach the rest of the class, but the agency didn't approve their selection.

I told the prime I'd renew the contract as long as they would waive the 2-yr non-compete restriction. They were in a bind and needed my services to complete the class. I taught the class and went on to work directly for that agency. The prime in this case no longer does.

The point of this experience is that these clauses are negotiable even after the fact.

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Brian:

I run a rather successful business. I have employees. I know that what you get in business, and the assets that you keep, are reflections of your competence and hard work. There are no guarantees. I think a business should compete for labor like it does for sales. I do not ask my employees, who are very highly paid, to sign noncompetes.

Employers in many fields don't need non-compete agreements to protect against losses. Employers in other fields do.

If Apu from the Simpsons hires someone to pump gas at his Kwik-e-Mart and then that person leaves, even if to start another gas station, it's not exactly the end of the world for Apu or the Kwik-e-Mart.

In other industries, a narrow non-compete can protect an enormous investment in a firm's client base, processes, inventions and other assets.

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Guest Vern Edwards
Employers in many fields don't need non-compete agreements to protect against losses. Employers in other fields do.

If Apu from the Simpsons hires someone to pump gas at his Kwik-e-Mart and then that person leaves, even if to start another gas station, it's not exactly the end of the world for Apu or the Kwik-e-Mart.

In other industries, a narrow non-compete can protect an enormous investment in a firm's client base, processes, inventions and other assets.

The key is "narrow." In my experience, employers who demand noncompetes go for "broad" and use the prospect of litigation to intimidate employees, former employees, and prospective employers. But I suppose that there are some employers who demand noncompetes and who are ethical. I'm sure that you're going to say that there are, so I won't argue with you.

My advice to professional people looking for work is: Unless you're desperate, don't sign a noncompete if you don't have to, no matter how "narrow" it seems. I'm pretty sure that most attorneys would second my advice. Businesses can use reputation, customer relations, pricing, trademarks, patents, and copyrights to protect their assets and client base. But if you need the work, then you've gotta sign what you've gotta sign.

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The key is "narrow." In my experience, employers who demand noncompetes go for "broad" and use the prospect of litigation to intimidate employees, former employees, and prospective employers. But I suppose that there are some employers who demand noncompetes and who are ethical. I'm sure that you're going to say that there are, so I won't argue with you.

And if you sign one and the job doesn't work out, where can you look for employment?

Most good employers care about the well being of employees. If the job doesn't work out with them for whatever reason, they hope employees find something else. A noncompete is inconsistent with that thinking.

My advice is find another job is you face signing one as a condition of employment.

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The Government keeps absorbing our direct labor employees on contract. It's a bad cycle because they are doing nothing to enhance their own recruitment and training. They cut out those costs by absorbing contractors but the issue never rectifies. I was in the military, a GS civilian and now am a contract director for a contractor and I prefer working for a contractor. Most of the DL engineers etc. who have worked in the Govt. and are being absorbed again aren't very happy about it.

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CM,

I don't understand your last sentence as written. Are you saying the DL engineers are being absorbed against their wills, that they are grudgingly accepting the positions because they fear losing their jobs, or something else? Last I heard, press gangs were not running around DC or anywhere else in the US, so I would see the first as being a bit outlandish, but that is implied by your sentence.

Not long ago, I watched an entire PWC organization get disestablished, and many of the technical and contracting employees were absorbed into a larger service-wide organization. Some of the employees were let go or retired early, and several of those ended up working for contractors supporting the same functions they had performed as civil service employees. Most of the PWC employees were "not very happy" about that, but had little choice in the matter. But they DID have a choice; they could resign and find another job if they were so unhappy.

I would imagine that the contractors who are being "absorbed" may see that their jobs are eventually going to go away (some of us see that in the tea leaves), so are preemptively resolving that problem by crossing over, but that is a choice. It was not long ago that flow was moving in the other direction, so I do not see this as a tragedy; it is simply the ebb and flow of politics and trends in the government. If your around long enough, you will probably see it go back the other way, and find civil service employees moving into contractor positions for a season, only to return again to the government side when the season changes.

I wonder if the geese see the move to the north or the south as a big deal and complain much? I guess that is why they honk all the way from the Artic Circle to Florida, and are honking outside my window right now!

I'm not trying to be disrespectful with that last part, just seeing how our organizations sometimes mirror nature, and trying to put it into that perspective.

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The ebb and flow moves very fast. Prior to ARRA, I at least thought it was starting to look like the trend would be against contractor acquisition support. However, in the past few months, I have seen job postings all over the country for 1-2 year gigs, some of which seeking to hire as many as 6-10 people per site. Well see if these contracts die once the ARRA money is all spent.

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Hi, I own a small business that has about 25 people. We do almost all of our work for the federal government. Everyone else in the company except for me works on site directly supporting the customer. We go to great expense and effort to find and retain great people to support our customers. This includes extensive and expensive resume searches, interview after interview, and reference checks. We also have generous benefits, frequent social events and go to a lot of trouble to have the people stay on. This is backfiring now though as we have had two of our best employees hired by our customers over the last month. Also I know of at least 4 additional employees working under a couple of different contracts who our customers are trying to hire and probably will - unless I take some action. Obviously my company could literally be absorbed by the government if I am not careful.

As an example and in the most recent case we had a 5 year contract for one person. They liked the person we had working there so much they converted the position to a government billet and basically forced her to take the civil servant position doing the exact same job. Then they cancelled our 5 year contract for convenience - in the middle of the first option year and giving my company less than two weeks notice of the termination. Thus they basically used my company as a recruiting company without paying a recruiting fee - which is often some major percent of one years salary. I was planning on earning back the recruiting expenses etc over the 5 year period but now will be lucky to break even and will probably lose money on this contract. Also I have had several business development opportunities affected by losing this past performance and it sure doesnt help the morale of the rest of my people - and is a dangerous precedent that encourages everyone to consider doing the same.

I asked for some kind of consideration such as an equivalent position somewhere else at the command but was rebuffed. I am submitting an invoice/final settlement proposal within a few weeks. If someone has an idea of what I can include in this invoice would appreciate it.

Of course the bigger question is what can be done to keep my customers from hiring the best of my remaining employees - which is definitely about to happen.

Thanks!

I worked for the government for over 30 years and have watched this pendulum swing both ways over the years. I saw many of my friends and coworkers lose jobs because of contracting out and was nervous about my position for a number of years at one agency until I left there and went to another agency. I now see it going the other way and advice people I work with to accept the government position for no other reason then to get the security of health insurance if they retire for the rest of their lives.

I am sorry but I do not have much sympathy for you if you paid that large a fee to a recruiting firm and will lose out for lack of fore thought because of what is happening to you. If I was the CO and you submitted that kind of invoice, I would reject it right back at you.

I have seen many people hurt over the years by non-competes and think asking an employee to sign one is about as low as an employer can get. It is nothing but using a fear tactic because they do not want to work at providing good benefits, secure positions, or retention policies. I am sure if you had been offered a bonus to increase production and finish a job ahead of schedule, which eliminated that employees position you, won?t have felt guilty about accepting the increase revenue for you and the loss of positions for them. One thing I have learned is that contracting firms view contract employees as commodities not as valued employees as those working at the company offices doing direct company support instead of contract support. I would advise everyone that is asked to sign a non-compete to refuse and find another employer immediately.

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This issue obviously isn't just limited to contracting people. Washington Technology magazine recently listed eight news events in 2009 that will continue to make the news in 2010. This is one:

Beware of government poachers

The rising number of contractor employees being recruited to work at government agencies has sparked complaints from industry.

There have been reports of agencies having lists of contractor employees they want to hire. In some cases, agencies have used job pitches that incorporate economic fears, such as claiming that there are plans to cancel contracts, leaving the contract employee without a job.

Questions also have been raised about the ethics of hiring contractor employees. The government should follow the same rules industry does when it hires a government person, some say.

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