How Contractors View Trump’s Budget and Government Reform Agenda

J. Scott Applewhite/AP

The Trump administration’s “skinny budget” released last week after an executive order on reorganizing the government drew cheers as well as brickbats from the contracting community.

The Professional Services Council, which represents 400 companies, said in a statement it backs the budget’s “increases for defense spending and believes that, if they are focused on sustainment and legacy systems modernization, those increases will help increase military readiness around the globe.”

But the council plans to work with Congress to alter some of President Trump’s priorities. “We are particularly concerned about arbitrary and disproportionate reductions in some agencies, cuts that do not align with the vital missions and functions of those agencies," said President and CEO David Berteau. “Contractors can help bridge that gap.”

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Dean Garfield, president and CEO of the Information Technology Industry Council, also expressed a mixed opinion of the budget.  “While we would welcome learning more details about boosting cybersecurity efforts, overall, this is not the budget that the tech sector would have proposed,” he said. “The dramatic cuts to investments that are key to America’s success like education, science and research, and boosting our competitiveness in markets overseas is troubling. That said, the president earned the prerogative to lay out his vision for the country, and we look forward now to being a part of the long and winding process to arrive at a final budget.”

Principals at the Fairfax, Va.-based MorganFranklin Consulting, which bills itself as a strategy and execution-focused business firm and professional adviser with 300 employees, were more upbeat.

Trump’s goal of cutting costs and bringing efficiencies across agencies, along with the current hiring freeze “will have an impact on agencies,” said Managing Partner Chris Mann. It also “reduces or eliminates the ability for several agencies to take on new innovative things. But those don’t go away, and the need to bring that expertise to forefront continues. It provides opportunity to contractors, who are able to be nimble and react to changes and the freeze.”

Hiring freezes also occur in commercial entities, Mann added, which “use their flexibility and ability to manage their hours and dollars spent through outsourcing.” But the prospect of government reductions in force does not cause him to foresee “a big drop-off in job creation” in the Washington-area economy. “There is a shortage of headcount for people we could use across government and in commercial work.” So “potential candidates make another pipeline of opportunity for us.”

His colleague Frank Landefeld, MorganFranklin’s managing director and public sector market lead, said, “Even if budgets are reduced, an agency still has needs—how to right-size?” for example, which can be risky. He sees two types of contractor opportunities: a near-term stopgap approach to continuing such tasks as information technology modernization, and figuring out reorganization in a “resource-constrained reality to become more efficient and effective through implementation of technology.”

An example is Trump’s plan to change the regulatory process. “We as consultants around the Beltway understand regulation from a compliance perspective better than some of our hard-working federal counterparts, who have such a slate of things they do,” Landefeld, said. “We have a much more focused scope of work that allows us to dig in, by reducing the right regulations.”

Landefeld doesn’t anticipate massive federal layoffs, but he also expects to do some recruiting.  “A lot of folks in the federal government are there for the stability,” he said. “But given all things they take shelter in, they can get that same feeling from us. There may be a way for the consulting industry to harbor these folks a bit more, to provide the sense of security” they’re used to from working for Uncle Sam.

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