Everyone gives a resounding yes to the need to hire for skills. But defense contractors know that this is only a dream until the federal government changes their contract requirements. All it takes is one False Claims Act with a customer to highlight that the federal government isn’t just looking for the right skills. And that’s just what happened recently for one defense contractor.
Resolving False Claims Act
Obsidian Solutions Group recently agreed to pay over $500,000 to settle false claims allegations with the Defense Intelligence Agency (DIA). The contract with the DIA was to provide strategic-level analytical support for protecting the DoD’s supply chain. The government alleged that employee(s) on the contract didn’t meet contract specifications. They alleged that either a specific degree or years of experience was lacking. The result is that the customer pays more for labor than what is considered justifiable based on contract personnel qualifications.
Contract Qualifications Versus Getting the Right Candidate
While contractors should always work to stay within contract obligations, personnel qualifications have long been a frustration for everyone in the hiring process. Finding candidates with the required security clearances, skill sets, degrees, and years of experience is often like searching for a needle in the haystack. Plenty of cleared personnel have the right skills and aptitude to perform the job. But they can’t be hired because of contractual requirements.
The federal government may not be quick to adjust how they word bids and contracts, but they will audit programs and track down any hint of fraud. So, at this point, contractors still have to walk the line between scrambling to fill open billets – all while still following the contract requirements.
Many federal agencies love to push fixed-price contracts, for this very reason. Putting all risk on the contractor sounds ideal, but a lot of work within the federal government doesn’t naturally fit the mold for this type of contract. While time and material contracts used to be the norm, the federal government has moved to more cost plus fixed fee contracts, along with some indefinite delivery/ indefinite quantity (IDIQ) contracts. Any contract that defines the required labor categories and qualifications puts contractors in a position to meet the requirements.
The Case for New Labor Categories
With inflation costs and a tight labor market, recruiters get tasked with filling impossible positions. In order to meet contract qualifications, recruiters have to hope candidates accept their compensation offered without having to get too creative with a generous sign-on bonus. Forget retention strategies too. The goal is to get the candidate hired so they can start billing. It doesn’t matter if you win contracts. If you can’t fill the open positions, then you can’t bill. However, make sure your contracts department is working closely with your HR department.
