Government Contractor Layoffs: A Complete Guide

Government contractor layoffs have unique considerations, from security clearance preservation to contract transition rights. Whether you work in defense, IT, healthcare, or other government contracting sectors, this guide covers what you need to know.

Current Contractor Landscape

Why Contractor Layoffs Happen

Common drivers:

• Contract end or non-renewal
• Recompete losses
• Government budget cuts
• Sequestration effects
• Administration policy changes
• DOGE and efficiency initiatives
• Contract consolidation
• Technology and process changes

Areas Most Affected

Higher risk situations:

• Contracts up for recompete
• Single-contract dependent positions
• Positions tied to specific programs
• Administrative and support roles
• Contractors affected by policy changes

Generally more stable:

• Essential mission support
• Technical specialists with clearances
• Critical infrastructure roles
• Long-term contract positions
• Multiple program involvement

Immediate Steps for Contractors

Security Clearance Preservation

Critical priority:

• Clearance typically remains active 24 months after separation
• Some levels may have shorter windows
• Get documentation of clearance level
• Keep SF-86 information updated
• Avoid any issues that could affect clearance

Contract Transition Rights

Under some circumstances:

• Right of first refusal with new contractor
• Incumbent workforce protections may apply
• Service Contract Act considerations
• Review your contract and company policies
• Union contracts may have specific provisions

Documentation to Preserve

Before leaving:

• Clearance verification documents
• Performance evaluations
• Training certifications
• Project descriptions (unclassified)
• Reference letters from government clients
• Contract and position information

Job Search Strategies

Cleared Job Resources

Where cleared professionals look:

• ClearedJobs.net
• ClearanceJobs.com
• Intelligence Careers
• USAJobs.gov
• Indeed (filter for clearance)
• LinkedIn (cleared recruiters)
• Company career pages

Leveraging Your Clearance

Your clearance is valuable:

• Many positions require existing clearances
• Saves employers time and money
• Opens doors not available to uncleared
• Highlight clearance level prominently
• Act quickly while clearance is current

Networking in the Cleared Community

Strategies:

• Cleared job fairs
• AFCEA and similar organizations
• Intelligence community associations
• Former colleagues at other contractors
• Military and veteran networks
• LinkedIn cleared professional groups

Working with Cleared Recruiters

Specialized recruiting:

• Many recruiters specialize in cleared positions
• They understand timelines and requirements
• Can match you with appropriate contracts
• Often have relationships with multiple primes
• Be honest about clearance status and history

Transition to Federal Employment

Direct Hire Opportunities

Converting to federal:

• USAJobs.gov is essential
• Understand GS pay scales
• Federal hiring takes time (months)
• Veteran preference matters
• Different benefits structure

Pros and Cons

Federal employment offers:

• Job security
• Retirement benefits (FERS)
• Health insurance (FEHB)
• May be lower base salary
• Less flexibility than contracting

Application Tips

For federal jobs:

• Tailor resume to announcement
• Include all relevant keywords
• Be thorough (federal resumes are longer)
• Understand assessment questionnaires
• Follow up appropriately

Alternative Career Paths

Within Government Contracting

Options:

• Different contractor, same contract
• Different contract, same contractor
• Subcontractor to prime contractor
• Prime contractor to sub
• Different agency focus area

Private Sector Transition

Where contractor skills apply:

• Cybersecurity companies
• IT consulting firms
• Defense industry (commercial side)
• Technology companies
• Private security firms
• Compliance consulting

Starting Your Own Business

Government contracting opportunities:

• Small business set-asides
• 8(a) program (if eligible)
• Service-Disabled Veteran-Owned
• HUBZone opportunities
• Subcontracting to primes

Transferable Skills

Technical Skills

Valuable across sectors:

• Cybersecurity expertise
• Systems administration
• Software development
• Data analysis
• Project management
• Engineering disciplines

Clearance-Adjacent Skills

Security-related:

• Security program management
• Risk assessment
• Compliance expertise
• Classified information handling
• Physical security
• Personnel security

Government Knowledge

Institutional expertise:

• Acquisition process
• Federal regulations
• Agency culture and processes
• Contract management
• Government budgeting

Certifications and Training

Security Certifications

High value:

• Security+ (DoD 8570 baseline)
• CISSP
• CISM
• CEH
• Cloud security certifications (AWS, Azure)

Project Management

Always valuable:

• PMP
• Agile/Scrum certifications
• ITIL
• Six Sigma

Maintaining Currency

While job searching:

• Keep certifications current
• Complete any pending training
• Consider additional certifications
• Document all qualifications

Special Considerations

Contract End Transitions

When contract ends:

• May have right of first refusal
• Understand timeline for decisions
• Compare incumbent vs. new contractor offers
• Consider loyalty vs. best offer
• Network with government client if appropriate

Clearance Investigation Issues

Protecting your clearance:

• Report any required changes
• Avoid financial problems
• No drug use or legal issues
• Report foreign contacts as required
• Maintain lifestyle polygraph readiness

Relocation Considerations

Government work geography:

• DC metro area has most opportunities
• Other hubs: San Diego, Colorado Springs, Tampa
• Remote cleared work is growing but limited
• Relocation may significantly improve options
• Some agencies have regional offices

Financial Considerations

Compensation Differences

Contractor vs. federal:

• Contractor often pays higher base
• Federal has better retirement
• Healthcare costs differ
• Contractor may have 401(k) match
• Factor total compensation

Unemployment Between Contracts

Filing considerations:

• Generally eligible between contracts
• Document job search efforts
• May have waiting period
• Some states have special rules
• Short gaps are common in industry

Retirement Planning

Contractor considerations:

• No pension (usually)
• 401(k) with possible match
• May change employers frequently
• Consider IRA contributions
• Plan for career-long savings

Resources

Job Search

Cleared-specific:

• ClearedJobs.net career fairs
• Intelligence and National Security Alliance
• AFCEA job board
• Military Officers Association

Professional Organizations

Networking opportunities:

• AFCEA (Armed Forces Communications and Electronics Association)
• NCMA (National Contract Management Association)
• PSC (Professional Services Council)
• NDIA (National Defense Industrial Association)

Clearance Information

Official resources:

• DCSA (Defense Counterintelligence and Security Agency)
• Your company's security office
• ClearanceJobs.com (information)

---

Key Takeaways

1. Preserve your clearance — it's your most valuable asset
2. Act quickly — clearance has a limited inactive window
3. Specialize in cleared job boards — they understand the market
4. Consider federal employment — different trade-offs
5. Network in cleared community — it's a small world
6. Keep certifications current — they demonstrate currency

---

Related Resources:

• Federal Furlough Guide →
• First 24 Hours After Layoff →
• Unemployment Benefits →
• Networking Strategies →