You might be surprised to learn that the number of contractors who work for the U.S. government has topped 4 million people and the government has spent about $500 billion each year on contracts.
What are contractors? According to FindRFP.com an agency that helps contractors find government jobs, similar to other businesses the federal government uses contracts to buy goods and services it needs from office furniture, and airplanes to Internet and research and development to execute its missions.
Grants and contracts are similar yet different. For example, the US Air Force uses contracts to buy fighter jets for missions while the Federal Highway Administration uses grants to provide funds to states for public roads, it explains.
In the 2018 fiscal year the total number of contracts were: $554,964,188,136
Department of Defense: $369,708,616,833
Department of Energy: $30,131,922,213
Department of Veterans Affairs: $27,167,764,009
Department of Health and Human Services: $24,067,453,767
Department of Homeland Security: $19,002,583,593
Contractors usually become hired by the government after winning contracts that are out for bid.
“Government contractors can win contracts by submitting the lowest cost bid in response to a proposal, which is required by law. Just like government agencies, government contractors come in all different sizes,” according to FindRFP.com
Bigger companies and organizations often bid on government contracts for federal projects for lots of money, but they also bid on state and local contracts.
The process to become a government contractor differs among companies depending on what state the company is located in.
Each state has its processes and procedures in terms of becoming a registered vendor; it’s important to checking first with your state, county, and city procurement office which is the first step before bidding.
Once a business becomes a registered vendor, the search begins for government contracts. For most purchases above $25,000, the government advertises what they are going to buy, and the bidding is open to the public, according FindRFP.com.
A report on Marketplace.org about the topic of contractors suggests even though the bottom-line numbers for federal contractors have risen in the past several decades, they can fluctuate depending on whether the U.S. is at war.
“Because the Department of Defense is simultaneously the military, of course. They contract out a lot of their guard duty,” said Jack Pitney, a political science professor at Claremont McKenna College in the article by Janey Nguyen.
The article written in 2019 adds the Department of Defense is the agency with the largest number of contractors and works with large businesses such as Lockheed Martin, Boeing, and Raytheon.
In the article Nguyen refers to Paul Light, a public service professor at New York University, who noted from 2002 to 2010 amid the wars in Afghanistan and Iraq the number of contractors went from about 2.8 million to 4.9 million.
Also mentioned, the government increased its spending on equipment and supplies for those wars, along with grants for job training, education, and highway education.
However, from 2010 to 2015 when the Iraq War ended, Light said the number of contractors rose in 2017 because President Trump increased defense spending, according to Light in the article.
“But even if we controlled for war, there would still, to some extent, be a significant increase in the number of contractors in the U.S,” Light states.
Other major agencies that employ contractors include the Department of Energy, and the Department of Health and Human Services for various goods and services, the Marketplace article said.