When to Hire a Contracts Manager, and When to Outsource Instead

When should government contractors hire a contracts manager and when should they outsource?

As a government contractor, managing contracts and regulatory compliance isn't optional, it's essential to the success of your business. Regulatory compliance, contract modifications, FAR clause flowdowns, and risk mitigation are complex enough on their own, and when layered on top of day-to-day operations, the strain on internal resources can quickly become a liability.

At some point, every small and growing government contractor faces a critical question:

Do we hire a full-time contracts manager, or bring in outside help?

This article addresses the following considerations:

• When it makes sense to hire an employee;

• When outsourcing is a smarter move;

• Key decision points to help you choose; and

• How fractional support can bridge the gap.

First, a contracts manager (or contract administrator, contract compliance lead or other similar title) typically handles:

• Reviewing and negotiating contract/subcontract terms;

• Ensuring FAR, DFARS, or other agency FAR supplement compliance;

• Drafting or reviewing contract/subcontract modifications and approvals;

• Drafting and ensuring compliance with corporate policies;

• Negotiating and/or administering subcontract agreements;

• Ensuring deliverables, reporting, and invoicing compliance; and

• Managing contracting officer and subcontractor correspondence and audits.

For growing companies, this is a lot to manage, especially if the work is falling on the CEO, CFO, or operations lead.

First, it’s important to note that there is no single approach to hiring in-house. Not all contracts managers are created equal and not every company has the same level of need. As with so many areas of expertise, you have junior, mid, and senior level experts that you can draw from. Plus, how many personnel you need will largely depend on your portfolio of government contracts, subcontracts, and even grants and cooperative agreements.

Hiring a full-time senior-level contracts manager can offer stability, control, and nuanced insight into regulatory matters. But it also comes with long-term commitments and higher costs.

Hiring a full-time, senior level contracts manager makes sense if:

• You’re managing multiple concurrent contracts, each with complex terms;

• You anticipate frequent contract modifications or option year renewals;

• You’re building out a dedicated back-office team; and

• Your business is in steady growth mode, and you want embedded internal systems.

But note that doing so comes with certain risks you need to be prepared to take on. These include:

• Senior talent is expensive: salaries for someone with at least 10 years of experience will likely run you around $150,000 per year, plus benefits;

• The wrong hire can actually cause or exacerbate compliance or audit issues; and

• You may not have enough steady volume to keep a full-time person fully engaged.

On the other hand, if you have yet to be awarded a government contract or have only a handful of prime contracts or subcontracts, you may not need a senior-level expert in-house. Rather, hiring junior or mid-level personnel to handle basic administrative tasks, and outsourcing occasional senior-level subject matter expertise might make more sense. This approach could apply to you if you have enough contract admin work to keep a junior or mid-level hire busy 40 hours per week and do not have the budget for a full-time, senior-level expert. Your outsourced senior expert would then supply:

• Quality control of your junior or mid-level contract administrators’ work;

• Senior-level expertise to serve as a sounding board when faced with complex issues;

• FAR-compliant internal controls, such as a Code of Business Ethics and Conduct, Procurement Policy, Recruitment and Hiring Policy, or Travel Policy;

• Cost and Pricing strategy support on proposal efforts;

• RFP risk assessments and teaming agreement strategy;

• Guidance on communications with COs or primes;

• Negotiation support with large prime contractors; or

• Administrative support at times when your more junior level personnel are stretched thin.

By leveraging senior-level fractional support, you get the knowledge and experience of a tenured specialist without the full-time price tag. And you can scale support up or down depending on your pipeline and workload.

At Akiri, we specialize in providing fractional contracts support to federal contractors who aren’t ready (or simply don’t need) to hire a full-time, senior employee. We offer off-the-shelf and customized fractional support contracts, thus ensuring a plan that works for every contractor at every stage of business development. In essence, we work seamlessly with your team and scale up or down as your business evolves. And all of our contracts specialists have at least 10 years of experience managing government contracts and navigating the regulations.

Whether you decide to hire a full-time contracts manager or outsource the expertise, the key is to be strategic. The right choice depends on your company's unique needs, growth stage, and risk tolerance. By carefully evaluating your options, you can ensure that your compliance and contracts are managed efficiently, allowing you to focus on what you do best: growing your business and delivering value to the government.