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Defense Contractor Overview
The website Tech Target answers the question, ‘What is a defense contractor?’, very succinctly. It says that it is any person or entity—as in a company—that agrees through a formalized contract with the U.S. federal government to manufacture a material or perform needed services for the military defense of the nation.
When you ask the question, ‘What is a defense contractor?’, you might also wonder if there are different types. The answer—as indicated by the Thought Company—is yes.
A sole source procurement contractor is the only provider of a product or service. To avoid questions of monopoly or conflict of interest, this type is rare and often extremely well-documented by the government.
The second type is a multiple award procurement contractor. These contractors compete for task orders with others by offering the best product for the best conceivable price. Most often, there is a previous history of successful work for the government with each competitor for the task order.
Once the question of, ‘What is a defense contractor?’ is answered, you might then wonder, ‘What are some of the pros and cons of entering into an employment agreement with a U.S. defense contracting company?’ Here are some of the benefits according to Leader Quest Online:
- The U.S. government pays everyone equally in the same position. This means that an entity contracting with the government must abide by these rules and not engage in pay discrimination according to age, gender, or racial-ethnic background.
- The opportunity to engage with cutting edge technology is very likely to present itself if you work with such a company. Often technology first developed to help with our defense is later adopted for general civilian use. An example of this adoption of technological advancement is the internet itself—first developed by the Defense Advanced Research Projects Agency (DARPA).
- You may be eligible to claim the Foreign Earned Income Exclusion (FEIE) on your annual tax return. For U.S. citizens and resident aliens that work abroad for U.S. defense contractors, a percentage of your total salary which is equal to what you make in the country where you work may be able to write off your taxable income. There are guidelines and stipulations for claiming this benefit, but it can mean more money in your pocket.
As indicated by Leaders Quest Online, the downside of working for a U.S. defense contractor may include the following:
- All jobs with government defense contractors—unless they have a balance of civilian work agreements as well—are dependent upon government funding. In the event of a federal budget crisis, your position may have a certain amount of insecurity built into it.
- Different presidential administrations have different priorities. Under the whim of one administration or during a peaceful transition of power over the another, priorities can change which affect projects undertaken. This too has an effect on job security.
Pine Gap
An example of a U.S. Defense Contract is a facility on the continent of Australia known as Pine Gap. As indicated by the Intercept, this facility employs hundreds of American and Australian citizens. While its function is largely secret, it is believed to play a key role in satellite defense surveillance.
Through a complicated treaty with the country of Australia that has since been amended, many workers were pressured not to take the FEIE and to sign an agreement to disclose their tax records to their employer.
This issue is being addressed in the legal system currently. If you are or have been an employee at Pine Gap and feel your rights have been violated, we have the ability to help.
