Genuinely curious: in consulting, why are federal salaries lower than commercial salaries?

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The easy answer: Gov contracts are usually sold in bulk and at a discount, which trickles to salaries of consulting staff.

Reasons include: slower moving (high performers prefer faster environments generally), better hours (limits on work hours built into contract) which comes at a discount, bulk contracts which could result in lower per hour rates, and generally the fact that gov contract work often, but not always, demands a less costly skillset (think: emerging tech skills that are used in commercial environments because of investment by businesses who want faster returns are usually not demanded by government, with some exclusions).

There are always ifs ands or buts and exceptions that can be referenced based on one's individual experience but those seem pretty obvious to me.

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Hourly rates we charge federal customers are lower than what we charge commercial clients
Also the pitch has always been that since you aren’t travelling that’s a huge perk to sleep in your own bed every night. And they are right a lot of people like that and will take a pay cut for a normal life.
With the merge of federal and state and local I don’t see how they can continue to pay the two practices differently.

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C1- you usually don’t swap. A lot of projects require some type of clearance—at least in Cyber

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The market dictates it. Companies like Booz pay their folks 60k so why would the other firms pay way higher? Federal billing rates don’t support the pay

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Also Fed consulting rates are usually locked to the GS rate for the work you’re doing

But are you exclusively a federal consultant? Don’t you just swap between some federal projects, and some commercial like with any other client? Or are they really separate teams?

The federal rate card is hilariously low.

Fairly well known that Commercial pays on average about 15% higher than Federal. There are always high performers that skew the fed average but normally it’s 10%-15% in commercial across the board, and sometimes double that at the high MD/Partner levels

You also work 40 hours a week

*only

@EY2 not sure what you do but I don’t know many federal consultants that get away with only working 40 hours...

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