Think bigger than 2% raises
On most government contracts, there will be a built in 2% rate escalation at the start of each option year.
So if you started off billing $100/hour, the next year your rate will automatically increase to $102 hour, the next year, to $104.04, etc.
These raises are fine, but if you're serious about earning more money, you can do a few things:
- Re-negotiate your rate on your current project
- Find another project with a higher billable rate
If you want to re-negotiate, you need to make sure you are valuable to your government client and that the prime knows it.
You should also be fairly confident that there is room to raise your rate. If you find out that the prime actually bills the government $120/hour and you bill the prime $100/hour, there is margin for a rate raise.
Then you can bring it up and work out a deal.
Finding another project is also a good strategy. Government contracts can pay dramatically different amounts for the same set of skills so you could go from making $100/hour to $130/hour, which would be a $50,000 - $60,0000 raise depending on how many billable hours you work.
Even better, do both!
Find a new project, and use that as leverage to see if your current prime can raise your rates substantially.
If they can't, move to the new project. If they can, you have options.
As a 1099, thinking about increasing your earnings should become a regular feature of your career.
No one will just give you a promotion and a raise as part of the performance management system.
You have to get it for yourself.
Want the full playbook? Check out Going 1099.