That's in theory. In practice, the better deal would have to be insanely advantageous to the bottom line, because the outgoing contractor would take so much familiarity and institutional knowledge with them, and the incoming team would be playing catch-up on a steep learning curve from day one. Although often that plays out as not so disruptive because the outgoing contractors are suddenly in danger of being laid off because they're not on a viable assignment, and the incoming team may very well recruit (poach) from the losing side, in order to retain that aforementioned wealth of intangibles, or as much of it as possible.
Back in 2009, just a few months before I started this here blog, I was already working for my current employer but on a different contract. It was a newer and shorter contract for a newly stood-up agency, and we went through a re-compete, and I felt pretty self-assured because of the logic I laid out above. Why would they ditch us when we had just gone through the process of learning the ropes, why would they throw that away and start over? I wasn't overly cocky, I did everything that was asked of me to help with the re-compete effort, but I didn't lose any sleep over it. And then we lost the re-compete, and I was benched, and I was not poached by the contractor that ended up winning the new contract. But luckily I was contacted by someone who had one opening on their contract, and that's where I've been ever since, up to and including today.
So I have seen firsthand that incumbency is not invulnerability. But, on the other hand, the situations are kind of apples and oranges. On my previous contract, we were more or less making things up as we went along, very much in keeping with how the brand spanking new agency was conducting itself. It's possible that we doubled down on things in our re-compete proposal that were actually very different from where the decision-makers had determined they wanted to go in the future, and the groundwork we had laid worked against us in the eyes of people who wanted fresh ideas and course corrections. Whereas in my current gig, it's a much more well-established (dinosaur) agency, and this is not even our first re-compete. It's my first, since I jumped on about five years ago, but it's the second or quite possibly the third for the team as a whole. I think I heard someone say we've been in place supporting these endeavors for 16 years, which is crazy but at least the kind of crazy that may work to my benefit.
At any rate, my contracting manager called a meeting this morning for the whole team to talk about what's going on with the contract, since everyone (who's paying attention) is understandably a little bit anxious to have the unresolved be resolved, one way or the other (hopefully one and not the other). And of course the first thing that our manager had to explain was that the governmental powers that be up and down the process chain are all a little behind and off-schedule, which means there's very little to report because they haven't even officially begun the re-compete process, despite the nearness of our contract's expiration date. We have been getting as ready as we can to submit our proposal in hopes of being awarded a new multi-year contract, but can only get so far without a specific set of guidelines provided by the government detailing what (if any) changes may be expected between what we have been doing and what will be required going forward. In order to take in multiple proposals, evaluate them all, and award the new contract for a seamless transition as the old contract ends, the government would probably need to already be in the take-in phase, and as I just said, they haven't even finalized the parameters that contractors should be proposing to follow and meet. So odds are there will be no new contract awarded when the old one runs out.
This is cause for a certain amount of consternation, but not outright alarm. It does not mean that work in this agency would grind to a halt as we all go home without pay (and possibly without jobs altogether) while the government figures out belatedly whom to hire on to restart the process. Once it becomes undeniably clear that the deadline would be blown, the government would negotiate a short-term (six months?) extension with my employer and life would go on as normal without a hitch. Again, it's always possible that the negotiations could implode and then we the grunts in the trenches (metaphorically speaking, all due respect to the actual soldiers whom or work supports)) really would be left in the lurch. But that's incredibly unlikely.
There's a certain logic in rooting for the government to blow the ever-shifting deadlines and be forced to grant my employer a temporary extension, because it seems natural to assume that we bolster our own chances of winning the re-compete by being gracious and accommodating about picking up the slack in a no-drama, no-fuss kind of way. Unfortunately, here in the real world, it doesn't work like that. We could get an extension and later be told "Thanks for sticking around a few extra months while we got our act together and decided we want to give the gig to your competitor. Also please document everything you've ever done so we can give it to the new guys and get them up to speed quickly." That is just the nature of the beast in this business. But, again, there's virtually nothing I, or any of my colleagues, can do about that, beyond showing up every day to execute our duties and not give the government any special reason to want us gone. Of course, this did not stop certain people at the team meeting from asking a lot of "what if" questions as if they just had to keep pushing and then my manager would bust out the crystal ball and give them definitive answers about what's going to happen down the road. But so it goes.