On a CBA. Can a company that has just won a government contract demote employees for no reason?

I work in a government facility, ran by Sub contractors. My current company LB&B has just lost the contract to a different company called fidelity. The company under bided the contract by 30% without realizing how big the contract was. They actually won the contract. They tried to lay 2 of us off and demote another 2 of us from our Tech 2 position to Tech 1. The government needs to have a certain amount of people on site. They were not allowed to lay off the 2 people. They the realized that they under bided the contract. So they demoted 4 people to Tech 1, Including myself. They want us Tech 1's to do the same job that we were doing before as Tech 2's. We are on a CBA. Is this legal? The only reason the demoted us was because they under bided the contract. So we have to pay for someone else’s mistakes. Our CBA reps are working hard to try to get us back our positions. So I’m trying to get some professional advice. Also, There is a Tech 1 position on our CBA. We have never had a Tech 1. They are not qualified to do the work that we do. That’s why there were only tech 2's before. If you need more info on this, let me know. Thank you