Senate panel backs tighter caps on contractor pay

The amendment was offered by Sen. Joe Manchin, D-W.Va. The amendment was offered by Sen. Joe Manchin, D-W.Va. J. Scott Applewhite/AP

The Senate Armed Services Committee on Tuesday approved a plan to cap the federal reimbursement to defense contractors for all salaries at $230,700 per employee.

Under current law and regulations that the Obama administration updated in April, contractors are reimbursed for salaries as high as $763,029. The new $230,700 cap matches the annual salary for the vice president.

The amendment to the fiscal 2013 National Defense Authorization Act offered by Sen. Joe Manchin, D-W.Va., follows an earlier proposal from Sens. Barbara Boxer, D-Calif., and Chuck Grassley, R-Iowa. It has won union approval, but is opposed by contractor groups.

“This important reform will help rein in the exorbitant taxpayer-funded salaries paid to top defense contractor employees,” Boxer said in a statement.

“Slowly, but surely, progress is being made on this issue,” added Grassley. “Private companies can pay their employees whatever they want, but federal contractors should not be able to pass on salary costs to taxpayers that are more than three times what a member of the president’s Cabinet makes.”

A House version of the plan, introduced by Rep. Paul Tonko, D-N.Y., would have capped the reimbursement at $400,000, the president’s salary. It was rejected by House leaders, and the issue is not addressed in the version of the Defense authorization bill that cleared the House Armed Services Committee in early May. The final outcome is likely to fall to a House-Senate conference committee.

The Office of Management and Budget has proposed a different approach -- a reimbursement cap of $200,000, the highest Cabinet salary level, but only for the top five contractor employees. The Senate committee approval was welcomed by John Threlkeld, legislative representative for the American Federation of Government Employees. “The excessive compensation for contractors is a painful reminder of the cost to the American people of the federal government’s ruinous over-reliance on service contractors,” he said in an email to Government Executive. “We call on OMB, which has covertly opposed genuine reform in the past, to unambiguously endorse this provision, and we urge the House and Senate Financial Service appropriators to take similar action for non-DoD contractors.”

Threlkeld also called on the Defense Department’s inspector general to determine whether the department is appropriately invoking exceptions to the reimbursement cap.

Colleen Kelley, president of the National Treasury Employees Union, had backed the Tonko approach, saying in an earlier statement, “At a time when our economy is struggling, millions of Americans are unemployed, and our national debt and deficit continue to grow, taxpayers should not fund government salary reimbursements for private contractors that are higher than the salary of the president of the United States.”

A key contractors trade group, the Professional Services Council, has long opposed reducing the reimbursement cap for fear of harming the government’s and industry’s ability to access critical skills.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.