Lawmaker asks watchdog to look into contractor executive pay caps

By Charles S. Clark

November 20, 2012

In the latest twist in the dispute over federal reimbursement of contractor salaries, a member of the House science and technology panel has asked the Government Accountability Office to review how much several key agencies are racking up in contractor compensation costs.

Rep. Paul Tonko, D-N.Y., ranking member of the House Science, Space and Technology Subcommittee on Investigations and Oversight, cited a need to “belt-tighten” and the potential to save the government billions of dollars. “Examining the excessive costs of executive compensation on federal contracts is a necessary oversight role of Congress in order to make more prudent and responsible decisions going forward,” he said in a statement.

The current reimbursement cap, which the White House Office of Federal Procurement Policy updated to $770,000 earlier in 2012, has been targeted for lowering by several lawmakers, federal employee unions, and the Office of Management and Budget, though they propose different ceilings and policies on which contractor executive salaries qualify for reimbursement. Contractors argue they need the payments to offer competitive salaries.

The existing policy, Tonko said in his Nov. 16 letter to Comptroller General Gene Dodaro, has seen compensation at contracting companies with sales of more than $50 million “grow by over 20 percent since 2008 while many working Americans have experienced wage stagnation and unacceptable levels of unemployment.”

Tonko asked GAO to review executive compensation costs for federal contractors with the Commerce, Energy, Homeland Security and Transportation departments, as well as NASA, the National Science Foundation and the Environmental Protection Agency.

The exact savings are unclear, Tonko said, but it likely would be in the billions given that the cost of federal service contracts increased from $159 billion in 2000 to $333 billion in 2010.

A GAO spokesman said the watchdog agency typically accepts such requests from chairmen and ranking members, but the formal decision to conduct a study may take a week.


By Charles S. Clark

November 20, 2012

http://www.govexec.com/contracting/2012/11/lawmaker-asks-watchdog-look-contractor-executive-pay-caps/59671/