Acting Administrator Dan Tangherlini made the announcement in a blog post.

Acting Administrator Dan Tangherlini made the announcement in a blog post. J. Scott Applewhite/AP

GSA suspends hiring, drastically scales back executive bonuses

Agency also eliminates awards program that offered iPods and other high-end prizes.

This story has been updated.

The General Services Administration has decided to temporarily freeze hiring and significantly cut bonuses for senior officials as it continues a review of its operations, the agency’s acting leader announced Tuesday.

The first three months of the review, prompted by revelations of extravagant spending during a 2010 Las Vegas conference, unearthed “clear deficiencies in the area of performance awards,” acting Administrator Dan Tangherlini wrote in a blog post.

As a result, GSA will cut senior executive performance awards by 85 percent in 2012, and the Administrator’s Office will not hand out any performance bonuses for the rest of the fiscal year, the message stated. The agency also is ending the Awards Stores program, which gave employees an opportunity to win iPods, digital cameras and other pricey prizes.

“I believe that these immediate changes will help the agency achieve better clarity about our compensation and hiring processes as we continue to bring the maximum level of efficiency and effectiveness to the work we do every day,” Tangherlini wrote.

Meanwhile, the agency will continue to rethink its structure and compensation system, Tangherlini said. The temporary hiring freeze is “prudent” until that assessment is complete, he said.

The three-month review found more than 15 disparate bonus structures, and raised questions about the agency’s high rate of awarding bonuses and its performance standards, the blog post stated.

House Republicans involved in GSA oversight said the move was practical, but that much deeper changes will be needed. “This is only one small step to reform an agency that has spun out of control,” said Rep. John Mica, R-Fla., chairman of the Transportation and Infrastructure Committee. “It’s common sense that GSA executives responsible for blowing hundreds of millions of the taxpayers’ dollars on lavish conferences, trips to exotic locations and poorly monitored employee gift programs should not be rewarded with bonuses.”

Rep. Jeff Denham, R-Calif., chairman of the Economic Development, Public Buildings and Emergency Management Subcommittee, added “it’s about time this agency is taking responsibility for its outrageous spending habits” and said his panel would keep a close eye on GSA.

But the group representing federal senior executives expressed disappointment with the decision to cut back on performance bonuses.

“My initial reaction is that it’s another overreaction,” said Bill Bransford, general counsel of the Senior Executives Association. “I believe that all senior executives, regardless of how good of a job they do, are being punished because of the misdeeds of one person.”

Bransford said the move to reduce performance bonuses was not good for recruitment into the Senior Executive Service, as such incentives help make the SES attractive. Current pay rates for those in the SES range from a minimum of $119,554 to a maximum of $179,700. An employee who is currently a General Schedule 15, Step 7, earns a base salary of $119,554 and a GS-15, Step 10, earns a base salary of $129,517.

As to whether other agencies might follow GSA’s lead, Bransford said, “Anything is possible, but GSA is trying to do what they can to improve their public relations, and I think this may be one of the things that is occurring.”

Sen. Claire McCaskill, D-Mo., in June released research showing that since 2008, GSA spent about $1.1 million on awards to 84 officials under investigation. The actual sum could be higher, she said at the time, because that figure does not include bonuses for executives involved in the GSA Public Buildings Service’s controversial Las Vegas conference, which resulted in departures of multiple officials after the scandal broke in April.

Kellie Lunney contributed to this story.