March 17, 2014

WHITE HOUSE RENEWS CALL FOR CONTRACTOR EXECUTIVE PAY CAP

By ExchangeMonitor

The Obama Administration is making a new push to significantly lower the amount of contractor executive pay that is reimbursed by the federal government. Currently, pay for senior executives under federal contracts is reimbursed up to a cap determined by the annual compensation for top executives at large publicly traded companies, with such a cap amounting to almost $700,000 in 2010 and set to increase further this year, according to Lesley Field, acting administrator of the White House Office of Management and Budget’s Office of Federal Procurement Policy. “Under the law, OMB will soon be forced to publish a notice in the Federal Register that raises the cap even higher—tens of thousands of dollars above what it was in 2010—and taxpayers will continue to have their hard-earned resources spent reimbursing contractor executives far in excess of what can be justified,” Field wrote in an OMB blog post yesterday.

Instead, the White House is reiterating a call first made to lawmakers last year to reduce the cap to approximately $200,000, which would bring it in line with the salaries of senior federal executives, according to Field. “Just as the Government must be prudent in paying its employees, it must also not overpay contractors. To be clear, the proposal does not limit how much contractors may pay their executives—only how much the Government will reimburse them,” she wrote. “As part of the Obama Administration’s Campaign to Cut Waste, we have targeted inefficient spending in contracting across the Federal Government and finally put an end to the uncontrolled growth in contracting spending that occurred during the prior Administration. As part of these efforts, we must also stop overpaying contractors. We hope that, this year, Congress will adopt the Administration’s proposal and finally give our taxpayers the overdue relief they deserve.”

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