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Contractor Pay Cap Going Up 10%

Site: laborcommission.utah.gov

The U.S. government could pay individual top private contractor executives as much as $763,029 despite efforts to reform private sector pay caps, the Washington Post reports.

In April, the Office of Federal Procurement Policy raised the federal cap on reimbursement to contracting executives 10 percent from $693,951.

Moira Mack, an Office of Management and Budget spokeswoman, told the Post that the White House had to raise the cap as a result of a previously set statute.

Companies are able to pay contracting executives on top of the reimbursement they receive from the government.

In March, a group of senators proposed a bill that would lower the maximum amount for reimbursement of government contractor salaries from from $693,951 to $400,000.

The Senate also reviewed a bill in September that would apply to the top five contractor executives and reduce the reimbursement rate from $700,000 to $200,000.

President Barack Obama proposed to change the current contractor reimbursement payment formula, so that payment could not exceed the $199,700 pay Cabinet officials receive.

While some government agencies and officials are concerned with the contractor pay cap increase, several senators have raised concern over government efforts to reduce the federal workforce.

Twenty-six senators told Defense Secretary Leon Panetta in a letter that keeping the federal workforce at its current size or reducing it could potentially lead to managers increasing the use of contractors over civilians at a higher cost.

Stan Soloway, president and chief executive of the Professional Services Council, said private companies are feeling the effects of the fiscal environment in a direct and significant way.

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