White House Makes Few Friends in Raising Contractor Pay Cap

White House Makes Few Friends in Raising Contractor Pay Cap

By Charles S. Clark 11:58 AM ET


In a memo quietly published in Wednesday’s Federal Register, the White House procurement chief instructed defense and civilian agency heads to raise the cap on taxpayer funds that can be used to reimburse contracting companies for the pay packages of top executives.

Beginning with contracts let in fiscal 2012, the maximum reimbursement level is $905,308, an increase of $190,000. The cap is based on a formula mandated by law, according to the memo from Joe Jordan, administrator of the Office of Federal Procurement Policy.

“Under current law, the administration has no flexibility to depart from the statutory requirement that the cap be adjusted annually based on the application of the statutorily-mandated formula,” Jordan’s memo said. “The administration has strongly reiterated the need for reforms to the current statutory framework and Congress has considered several proposals to reform the compensation cap. To date, however, Congress has not revised the cap amount or the formula for adjusting the cap,” other than enacting a small change in 2011 expanding the cap on pay on defense contracts to cover all employees, rather than the five highest-paid. Continue reading “White House Makes Few Friends in Raising Contractor Pay Cap”

OFPP’s proposed increase in contractor salary cap upsets all

OFPP’s proposed increase in contractor salary cap upsets all

Thursday – 12/5/2013, 4:27am EST

The Office of Federal Procurement Policy made nobody happy Wednesday when it raised the cap executive pay for contractors by $190,000 for fiscal 2012.

In a Federal Register notice, OFPP Administrator Joe Jordan said the new benchmark for allowable costs would be $952,308, up from $763,029 in 2011.

What’s unclear is why OFPP is announcing the cap for 2012 when fiscal 2014 started Oct. 1. Continue reading “OFPP’s proposed increase in contractor salary cap upsets all”

As a Federal Employee and Taxpayer – I’m Tired of Paying for Your HIGH Salaries!

Office of Management and Budget

Office of Federal Procurement Policy Cost Accounting Standards Board Executive Compensation, Benchmark Maximum Allowable Amount

For 2011, the allowable costs were set at $763,029!

The allowability of the compensation costs for the senior executives of Government contractors is capped by statute (10 U.S.C. 2324(e)(1)(p)  and 41 U.S.C. 256(e)(1)(p)) at a benchmark executive compensation amount.  The benchmark amount does not limit the amount of compensation that an executive may otherwise receive.  However, the compensation costs in excess of the benchmark amount are unallowable costs for Government contract purposes.  While the benchmark executive compensation amount is the maximum allowable amount of compensation costs for certain executives of Government contractors, the benchmark amount as applied to a particular executive is not necessarily a safe harbor.  Without regard to the benchmark compensation amount, the allowable compensation costs for each affected executive are still subject to the Federal Acquisition Regulation and the Cost Accounting Standards as applicable and appropriate to the circumstances, e.g., reasonableness and allocability.  The Executive Compensation Cap is implemented at FAR 31.205-6(p). Continue reading “As a Federal Employee and Taxpayer – I’m Tired of Paying for Your HIGH Salaries!”

2013 Pay Adjustments for Federal Civilian Employees

         12/21/2012                                                                                                                                                           CPM 2012-12

From: John Berry
Subject: 2013 Pay Adjustments for Federal Civilian Employees
On September 28, 2012, the Continuing Appropriations Resolution, 2013 (Public Law 112-175) (Resolution) became law. Section 114 of that law states that “any statutory pay adjustment (as defined in section 147(b)(2) of the Continuing Appropriations Act, 2011 (Public Law 111–242)) otherwise scheduled to take effect during fiscal year 2013 but prior to the date specified in section 106(3) of this joint resolution [March 27, 2013] may take effect on the first day of the first applicable pay period beginning after the date specified in section 106(3).” (See Attachment 1).

Consistent with the Resolution, on December 21, 2012, the President issued a memorandum stating that any increases in pay systems or pay schedules covering executive branch employees or any general increases in covered employees’ rates of pay that could otherwise take effect as a result of the exercise of administrative discretion should not be made until after the date specified in section 106(3) of the Resolution. (See Attachment 2.) The President directed the U.S. Office of Personnel Management (OPM) to issue any necessary guidance on implementing this memorandum. Continue reading “2013 Pay Adjustments for Federal Civilian Employees”

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