White House Calls for End to Gross Overcompensation of Government Contractor Executives

(National Federation of Federal Employees)

In Washington these days there have been hundreds proposals put forward to reduce the growing national debt, many of which target large cuts to the federal workforce. The politicians who introduce them claim that they are tackling government waste and inefficiency. Most of the time, however, they are just tackling their political opponents across the aisle, and leaving the welfare of the American people on the sidelines. One mostly overlooked proposal, however, could make serious progress at reducing waste and inefficiency, while creating huge savings for the taxpayers.

As part of his deficit reduction plan, the President has proposed to cap the amount that federal contractor executives can receive for services at $200,000 per year. This is a drastic decrease from the $750,000 maximum that contractor executives can be reimbursed on an annual basis today. Though the idea of reimbursing contractor executives even $200,000 per year is not the easiest pill to swallow, it is still a good first step.

“At a time when legislators are looking to slash budgets for doctors, medical researchers, border patrol agents, and food safety inspectors, it is incomprehensible that the government would reimburse contractor executives $750,000 each year,” said NFFE National President William R. Dougan. We are pleased to see the Administration take a firm stance against overcompensating contractor executives. There is no reason that these executives should be paid nearly twice the salary of the President of the United States on the taxpayers’ dime.”

This proposal comes on the heels of a widely circulated report by independent think tank Project on Government Oversight (POGO), proving that contractors almost always cost more than federal employees to perform the same work. The report found that federal contractor billing rates cost on average 1.83 times more than the funds it would take for federal employees to do the job.

“It is downright wrong that contractor executives today are eligible for $750,000 in reimbursements from the taxpayers while hardworking federal employees have had their pay frozen for two years,” said Dougan. “It’s time to bring an end to the practice of paying contractor executives top-dollar rates when civil servants can deliver quality work at a lower cost to taxpayers.”

Continuing:

“This good government policy will ensure that taxpayers’ hard-earned money is well spent on the vital services the American people count on.”