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NTEU Applauds Senate Approval of Cap On DoD Contractor Pay Reimbursement

Wednesday, December 5 2012

Washington, D.C.—Senate approval yesterday of language capping reimbursement of contractor salaries is an important and welcome step forward in lifting an outlandish burden from America’s taxpayers, the leader of the nation’s largest independent union of federal employees said today.

“At a time when our economy is struggling, millions of Americans are unemployed, and our national debt and deficit continue to grow, taxpayers should not fund exorbitant government reimbursements for exorbitant private contractor salaries,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU).

The NTEU leader was reacting to Senate approval of the Fiscal 2013 Defense Authorization Bill, S. 3254, containing NTEU-supported language offered by Sen. Joe Manchin (D-W.V.) to cap contractor salary reimbursements at $230,700, and requiring the Department of Defense (DoD) to issue a report detailing contractor compensation costs over the past several years. The latter amendment was offered by Sen. Barbara Boxer (D-Calif.) and Sen. Charles Grassley (R-Iowa).

Among other information, Kelley noted, the report would include the number of contractor employees paid in excess of the cap in fiscal years 2010, 2011 and 2012.

Presently, within DoD, the reimbursement cap is $763,029 for the salaries of all contractor employees; that is more than double what it was in 1998. The cap climbed by some $10,000 just in 2012. President Kelley, who has been a leader in seeking to lower the cap, noted that while private sector companies can pay their employees whatever they believe those employees are worth, “there is simply no supportable rationale to have taxpayers pay this exorbitant sum.”

NTEU has been active on a variety of fronts in its efforts to reduce the cap. It joined in a letter on that subject from other federal union leaders and officials of various public interest groups to Sen. Richard Durbin (D-Ill.) and Sen. Jerry Moran (R-Kan.), chair and ranking member of the Senate Financial Services Appropriations Subcommittee; and Reps. JoAnn Emerson (R-Mo.) and Jose Serrano (D-N.Y.), chair and ranking member of the House Financial Services Appropriations Subcommittee.

The letter was in support of language in S. 3301, the Fiscal 2013 Financial Services and General Government Appropriations Bill, which would lower the cap to $400,000 and expand it all contract employees government-wide, not just DoD contractor employees. Outside of Defense, the reimbursement applies to a contractor’s top five senior employees.

NTEU also supports pending free-standing legislation to expand and lower the salary reimbursement cap throughout government. This includes H.R. 2980, introduced by Rep. Paul Tonko (D-N.Y.) to lower the cap to $200,000; and a bipartisan bill in the Senate, S. 2198, introduced by Senators Boxer and Grassley to cap the salary reimbursement at $400,000.

NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.

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