Let’s make damn sure we cap executive compensation for govt contractors while we’re at it.
Agencies have reimbursed contractors for their executive salaries in one form or another since a 1997 law enabled it, a practice that seems reasonable to some and objectionable to others.
While there is a debate over whether government should do it at all, perhaps the more pressing issue is at what level the reimbursements should be capped.
“We’re near the boiling point,” said Trey Hodgkins, senior vice president of global public policy at TechAmerica.
The cap, calculated based on a formula first devised by the Clinton administration’s Office of Federal Procurement Policy, was $693,000 in 2010 and rose to $763,029 in 2011. According to current OFPP administrator Joe Jordan, the cap will next have to be bumped to $950,000 if no legislative action is taken.
The struggle over current federal contractor reimbursement levels has its roots in 1997’s Internet-fueled economy. At the time, now-retired Sen. Joe Lieberman, (I-Conn.) and others in government were concerned that top executive talent at private companies, immersed in the white-hot, high-tech-driven environment of the time, would eschew government contracts in favor of more lucrative private industry work. The idea was to sweeten the pot for contractors, adding funds to cover some or all of their executive salaries. It applies only to cost-reimbursement contracts.
