Tuesday, July 19, 2011

More Pressure to Limit Employee Compensation

The American Federation of Government Employees (AFGE) sent a letter to the President recently, recommending a cap on taxpayer reimbursement for contractor salaries at the level of a cabinet secretary (currently $199,700).  In their view, while politicians have been attacking the compensation levels of civil servants, no one is addressing the elephant in the room, excessive compensation for private sector workers whose salaries are paid for in whole or in part by taxpayers. AFGE writes "...at a time of budget stringency, few parts of the budget or tax code should be off limits for scrutiny - and certainly not the lucrative salaries for contractors that are ultimately paid for through taxpayer dollars."

AFGE did not provide an estimation as to how much might be saved under their proposal. In the scheme of things, it may not be all that much. But as Senator Everett Dirkson once was reported to have said, a billion here and a billion there and pretty soon you're talking about real money.

AFGE wants all agencies to immediately include the following clause in each solicitation:

No funds obligated under this contract shall be used to pay compensation to any individual, either as a direct cost or as an indirect cost, or proration at a rate in excess of Level 1 of the Executive Schedule prescribed at 5 U.S.C. 5312. Proration means that the amount charged for less than full-time employee cannot exceed an annualized rate equal to the authorized Executive Level I rate. This applies to all functions performed using contract funds including subcontracts. (The Executive Schedule Level 1 rate is currently $199,700).

Further, AFGE wants to amend FAR 31.205-6(a) - Compensation, to add the same provision.

AFGE points out that this provision would not cap contractors' salaries. It would only limit the amount that contractors can be reimbursed by taxpayers.

The AFGE is a federal employee union representing 600 thousand federal workers. AFGE provides legal representation, legislative advocacy, technical expertise and information services.

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