Monday, October 2, 2017

The Bonus for Cost Cutters Act of 2017

A Bill that would authorize the head of a federal agency to pay a cash award to federal employees who identify unnecessary expenses (i.e. waste, fraud, and abuse) resulting in cost savings for the agency has been introduced in the House and referred to the Committee on Oversight and Government Reform. The maximum amount of the bonus would be $20,000 and certain Government employees would not be eligible including (i) an officer serving in a position at Level I of the Executive Schedule, (ii) the head of an agency, (iii) anyone employed by the Office of the Inspector General, and (iv) a commissioner, board member, or other voting member of an independent establishment.

The Congressional Budget Office (CBO) issued its report on this legislation, noting that there would be no significant additional cost to implement the bill since there are many tools at the Government's disposal under current law to report waste and mismanagement of funds. However, the CBO also said that it wouldn't do much to help reduce wasteful spending because there would be no significant reduction in federal spending because of increased identification of wasteful or fraudulent spending as a result of enacting the bill. The CBO is probably correct. The Government has a lot of priorities and if funds are not spent somewhere, they'll be spent somewhere else. The CBO failed to note however that money spent on wasteful projects means that something else will not get funding.

In the context of this bill, the term "unnecessary expense" means amounts identified by an employee as unnecessary that the CFO of the agency determines are not required for the purpose for which the amounts were made available and the rescission of which would not be detrimental to the full execution of the purposes for which the amounts were made available.

The "unnecessary expenses" would be deposited in the Federal Treasury to reduce the Federal deficit. The agency can retain up to 10 percent of the funds to pay for the cash awards or for other uses of the agency (consistent with other provisions of the law).

There is some concern that this bill, if enacted, could affect contract awards and contract funding - especially funds remaining at year end when the Government slips into its annual "spend it or lose it" ritual - where the Government will spend money on anything as long as it gets spent on something. Many of the "wasted" projects lambasted by Senator Flake in "Porkemon Go" or Senator McCain in "America's Most Wasted" or Senator Lankford in "Federal Fumbles - 2016 Edition" may not have received funding had a bonus incentive been in place at the time someone in the Government decided it was worthwhile to spend money to see if dinosaurs were able to sing.

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