President Obama will purportedly send to Congress proposed legislation this week which will cap reimbursement of all government contractor employee annual salaries at $400,000, the President’s annual (base) salary. The proposed legislation is an expansion of the FY 2013 National Defense Authorization Act (NDAA) approved in early CY 2013, applicable only to Department of Defense Contracts, which would ostensibly apply to all government contracts awarded by civilian government agencies, and elevate the cap from the previously debated ceiling of $230,700 (Vice-President’s salary) to the $400,000 amount.
The administrator of the Office of Federal Procurement Policy (OFPP), Joe Jordan, released a statement that the President is committed to the ongoing policy of “buying smarter” and ending “wasteful, fiscally imprudent contract spending”. The current contractor executive employee annual salary cap of $763,000, according to an Government Executive online article, could rise to $950,000 after OMB releases its findings presumably based on updated salary survey data.
The continued panic among government law makers and the President that spending is out of control in this one narrowly focused area (government contractor employee salaries), when our government representatives are unable or unwilling to control the bleeding of taxpayers in other budget categories, is hypocrisy extraordinaire. Nonetheless, we believe ultimately existing regulatory contractor employee ceiling wage levels for which the government will reimburse government contractors will be lowered, notwithstanding national salary survey data supporting higher wage levels paid to employees/executives working for non-government contractors in the same job categories.
Darryl Walker is a Emeritus Advisor for Government Compliance with Redstone Government Consulting, Inc., and formerly served as an Owner and Technical Director for the Beason & Nalley Government contract consulting group for over ten years. He provides content for our Government Insights Newsletter, provides training courses to government contractor and business community leaders, and consults with government contractors regarding a vast range of issues including cost proposals and presentations, internal controls, proposal preparation, compliance with the FAR and Cost Accounting Standards, litigation support, specialized claims, defective pricing issues, liaison with procurement and DCAA audit officials, and accounting and management systems compliance. Prior to joining Redstone Government Consulting, Darryl worked with the Defense Contract Audit Agency (DCAA) for almost 34 years in a variety of technical and management capacities. During his tenure with DCAA, Darryl provided audit services to a wide range of government agencies, including the Department of Defense, NASA, Department of Energy, Department of Interior, General Services Administration, and Department of Justice. During his experience with DCAA, Darryl audited over 3,000 government contractors throughout the Southeastern United States, Europe, and the Middle East. Education Darryl is a graduate of Texas Wesleyan College with a major in accounting and minor in economics.