Contractors get pay freeze at Energy Department

75,000 workers affected

EDITOR'S NOTE: For an update on the Energy Department's unique authority to freeze contractor pay, click here.

Contractors at the Energy Department can forget about raises and bonuses as the agency has frozen salary increases for contractors who manage day-to-day operations at certain agency sites, including national laboratories. 

The contractor employee pay freeze follows the Obama administration’s recent proposal of a two-year pay freeze for all civilian federal employees.

“As our nation continues to recover from these challenging economic times, households and small businesses across the country are making sacrifices,” Energy Secretary Steven Chu said Dec. 17. “In this spirit, we are asking our contractor employees, who are doing important research, operations and environmental cleanup work, to join the federal workforce in playing a part.”

Related coverage:

After the spending bill: What now?

Spending bill withdrawn

Senate leaders withdrew an omnibus spending package Dec. 16 that included the administration’s federal employee pay freeze proposal, and it is unclear how and when the governmentwide freeze would be implemented.

DOE's freeze will affect 75,000 workers at 28 agency sites and will go into effect Jan. 1. For salary increases that have already been approved and implemented, the freeze will begin at the start of the next salary increase cycle and also last two years, according to the department.

About the Author

Alyah Khan is a staff writer covering IT policy.

Reader Comments

Fri, Dec 24, 2010

In response to the comment regarding paid two week vacations for all DOE contractors... I'm a DOE contractor. Your statement is false. Our facility will be functioning throughout the holiday season. Anyone who takes vacation during this period will use their regular yearly vacation time, accumulated in the same manner that private sector workers do. Also, workers at our facility make less in salary than they would at private sector jobs. Some accept the lower pay because they believe in the mission, but in my experience, most do because it's close to home, and the health benefits are a little better. Unfortunately, the benefits are being cut more and more every year. While I can't say you didn't hear what you heard, I'd ask that you don't make broad generalizations based on a conversation with one person. You have a right to your opinion, but I'd encourage you to research the topic further.

Wed, Dec 22, 2010

For clarity. When the DOE states "Contractors" it is talking about the Laboratory contractors. Laboratory contractors are an extension of Government employees. So the Federal Government "contracts" out to various federal and state agencies, large conglomerates, and, in this case, universities. This is different than your regular government contractor from the private sector. Basically, these people ARE Government employees, just under a different umbrella.

Wed, Dec 22, 2010

What the article does not explain is that the National Laboratories are considered prime “contractors” to the Department of Energy, and it’s a cost plus award contract. Cost-plus means the higher the salary paid to Laboratory employees, the more money the Laboratories make. So, I salute Energy Secretary Steven Chu.

However, Mr. Chu can do better by looking not only at salary freezes but monitoring and cutting benefits. For example, I was at one of the Laboratories just the other week, talking with one of the contractors (a.k.a. Laboratory employees). We ended up discussing what we were going to do over the holidays. During our conversation, he mentioned that he and all the other Laboratory employees would be receiving two (2) weeks off with pay for the holiday vacation, in addition to his regular vacation time.

So let’s calculate this. Let us say the average salary at the Laboratories is $40 per hour * 80 hours (or 2 weeks) = $3,200 per employee. Just laboratory employees alone (75K) would mean $240,000,000.00 for holiday benefits. Instead, let’s take this money and use it to pay off our National debt. Let’s go even further to not just freeze Government / Laboratory pay, but decrease it to commercial levels (approximately 20-40%) and we will definitely save millions to billions of dollars.

In addition, this employee also mentioned that he is making $110K. For his skill set, the average commercial salary is approximately $65K.

When other “contractors” and companies are working hard during the holidays and trying to make ends meet, this is the arrogant attitude the Laboratory employees exude. Tax payers of course cannot afford such elaborate salaries and benefits, and just provides more examples of wasteful spending and runaway salaries and benefits.

Wed, Dec 22, 2010 New York

Freezing Federal. contractors' pay is bull. Steven Chu is a kiss up and does not care about hard working men and women who DID NOT cause the goverments problems. Why should they sacrifice their hard earned raise and live on a fixed income for two years while everything else is going up? The money for the raises was allocated and now Chu is taking it back. Where is it going? To anotehr bull sh_t situation that keeps taking and doesn't give back? Where has the rights and respect of the hard working middle class gone? Steven Chu has screwed many people by extending the freeze to workers who aren't Federal workers and do not have federal benifits.

Wed, Dec 22, 2010 Virginia

Misleading at best and likely inaccurate. Under what legal and contractual authority could Mr. Chu compel corporations to freeze the pay of their private sector employees? While not privy to DOE contractual arrangements, it would seem the only mechanism available is to affect contract funding. Mr. Chu's ask is a disingenuous ploy, a reach for some power that he does not, and should not, have.

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