Union puts bull's-eye on contractor pay

Labor group urges cuts to contractors if workers targeted

If legislative and policy proposals are targeting federal workers, then contractor salaries should have a bull's-eye on them too, according to a prominent labor union.

In fact, the American Federation of Government Employees is suggesting that no contractor employee should earn more than $200,000 annually.

In a letter sent May 12 to the leaders of the Senate Budget Committee, the union urged lawmakers to reject recent proposals aimed at reducing federal salaries or shrinking the size of the federal workforce without corresponding cuts to federal contracting.

AFGE touched on several workforce-related issues, including the Defense Department’s plan to cap the size of its civilian workforce at fiscal 2010 levels.

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The union said the Army alone will have to reduce its workforce by 33,000 civilians over the next few years. “In practical terms, the initiative will require new work and expansions to existing work to be automatically contracted out – even if we can do the work more efficiently or the work is inherently governmental,” Beth Moten, AFGE’s legislative and political director, wrote. “The initiative has put the civilian workforce back into a death spiral.”

AFGE also said while politicians continue to attack federal pay levels, there has not been much talk about the amount of pay contractors receive.

“What’s been conspicuously missing from the debate, of course, has been any discussion of pay for contractors – even though the number of contractors exceeds the number of federal civil servants and many contractors earn several times the maximum federal salary,” Moten said.

The union cited the five highest salaries at government contractor Booz Allen Hamilton – ranging between $3 million and $4 million – to illustrate its point. It also recommended that contractor salaries be restricted so that they are not reimbursed by taxpayers in excess of what is earned by officials who fill cabinet level positions.

“By implementing this reform, we can save money for the taxpayers and ensure that the highest paid contractors are finally required to make sacrifices,” Moten wrote. “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.”

About the Author

Alyah Khan is a staff writer covering IT policy.

Reader Comments

Mon, May 23, 2011

Salary caps for one! Salary caps for all! From each according to his abilities! To each according his needs! Where have we heard this before? Where have we seen this philosophy fail before?

Mon, May 23, 2011

Its simple, and everyone here has touched on it directly or otherwise. As a contractor our pay is limited to the value that the government places on each of the jobs that we perform, we are at will, which means in real words, less job security. I don't see the unions trying to limit how much the burger flippers at mickey d's make. The unions in this country used to be a good thing, now they need to figure out how to mind thier own business. And of course the press bit on it hook, line and sinker. Just another way to devalue our workforce that much more. Union's get a life.

Thu, May 19, 2011

Thank God for Federal workers, their reliability, continuing existence and the consistent level of service they provide to the taxpayers. Their consistent, predictable performance and pride in not even appearing to care about their productivity level always drives up the demand for contractors. Conventional wisdom says that Feds have close to guaranteed jobs, but as long as they underperform the government always comes back and depends on contractors like me. So everytime a Fed dismisses me in an agency building, treats me rudely, addresses me without making eye contact, or as a subspecies of the human race I say "Thank you for all you do for me and my family, we couldn't pay the mortgage without the work you do". I have never considered moving from this area, because in other parts of the country when businesses mismanage they run out of money and jobs are lost. In the DC metro area when the government mismanages money they borrow more and hire contractors. Circle of Life, Fed style. I can only hope this delicate beautiful dance keeps going until my kids graduate college and through their tax dollars they can keep the dance alive, and I have enough to retire.

Wed, May 18, 2011 Mike

If the government workers did their jobs then I wouldn't even have one. Not to mention, I don't get retirement after a relatively short career, job security, a job description so narrow I can choose to do nothing and have union protection, full benefits, etc. Contractors have to actually work or they get fired, not so the unionized govies. As was already stated, those executives are not government contractors receiving those salaries. They are drawing their profits from me doing the same job that would take 5 govies to do.

Tue, May 17, 2011 Fred the Fed (contractor)

Fred to earth: In DoD contracting, there's a cap on salaries that can be billed to the government. The much, much higher compensation paid some executives is all from profit--not from hours billed to the government and not from indirect costs (overhead, etc.) allowed by the government. In other words, these salaries in the stratosphere would have to be only from the bottom line, on a very very large base of revenue. The profit margins at the most successful contractors are no better than the third quartile of the S&P 500. You probably own mutual funds with portfolios of firms with similar profit margins. Get a grip, it's legal and it's ethical. As usual, government folks, not to mention some media, do not know.

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