Union urges curbs to contractor salaries

Spurred by the several legislative and policy proposals targeting the federal workforce, a prominent labor union is raising concerns about what it calls “excessive” contractor salaries and is suggesting that contractor employees shouldn't earn more than $200,000 annually.

In a letter sent May 12 to the leaders of the Senate Budget Committee, the American Federation of Government Employees 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.

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