Varied views on new contractor-pay cap

(Kim Hong-Ji/Reuters)
(Kim Hong-Ji/Reuters)

Federal worker unions have applauded a new limit on pay for government contractors, but one industry group has warned that the “arbitrary” cap will cause problems for those who do business with federal agencies.

The restriction, which came as part of the new budget deal Congress and President Obama approved last month, reduced the highest level of contractor compensation from its previous annual limit of $952,000 per individual to $487,000 per individual, a drop of nearly 49 percent.

The Professional Services Council, a group that represents the professional- and technical-services industries, said in a statement on Friday that the rule will “inhibit the ability of companies to attract top talent.”

The organization also said the government needs to clarify the rules on exemptions allowed for specialists in science, engineering or other positions that agencies deem necessary to ensure access to critical skills. PSC president and CEO Stan Soloway said delays in finalizing the regulations would “cause contracting and accounting havoc across the government.”

Federal worker groups have lobbied for years to reduce the cap, arguing that the government should dedicate more money toward new hires and that contractors were getting rich at the expense of middle-class federal employees.

The American Federation of Government Employees has argued since at least last year for lowering the limit to $230,700, which would match Vice President Biden’s salary in 2013. The organization included that proposal in its list of 2014 legislative priorities.

The National Treasury Employees Union has also pressed for a contractor-salary cap in recent years, and the group said its legislative priorities for 2014 will include continued efforts on that front.

Follow Josh Hicks on TwitterFacebook or Google+. Connect by e-mail at  josh.hicks@washpost.comVisit The Federal Eye, The Fed Page and Post Politics for more federal news. E-mail federalworker@washpost.com with news tips and other suggestions.

Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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