A proposed change in federal reimbursement regulations could increase costs to taxpayers and unfairly hold government employees to a stricter standard than private contractors, according to nine Senate Democrats.
The senators, led by Sen. Paul S. Sarbanes (D-Md.), objected to the proposed change in a letter Friday to Joshua B. Bolten, director of the Office of Management and Budget. The rule change, sought by the Department of Defense, the National Aeronautics and Space Administration, and the General Services Administration, would allow agencies to reimburse on a lump-sum basis certain relocation costs incurred by contract employees.
Such expenses include the cost of finding a new home, securing temporary lodging and traveling to the new location. Current regulations require detailed itemizations of relocation expenses and apply to federal employees and private contractors alike. The government spends hundreds of millions of dollars each year to cover such costs, according to the Defense Contract Audit Agency.
"We have real concerns about removing accountability requirements for reimbursement of contractor expenses," wrote Sarbanes and his colleagues, who were urged to act by the American Federation of Government Employees.
The other senators who signed the letter were Barbara A. Mikulski (Md.), Edward M. Kennedy (Mass.), Russell Feingold (Wis..), Daniel K. Akaka (Hawaii), Richard J. Durbin (Ill.), Patty Murray (Wash.), Robert C. Byrd (W. Va.) and Joseph I. Lieberman (Conn.).
Chad Kolton, an OMB spokesman, said Bolten had received the letter and officials were studying the matter. Kolton said the idea of switching to lump-sum reimbursement for contractors also came up in 1999 during the Clinton administration. "It's a proposal that's been considered by both Republican and Democrat administrations," he said.
In a Dec. 11 Federal Register notice, the agencies argued that the "proposed rule is expected to reduce the accounting and administrative burden of the relocation cost principle on contractors and lead to faster relocations." The notice said that lump-sum reimbursement had become "common commercial practice" and that costs to the government "are not expected to increase significantly as a result of this revision." And although individual receipts would no longer be required, contractors still would have to show that relocation costs were reasonable, the notice said.
The proposed move was applauded in public comments by industry groups, including the Aerospace Industries Association and the National Defense Industrial Association.
But the Defense Contract Audit Agency and the DOD inspector general both opposed changing the rule, saying such a move would increase administrative costs and make audits more difficult. The AFGE called the proposal "another in a long line of accommodations to the government contracting industry."
The Senate Democrats also expressed concern that proposed changes in regulations covering reimbursement of educational expenses might inappropriately tilt the rules in favor of contract employees.
"Both federal employees and government contractors do invaluable work on behalf of our nation, and it is essential that we treat both groups in a fair and evenhanded manner," they wrote.