The White House is asking Congress to lower the cap on federally reimbursed salaries for top government contractor executives, including those at Hanford.
In 2010, the government was reimbursing some of its contractors nationwide for employee pay up to almost $694,000 annually, according to a blog posting on the White House website this week by Lesley Field, acting administrator of the Office of Management and Budget's Office of Federal Procurement Policy.
Instead, the White House wants the cap on par with the salaries the government pays its own executives, approximately $200,000, Field said.
At Hanford, the five largest prime contractors for the Department of Energy now receive $267,000 to $300,000 to reimburse their pay for the top executive of each. The contractors are CH2M Hill Plateau Remediation Co., Washington Closure Hanford, Mission Support Alliance, Bechtel National and Washington River Protection Solutions.
Companies also may use their own money to add to the pay reimbursed by the Department of Energy, and that would continue under the new policy proposed by the White House.
Since 1995, the U.S. government has been required by law to reimburse senior executives under federal contracts no more than the annual compensation for the top executives at large publicly traded companies.
In 1995, that amount was $250,000. But since then CEO pay has skyrocketed and annual compensation has grown to more than two and a half times that, Field said.
"The president believes that asking the American people to pay a 250 percent-plus raise for contracting executives just doesn't make sense -- especially in the current fiscal environment," Field wrote.
Last fall, Obama asked Congress to scrap the law placing contractor executive pay at the level of senior executives for the top private sector CEOs.
Congress responded by passing a provision in December that made modest changes to the cap for contracts with the Department of Defense and a few civilian agencies, Field said. However, it failed to repeal the existing statutory formula for reimbursing executive pay.
As a result, the Office of Management and Budget will soon be required to publish a notice in the Federal Register that raises the cap by an addition tens of thousands of dollars, Field said.