Federal Contractors Get 10% Raise

Top federal contractors got a 10 percent raise last month while government workers continue to labor under a two-year pay freeze. The cap on reimbursement to executives of private firms doing government work was raised to $763,029 from $693,951 by the Office of Federal Procurement Policy, The Washington Post’s Federal Diary column reports.

The government had little choice in the matter as the compensation rate is set by law. Companies are also free to pay their executive more than the cap. The Obama administration has proposed replacing the current formula with one that would link contractor reimbursement to the pay of Cabinet officials, which is now just under $200,000, the Post reported.

“In accordance with an outdated statute, the federal government was forced to raise the cap on agency reimbursements to contractors for the pay of senior executives who contract with the government,” Moira Mack, an Office of Management and Budget spokeswoman, told the Post. “With this latest congressionally mandated increase, taxpayers will be on the hook for contractor reimbursements far in excess of what is reasonable.”