NDAA Conference Report Addresses Top PSC Concerns

Arlington, Va., December 19, 2012—The conference version of the 2013 National Defense Authorization Act addressed three of the Professional Services Council’s top concerns about the bill. 

“We are pleased to see common sense has prevailed on the key issues of workforce strength, contractor compensation and access to internal audits,” said PSC President and CEO Stan Soloway.

Sec. 955 (formerly Senate Sec. 341): Rather than mandating civilian and contractor workforce reductions at a set ratio, as Senate Sec. 341 required, the new provision gives the Defense Department needed flexibility to develop an efficiency plan to adjust civilian and contractor staffing to meet the department’s actual needs. 

“Requiring DoD to make equal cuts across its blended workforce would have deprived the department of the ability to make strategic decisions about how to best meet its mission needs,” Soloway said. “We’re glad Congress listened the call from us and others to reinforce DoD’s ability to make strategic decisions about its total workforce needs and how best to balance their continued use of military personnel, DoD civilians, and contractors. Such flexibility is necessary as the mission needs of the department change.”

Sec. 864 (formerly Senate Sec. 842): Rather than arbitrarily set the allowable compensation cost limits contractors could be reimbursed for at the salary levels of the Vice President, as Senate Sec. 842 would have imposed, Sec. 864 smartly requires the Government Accountability Office to conduct a comprehensive study of the effects reducing compensation reimbursements would have on the department, it’s industrial base, and contractor employees. 

“Throughout this debate, PSC has called for a comprehensive analysis of the impacts of moving the contractor compensation cap from the formula in current law to an arbitrary limit that does not reflect the commercial value of the critical skills contractors employees hold, particularly when such limitations on compensation for federal employees are already hindering the government’s ability to recruit and retain highly skilled professionals,” Soloway said.

“Nevertheless, PSC remains opposed to any proposal that would drive critical skills away from the federal marketplace, whether it’s a cap on federal employee compensation or contractor compensation,” Soloway said. “A far wiser path forward would focus on giving agencies more flexibility in how they hire, compensate, and develop different employee groups, rather than imposing sweeping pay and hiring freezes.”

Sec. 832 (formerly Senate Sec. 843): Rather than grant the Defense Contract Audit Agency unlimited access to defense contractor internal audit reports and working papers, as Senate Sec. 843 provided, Sec. 832 ensures that DCAA cannot use internal audits and supporting materials for purposes other than assessing risk and evaluating the efficacy of contractor internal controls and the reliability of associated contractor business systems. The new provision also denies auditors the ability to disapprove a system based on internal audit information alone.

“While PSC continues to oppose granting DCAA access to contractors’ internal audit reports because systems can and have been effectively evaluated without such intrusions into privileged information, we’re pleased to see that the Congress has inserted some protections from unfair audit practices for businesses,” Soloway said.


About PSC: PSC has been the voice of the government professional and technical services industry for 40 years. PSC’s more than 350 member companies represent small, medium, and large businesses that provide federal agencies with services of all kinds, including information technology, engineering, logistics, facilities management, operations and maintenance, consulting, international development, scientific, social, environmental services, and more. Together, the trade association’s members employ hundreds of thousands of Americans in all 50 states. Follow PSC on Twitter @PSCSpeaks and @StanSoloway.