PSC Challenges OFPP on Benchmark Compensation Amount for Contractors

Arlington, Va., December 4, 2013—The Professional Services Council (PSC) today questioned the Office of Federal Procurement Policy’s (OFPP) announcement raising the government-wide ceiling for reimbursing certain executives and employees of federal contractors. While federal law requires OFPP to recalculate the cap annually based on a formula established more than a decade ago, the cap put into effect today is for fiscal years starting in 2012.
“The timing of this announcement is more than a little curious,” said PSC president and CEO Stan Soloway.  “Even as OFPP releases this action, the House-passed and pending Senate defense authorization bills contain provisions to alter the traditional method of calculating the benchmark compensation.”

“OFPP has not previously met its obligation to automatically and annually update the benchmark prior to the start of a fiscal year and thus we are confused as to why they felt the need to publish this version now as important discussions regarding revisions are underway in Congress,” Soloway said. 
The OFPP notice also restates the administration’s recommendation to replace the current formula for measuring contractor compensation in relationship to the compensation offered in the commercial marketplace with a cap based on the salary of the president. 

“PSC has repeatedly highlighted the problems with the administration’s proposal, including the flawed comparison of matching a contractor employee’s total compensation as required by the statute with the president’s salary,” Soloway said. “It is a flawed and intellectually inconsistent proposal.”

“It is regrettable that OFPP has refused PSC’s long-standing request to discuss options for updating the formula and the benchmark levels to better account for current comparisons between the government contractor sector and the commercial sector,” Soloway said. 

“While PSC has been involved in and supportive of House and Senate efforts to rationalize this process, we have deep concerns that some of the alternatives being considered in Congress will significantly affect small and mid-tier firms and jeopardize all contractors’ access to critical talent,” Soloway said. “We know Congress is also concerned about this talent risk because of the large number of exemptions from the cap that are included in several of these proposals.”

“This is not the time to stir the pot with unnecessary actions; it is time for serious conversations,” Soloway said.


About PSC: PSC is the voice of the government professional and technical services industry. PSC’s more than 370 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.
Elise Castelli
Media Relations Manager
Professional Services Council
Direct:  703-875-8974
Office:  703-875-8059