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May 13, 2013 By AMK

As federal belts tighten, contractor CEOs enjoy million-dollar raises

On the same day in March that Lockheed Martin warned that the sequester could lead to thousands of employee furloughs and layoffs, the nation’s largest federal contractor disclosed that it had just boosted the compensation of its former CEO by more than $2 million.

Former Lockheed CEO Robert Stevens, who retired as CEO on Jan. 1 but remains chairman, saw his overall compensation rise from $23.4 million in 2011 to $27.5 million in 2012, according to Securities and Exchange Commission (SEC) forms.

The disclosure shows how even with a looming sequester, budget standoffs and defense cutbacks, federal belt-tightening hasn’t yet hit the wallets of top executives for some of the nation’s biggest federal contractors.

Keep reading this article at: http://www.federaltimes.com/article/20130423/ACQUISITION03/304230001/As-federal-belts-tighten-contractor-CEOs-enjoy-million-dollar-raises 

Filed Under: Government Contracting News Tagged With: budget cuts, compensation, DoD, executive pay, Lockheed Martin, POGO

May 14, 2012 By AMK

OFPP nominee speaks about his qualifications, acquisition workforce, contractor compensation, and multiple award contracts

Joe Jordan defended his qualifications last Wednesday to be the next administrator of the Office of Federal Procurement Policy. But the concerns may be less about Jordan and more about the shoes he has to fill.

Jordan, who currently is a senior adviser to Jeff Zients, the acting director of the Office of Management and Budget, would replace Dan Gordon, who spent more than 20 years in federal procurement. Jordan also has less experience than the previous five OFPP administrators.

Keep reading this article at http://www.federalnewsradio.com/?nid=522&sid=2859028.

Filed Under: Government Contracting News Tagged With: acquisition strategy, acquisition workforce, compensation, MAC, multiple award, OFPP, OMB

May 8, 2012 By AMK

‘Outdated’ contractor pay cap raised 10 percent

The government now will compensate a federal contractor’s top five senior most executives up to $763,029 annually, the Obama administration announced April 23, an increase that White House officials and some lawmakers have tried to cap at a much lower rate.

The cap, known as the Executive Compensation Benchmark, now increases by nearly $70,000 from $693,951 — 10 percent higher than in fiscal 2010.

Keep reading this article at:  http://washingtontechnology.com/articles/2012/04/23/executive-compensation-benchmark-increase.aspx?s=wtdaily_240412.

Filed Under: Government Contracting News Tagged With: compensation, OFPP, OMB, salary cap

September 21, 2011 By AMK

Defense department contractors may see new hiring regulations

A proposed Defense Department regulation, if implemented, will substantially change how contractors hire, oversee and track certain former civilian and military personnel. As proposed, it will also establish a new suspension and debarment risk for contractors that hire former personnel.

On June 6, the department issued a proposed rule — DFARS Case 2010-D020 “Representation Relating to Compensation of Former DoD Officials” — to require all offerors to submit a representation, upon submission of the offer, that all employees who are former Defense Department “covered officials” (defined in DFARS Clause 252.203-7000), to the best of the offeror’s knowledge and belief, comply with:

  • Defense Federal Acquisition Regulation Supplement (DFARS) 203.171-3 that
    states that covered Defense Department officials must have received or requested
    an ethics opinion on post-government employment restrictions;
  • 18 U.S.C. 207 and 5 C.F.R. Part 2641, which is the statute and regulations
    affecting post-government employment of ex-government civilian personnel and
    military officers; and
  • Federal Acquisition Regulation (FAR) 3.104-2, which implements the
    Procurement Integrity Act.

This proposed rule would likely have the several effects. For example, it will share responsibility for compliance with post-government employment laws and regulations between ex-government personnel to defense contractors. Current post-government employment laws impose criminal and civil liability on ex-government personnel violations.

It will also require defense contractors to implement new compliance measures. To ensure compliance, defense contractors must establish systems and processes to identify, track, educate, and obtain periodic certifications from all employees, consultants, and others who receive compensation and who are former “covered officials.”

The new requirement will burden both smaller contractors that must establish a new compliance program to meet this requirement, as well as larger defense contractors that must levy the requirement on subsidiaries, joint ventures and affiliates, even those entities that are non-government contractors. Any new compliance system obviously will increase contractor overhead costs, which often are passed on to the government.

It will also impose on defense contractors a new liability over which they have no control. Because the proposed regulation does not limit the certification to the activities of the former “covered employees” on a Defense Department contract or even related to employment by the contractor, the contractor will be required to certify compliance of its employees even as to their personal, off-duty activities.

Consultants and part-time employees working for other companies or organizations may violate their restriction in pursuit of other activities wholly unconnected to the certifying contractor. For example, an ex-military officer employed by a contractor may violate her representational restrictions under 18 U.S.C. 207 by contacting the government on behalf of another company for which she is consulting, or even as a volunteer for a civic,
charitable or scouting organization.

The proposed regulation may also deter smaller companies from bidding on Defense Department contracts. Smaller commercial contractors with less sophisticated employee screening and tracking systems may view this requirement as too costly to introduce across their enterprise in order to seek new defense business.

Another result may be that contractors will be deterred from hiring ex-military and Defense Department personnel. The proposed rule imposes both a new risk of non-compliance, which could lead to suspension and debarment or liability under the False Claims Act, as well as a new requirement for a compliance system to mitigate the risk. Thus, defense contractors likely will be deterred from hiring ex-military and department personnel. Ironically, this proposed rule red flags former department personnel — including Title 10 reserves and National Guard personnel — as potential burdens for Defense contractors.

The proposed regulation applies only to “covered officials,” but the difficulty in identifying who qualifies as a “covered official,” may cause defense contractors, especially smaller contractors, to simply close the door to all former department personnel.

Another potential consequence is that it may deter civilian federal employees from working in the Defense Department. Since the restrictions apply only to former department personnel, civilian employees, especially procurement and senior program managers who qualify as “covered employees,” may choose to serve in other federal agencies instead of Defense, if they envision post-government employment in the commercial sector. This obviously would frustrate Defense Department efforts to build a world-class acquisition work force.

The bottom line is that the proposed regulation offers several dysfunctional, expensive, and possibly unintended consequences that the Defense Department hopefully will address as it considers whether it should be implemented.

– by Steve Epstein, chief counsel for ethics and compliance at The Boeing Company. The views expressed are solely those of the author. Published by National Defense magazine, October 2011 at http://www.nationaldefensemagazine.org/archive/2011/October/Pages/DefenseDepartmentContractorsMaySeeNewHiringRegulations.aspx

Filed Under: Government Contracting News Tagged With: acquisition workforce, compensation, compliance, debarment, DoD, ethics, False Claims Act, procurement integrity, small business

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