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News in brief: Week of June 3

Jun. 2, 2013 - 06:00AM   |  
By Staff report   |   Comments

White House wants new contractor pay caps

The Obama administration unveiled a plan last week to halt what the White House’s top procurement policy official called “excessive” compensation to federal contractors.

Joe Jordan, administrator of the Office of Federal Procurement Policy, wrote in a blog post that the administration will send a plan to Congress this week to abolish the current formula on contractor compensation caps.

The government now compensates some contractors under a formula tied to private-sector rates, but the proposed cap would be tied instead to the president’s salary, which is $400,000.

Under current law, contractors paid based on their incurred costs — a form of procurement representing about one-third of all federal contract spending — can seek reimbursement from the government for executive pay, Jordan wrote.

Blaming “congressional inaction,” Jordan said the administration was forced to raise the compensation cap to $763,000 in 2011, with the cap expected to increase in coming weeks to more than $950,000.

“This wasteful expenditure of taxpayer resources must stop,” Jordan wrote.

The plan doesn’t affect how much contractors can pay their executives, but it would limit how much they can bill the government.

OMB: Agencies should plan for up to 10% cut in FY15

Agencies’ fiscal 2015 budget requests should be 5 percent below the amounts President Obama outlined for them in April, Office of Management and Budget Director Sylvia Burwell said in instructions released last week.

And to give the White House more budget-cutting options, agencies should also lay out additional reductions to bring discretionary funding totals to 10 percent below what Obama has set for 2015 in his fiscal 2014 budget plan, Burwell said in the guidance posted on OMB’s web site.

The guidance is similar to what OMB issued last year; it is noteworthy for its position that agencies should again ignore the possibility of another sequester. Obama’s 2014 budget request includes “a balanced approach with more than enough deficit reduction to cancel sequestration,” Burwell said.

For the first time, however, OMB orders agencies to add a separate section spelling out ways to reduce program fragmentation, duplication and overlap. Those recommendations should address Government Accountability Office suggestions in the same area, Burwell said.

Agencies also are supposed to couple updated strategic plans with their 2015 budget submissions that provide “an ambitious yet realistic expectation of the impact achievable as a result of proposed budget policy,” she said.

Draft strategic goals and objectives, along with agency priority goal areas, are due to OMB by June 3. Fiscal 2015 budget submissions are likely due in the fall.

Navy delays NGEN award - again

The Department of the Navy has further delayed a contract award for its Next Generation Enterprise Network.

Navy officials announced last week that the award date would be pushed back from May 31 to June 30 and that officials would hold another round of discussions with offerors determined to have the most highly rated bid proposals.

This isn’t the first time Navy has delayed the NGEN contract award. Officials had planned to award one or two contracts by Feb. 12 to develop the massive private network but delayed the award date to May due to complex requirements. NGEN will replace the Navy-Marine Corps Intranet, a contractor-owned network.

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