Defense contractors paid too much, senator says

Sen. Bernie Sanders is asking Defense Secretary James Mattis to rein in excessive compensation of defense contractors and address the misconduct and fraud in the defense contracting industry.

The Vermont Democratic senator, who is a ranking member of the Senate Budget Committee, said about half of the Pentagon's $700 billion annual budget goes directly to private contractors. He noted that in 2017, the CEOs of Lockheed Martin and Raytheon– were each paid more than $20 million in total compensation, accounting for than 90 percent of those companies' revenue.

"What kind of message does it send when a defense contractor is paid 100 times more than the secretary of defense?" Sanders wrote in the letter dated March 14 to Mattis, adding that paying exorbitant salaries to defense contractor CEOs  “is simply unacceptable."

“I think the American people would like to know why a defense contractor can pay its CEO over $20 million while your salary is capped at $205,700 and other members of the military are paid far less,” he continued.

He said more accountability is needed among those DoD employees who oversee such contracts.

Meanwhile, while these contractors are making significant profits from the federal government, nearly every major defense contractor in the past 20 years has paid millions of dollars in fines and settlements for misconduct and fraud, according to the lawmaker.

Without a specific deadline, the letter asked Mattis to Sanders  a letter with recommendations for improvements on the issues cited.

Reader comments

Mon, May 14, 2018

What a croc! Just go to www.fbo.gov on any given day. Billions being awarded to "contractors" Drain the swamp my azz!

Mon, May 14, 2018

I've been a Contracting Officer for at least 30 years and about to retire. Presidents and Congress continue to freeze government employees pay,cut essential budgets and force Agencies to reduce hiring and training needs. Hence you get Program Managers, Contracting Officers and Project Team members whose skill sets are mostly inadequate to meet the complex scope writing and negotiation demands when dealing with these mega programs. On the other hand the Gov't Team does not have the contract file review oversight and/or sufficient time and resources to effectively handle the preaward process, so eventually the process ends up as a sell-out just to make the award. Thus the end result...over payment in a number of areas. This is apparent in every Government Agency and getting worst. It's a contractor's paradise in these days and times.

Fri, May 11, 2018

All taxpayers should be outraged by stories of private companies goudging the Federal government. However, we must be carefull when we question another person’s salary. Our culture is founded on the idea that every person has the right to make as much money as they can. How’s to say how much is too much. I am a Federal contractor and a Sanders supporter. I make far less that $20M per year. But, I also make far less than $200K a year. So it’s all the same to me when it comes to money. Let’s focus on the really issue of why our government contracts out so much in the 1st place. I bet that if the Federal government did more in-house work we’d see the cost of those contracts come WAY down along with executive compensation.

Fri, May 11, 2018 San Antonio, TX

The real problem here is partly semantics when you talk about contractor pay. I am an NSA retiree, and yes Federal contract workers do on average make more than their gov't counterparts, even when doing the same job. Some a lot more. However, they do not have the job security or other benefits. The gov't also never seems to let contract positions go, they just change companies.I have many friends who basically have worked the same job for many years, but worked for 4 or 5 companies in the process as contracts were won and lost. So while contractor employees often make more $$, that isn't the issue. The issue is what the companies actually get away with charging the gov't for, between two to three times the actual wages. Now they like to say they have to contribute to 401K's, pay for benefits etc.., but sorry, that might be worth half of the salary. By far the largest portion goes to profits. This is why there is also a trend of small startup companies made up of senior experts that are using this as a way to greatly increase their salaries, because they aren't working for a huge company profit. However, these companies also don't tend to provide benefits either. You want a day off, it's just one day less of pay. The point is, either way the government is paying way too much for what amounts to extra employees. At least with the small companies the employees are making the lions share of what they charge the gov't, but the gov't is being ripped off on both accounts. I could see cost of living in places like DC coming into play, but that's not what's happening when they are charging the gov't 2 and 3 times the salary for a position. I know it amounts to price fixing, but there needs to be some way to hold down profits on contract workers salaries. That is what would save the gov't a lot of $$.

Fri, May 11, 2018

Could you possibly find a more irrelevant, pathetic mouthpiece for this cause? Besides, there is a reason for the use of these contractors; they get things done.

Show All Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

Contributors

Edward A. Zurndorfer Certified Financial Planner
Mike Causey Columnist
Tom Fox VP for Leadership and Innovation, Partnership for Public Service
Mathew B. Tully Legal Analyst

Free E-Newsletter

FederalDAILY

I agree to this site's Privacy Policy.

Stay Connected

Latest Forum Posts

Ask the Expert

Have a question regarding your federal employee benefits or retirement?

Submit a question