WASHINGTON – Maryland and Virginia senators are criticizing a proposal that would lift spending caps on relocation expenses incurred by federal contractors but would keep caps in place for federal workers.
The proposed change would reimburse contractors for all “reasonable” costs associated with relocation. That change is supposed to ultimately save money for the federal government by cutting down on auditing and administrative costs that arise from the “unnecessary micromanagement” of contractors.
But a federal workers’ union said the move could cost as much as $250 million in extra moving costs, with no evidence that they will be offset by administrative savings.
The senators are pressing the Office of Management and Budget to dismiss the proposal, which they say is an affront to federal employees.
“It’s simply an issue of fairness,” said Jesse Jacobs, a spokesman for Sen. Paul Sarbanes, D-Baltimore. “If the rationale is that [the change] will save money, then the same standards should apply for both.”
Currently, the federal government will reimburse no more than 10 percent of the closing costs of a home sale, 5 percent of the cost of a new home and 40 days of lodging for house-hunting trips, for both federal employees and federal contractors.
The Civilian Agency Acquisition Council and the Defense Regulations Council proposed lifting the cap on contractors. The Office of Management and Budget has final say on whether the proposal will be adopted or not.
Sarbanes, along with Sens. Barbara Mikulski, D-Baltimore, John Warner, R- Va., Charles Robb, D-Va., and Daniel Akaka, D-Hawaii, wrote to the OMB suggesting that the change would in fact result “in greatly increased costs to American taxpayers.”
“Federal employees and contractors should be treated the same,” said Paul Cardus, an Akaka spokesman. “This rule does not set any guidelines for contractors and no one has put anything forward that it will save money.”
An OMB spokesman said the senators’ letter is under review. He would not say when or how the OMB might act on the issue.
The American Federation of Government Employees is strongly urging the OMB to reject the proposal and is encouraging Office of Personnel Management Director Janice Lachance to oppose it. The union estimates that lifting the caps could cost as much as $250 million a year.
“Taxpayers would be forced to pay travel and relocation costs for contractors at levels significantly in excess of those available to federal employees,” AFGE President Bobby Harnage said in a prepared statement. “There is no justification for this administration to favor contractors over federal employees.”
Several federal agencies have also jumped into the fray. The General Services Administration, the Environmental Protection Agency and the inspector general of the Defense Department have argued against the change.