Skip to content

Peters Joins Bipartisan Effort to Crack Down on Fraudulent and Undue Bonus Payments to Contractors & Save Taxpayer Dollars

WASHINGTON – U.S. Senator Gary Peters (MI), Ranking Member of the Homeland Security and Governmental Affairs Committee, announced that he has cosponsored bipartisan legislation with U.S. Senator Joni Ernst (R-IA) to rein in excessive spending on unwarranted bonuses to contractors that fail to meet certain standards on federal projects. The Bogus Bonus Ban Act would prohibit taxpayer dollars from being used to pay bonuses to government contractors for unsatisfactory performances and outcomes, including projects that are over budget or behind schedule.

“Taxpayers shouldn’t have to foot the bill for bonuses that go to contractors that fail to complete their projects on time or on budget,” said Senator Peters. “It’s just commonsense – a job well done deserves to be rewarded, but too often companies that perform inadequate work get bonuses they haven’t earned. I’m proud to join this bipartisan effort to crack down on this wasteful spending and ensure that taxpayer dollars are being used responsibly.”

“Over budget, behind schedule, and millions of dollars’ worth of bonuses? It’s hard to believe, but federal contractors rake in millions in bonuses even for projects that go nowhere. That kind of unaccountability is simply ridiculous,” said Senator Joni Ernst. “This bipartisan bill would ensure Iowa taxpayers know where their money is being spent by preventing the federal government from awarding bonuses for work that doesn’t meet the requirements of a contract. When hard-working Iowans set out on a task, they see to it that the job gets done. Federal contractors need to do the same.”

Many federal projects provide an incentive fee, or bonus, that a contractor can earn in addition to other payments. Although regulations say otherwise, some agencies have continued to award undeserved bonuses to contractors despite unsatisfactory performances, such as projects that are over budget or behind schedule. In other cases, contractors have received fraudulent bonuses after providing false information about their performance. For example, a contractor that maintains U.S. military housing was found to have defrauded taxpayers of millions of dollars in bonuses by falsifying maintenance records at military bases. Last year, Peters pressed Service Secretaries and Service Chiefs from all branches of the U.S. military at a Senate Armed Services Committee hearing on the poor living conditions servicemembers and their families have reported in privatized housing on military bases across the country.

The Bogus Bonus Ban Act would require contractors to meet certain performance outcomes and keep work on budget and on schedule in order to receive bonus payments. The legislation would also improve transparency on how taxpayer dollars are spent by requiring public disclosure of bonuses that are awarded to federal contractors.

Senator Peters has long fought to rein in improper and wasteful spending by the federal government to ensure the responsible use of taxpayer dollars. Last year, Peters’ bipartisan legislation to streamline the federal inventory review process and save taxpayer money by selling or disposing of excess property or supplies was signed into law by President Trump. The U.S. Senate unanimously approved another Peters-led bill to cut wasteful government spending by reducing duplicative, excessive, unnecessary, and improperly documented payments, which cost the federal government more than $151 billion in fiscal year 2018 alone. The Homeland Security and Governmental Affairs Committee also unanimously approved a Peters bill to save millions of taxpayer dollars by curbing erroneous payments to deceased individuals.