FDA promises broad review of bonus programs

A Food and Drug Administration review of compensation and bonus programs predates recent reports that the agency let a $41,000 contract for gift cards to reward employees in one of its divisions, a spokeswoman said on Thursday.

Earlier this week the Washington Post noted that FDA officials announced the review after its Government Inc. blog revealed details of the April gift card contract. But FDA spokeswoman Judy Leon said the probe already was under way and is broader than the contract.

"The leadership is taking a look at all types of compensation bonuses and programs, and making sure they are in line with maintaining and attracting the best people," Leon said. "As the new leadership team comes into place, they want to make sure they're aware of what's going on."

The review was requested by Joshua M. Sharfstein, the former Baltimore city health commissioner President Obama named to be FDA's principal deputy commissioner and lead the agency on a temporary basis until a new chief is confirmed.

In the meantime, FDA is holding off distributing the cards delivered under the April contract with Stratford Gifts. According to postings on the Federal Business Opportunities Web site, the company was to provide 160 gift cards worth about $250 each. The cards were intended for employees of FDA's Center for Devices and Radiological Health; Leon said FDA typically gives such cards to about 15 percent of the workforce.

The National Treasury Employees Union, which represents some FDA employees, praised the idea of gift card incentives for workers who "go the extra mile." But in a statement, NTEU President Colleen Kelley said she did not object to the review, noting the rewards program was not part of a negotiated contract.

"Part of that review should include investigation into why the agency felt the need to contract out the straightforward purchase of gift cards rather than direct all the available money into the incentive program," Kelley said.

Carol Bonosaro, president of the Senior Executives Association, defended the idea of small incentives to encourage good work, and said if policymakers want to review the practice, they should not limit the probe to FDA.

"It is a governmentwide policy, and it is a good one," Bonosaro said. "It's understandable that the new team wants to be comfortable with it. If that's the case, I think the comfort-level question needs to be addressed at a governmentwide level, rather than an individual agency level."

Bonosaro said informal incentive programs became popular during the Clinton administration.

"One of the ideas was to really take responsibility for making positive changes and improving the way that the government does business," she said. "It's a small amount, but what we know for certain is that recognition is important. The fact that a manager can say, 'I see that you're doing a good job, we want to reward it and encourage more of it.' "

Agencies can hand out gift certificates and vouchers as long as they are not easy to convert into cash, according to the Office of Personnel Management's Web site. To qualify as an informal recognition award -- as opposed to an honorary award or a cash bonus -- the item must be of nominal value.

"No exact dollar is set as nominal," OPM stated. "Nevertheless, agencies are expected to use good judgment and remember that nominal generally refers to a low monetary value."

Leon said gift cards are used in addition to formal performance-related bonuses. "We know in this case that the contract was done appropriately, and we know that it is a well-established and appropriate program supported by OPM. There's no doubt of that," Leon said. FDA's compensation programs have come under fire on Capitol Hill. Last year lawmakers criticized the agency for giving senior executives hefty bonuses at a time when it faced a budget crunch. The House Energy and Commerce Committee said FDA gave $35 million in bonuses in excess of $4,000 in 2007, an $8 million increase from 2006.