FDA Suspends Gift Cards

It seems the new leaders of the Food and Drug Administration were just as curious about "employee incentive gift cards" as we were.

Yesterday, the acting commissioner suspended the program after reading here about one division's deal to buy a bunch of the cards, at $250 each, to reward employees.

Here's a story today in the Post:

"The head of the U.S. Food and Drug Administration suspended the agency's use of gift cards and other informal bonuses to employees yesterday, after a report that the FDA had awarded a $41,030 contract last month to a company to supply the cards.

"Agencies across the government issue the cards and other kinds of informal bonuses. The FDA's Center for Devices and Radiological Health arranged to buy 160 of the cards at $250 apiece to reward employees for their hard work, an agency spokeswoman said.

"Acting FDA Commissioner Joshua Sharfstein announced the suspension after The Washington Post's Government Inc. blog published details of the April contract.

"FDA officials said the contract was properly awarded. But Sharfstein said in an interview yesterday that he wanted to learn more about the criteria for such an award, how the cards were acquired and the precautions taken by agency officials to ensure the cards are properly awarded. He said that about 15 percent of FDA's employees -- as many as 1,500 in all -- received gift cards last year.

"'My perspective is, we're the new team coming in. We are responsible for how the agency money is being spent,' Sharfstein said. 'It's really important that we're comfortable' with such incentives."

So, that's some swift reaction. And yet. We're more curious than ever.

The potential for rewarding hard-working federal employees seems clear. There's no doubt that many people work more than they get paid for.

And yet. The potential for abuse seems obvious. Apparently there is little oversight of who gets these informal bonuses? Are there guidelines for how they're handed out? $250 may not seem like much but we imagine it can add up.

Government Inc. is going to try and learn more. Please share any thoughts regarding the good, the bad and the ugly of informal bonuses.

By Robert O'Harrow |  May 21, 2009; 9:21 AM ET
Previous: FDA Incentives | Next: Open Government


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This seems like a gross over-reaction to a very typical and normal government incentive for good work. The process was followed "by the book" and adhered to OPM and acquisition guidelines. Why pick this apart now? OPM has been encouraging this type of reward for awhile now as an alternative to bonuses. How is this different than the managing and awarding of employee bonuses, except for the fact that bonuses aren't posted on public websites? Maybe we should instead focus on the other extraneous funds being used for more frivolous things, such as the millions being farmed out by Congressmen.

Posted by: coastalisis | May 21, 2009 9:54 AM

I don't think the issue is the money. It's the lack of accountability on how these things are being passed out.

Posted by: spidey103 | May 21, 2009 10:21 AM

"hard-working federal employees"

What a conflict in terms.

Posted by: MRGB | May 21, 2009 10:41 AM

I don't see the difference between a bonus and a gift card...they are both awarded to workers who deserve it! I've worked in Civil Service sector and private sector, and there are hard-working folks in both sectors, as there are goof-offs in both sectors.

Posted by: w4vr | May 21, 2009 11:57 AM

The disadvantage of working for the Federal Government is demonstrated by the last remark. In my 41 years with the government, the person who was not hard working was an exception. Current thought on rewarding employees emphasizes an immediate reward of small size. This reinforces the employees extra effort. This is possible even in large organizations. 15% does not seem like everybody is being handed a gift card. Of course it is easy for a newspaper to do this kind of reporting rather than extensive meaningful investigative reporting.

Posted by: opchuck | May 21, 2009 12:02 PM

It's another way around the rules of compensation, just like the Bushies worked their way around so many things. If a worker is doing a good job, they should get a reward, but not one that is informal and unregulated. Get over it. Stop it.

Posted by: tojo45 | May 21, 2009 1:18 PM

This certainly was not an overreaction. Companies in the private sector are required to be able to account for spending and taxation on such gifts appropriately. Regardless of these governance requirements, our clients WANT auditable insight into their spend on recognition to eliminate possible opportunities for misuse. Gift cards are a terrific rewards option -- especially if you allow recipients to choose from thousands of options -- but only if those cards are available through a highly governable, auditable, measurable and reportable program.

Posted by: DerekIrvineGloboforce | May 21, 2009 3:30 PM

MRGB: Yes, there are a lot of very hard-working Federal Employees. But as in any company, there are some people who do nothing. The majority do a good job and work hard everyday, some work in agencies protecting our very lives and freedoms.

DerekIrvineGloboforce: Unless you work in the FDA governing these awards, how do you know that these are not audited, tracked, and measured? When these contracts go out, they have to follow very strict rules and regulations. They are monitored by executives, Congressional staffs, and other governing agencies. They are not created by anyone who wants to just buy themselves and their friends a couple gift cards. Everything gets checked and everything gets monitored. Funding for agencies are constantly under Congressional and other agency scrutiny.

Posted by: coastalisis | May 22, 2009 10:39 AM

Gift cards are a fraud anyway. Typically, you wind up not being able to use the last few bucks, so you don't really get the full $250 (as you would with a check). And the provider gets to track your purchases, so you can be bombarded with ads in your email, telephone solicitation (Oh, you didn't sign on for this? Did you read the fine print?), etc.

Posted by: skoper1 | May 22, 2009 3:59 PM

Why are government employees entitled to bonuses? As a non-profit entity (as is my employer) I don't believe bonuses are allowed. I know we don't get them. The very definition of non-profit is just that. Like the corporations who not only use bonuses to compensate the already over-compensated executives it also lowers their bottom line and tax liabilty. I have not seen many government employess at the local, state or federal level who would even qualify for a bonus if it were performance-based. All I see are extended coffee breaks, passing the buck and doing as little as possible while being overpaid with our tax dollars. In this economy no government employee should receive any kind of bonus even if it is allowed.

Posted by: dstentzel | May 26, 2009 9:56 AM

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