DoD Authorization Bill Caps Contractor Salaries

December 2, 2011

All contractors' salaries would be capped at $400,000, the president's salary, under an amendment tacked on to the Senate's version of the Defense authorization bill approved Thursday.

Currently, a contractor can charge the government up to $693,951 for the salaries of its top five executives, based on an executive compensation formula. That cap does not apply to other contract employees, who can earn more.

The amendment was sponsored by Sens. Barbara Boxer, D-Calif.; Chuck Grassley, R-Iowa; and Jay Rockefeller, D-W.Va.

The Acquisition Reform Working Group, which represents nine trade and defense industry associations, said capping contractor salaries "will make the defense sector less attractive to top talent, which could then negatively impact [Defense Department] missions." 

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