The Obama administration is reportedly drafting a proposal to give contracting preferences to companies that pay their workers more wages and benefits than required by law.

Lawmakers and contractor associations are pressing the administration for more details of the proposal. In a Feb. 1 letter to Office of Management and Budget Director Peter Orszag, five moderate Republican senators sought more information and said such a plan could drive up contracting costs.

"The factor [of contractor employee pay] could unduly distort the best value proposition and undermine the government's responsibility to act as a good steward of Americans' tax dollars," wrote Sens. Robert Bennett, Utah; Susan Collins, Maine; Tom Coburn, Okla.; Lindsey Graham, S.C.; and Olympia Snowe, Maine.

"Furthermore, increased costs associated with procurements could hinder the government's ability to procure the goods and services necessary to complete its mission, particularly during this time of increased budget pressures," they wrote.

OMB may formally issue the contracting policy by the end of the month, said Larry Allen, president of the Coalition for Government Procurement.

No one knows yet how officials will favor contractors who pay more. Allen said it could be through a points system or it could be similar to preferences granted to woman- or veteran-owned businesses.

Allen said he sees the proposal as a reward to unions that supported President Obama's candidacy and administration. Unions' contract wages are often higher than nonunion wages, he said.

"It gives them an edge over the competition that is just following the law. It penalizes others for following the law while companies going over get an advantage," he said.