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DoD authorization bill caps contractor salaries

Dec. 2, 2011 - 03:08PM   |  
By SARAH CHACKO   |   Comments
Contractors' salaries would be capped at $400,000 under an amendment in the Senate's defense authorization bill approved Dec. 1.
Contractors' salaries would be capped at $400,000 under an amendment in the Senate's defense authorization bill approved Dec. 1. (Navy)

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."

The group recommends that the Office of Federal Procurement Policy review the current formula and recommend changes.

The bill now moves to conference committee with the House, where various disagreements will have to be resolved before a final version can go to the president for his signature.

Other provisions approved by the Senate include:

Require the Defense Department to conduct a full-scale audit of its finances by Sept. 30, 2014, three years earlier than the current deadline.

Expedite hiring for the department's information technology and cybersecurity workforce.

Limit use of cost-type contracts for major defense acquisitions.

Require the comptroller general to report on DoD's implementation of justification and approval requirements for certain sole-source contracts.

Limit exemptions on disclosure of certain sensitive national security information under the Freedom of Information Act. The provision adds a public interest balancing test requiring the secretary of Defense to consider whether the disclosure of critical infrastructure information would reveal vulnerabilities that would result in harm to government property or facilities, or whether public interest in the disclosure outweighs the government's need to withhold the information.

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