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New Bill to Change Contractor Executive Pay

Changes are expected to contractor compensation due to a new bill that would lower the cap for reimbursements for all federal cost plus contracts.

The current level would be reduced from the current rate of $700,000 to $200,000, and would continue to apply to the top five contractor executives.

The Senate is expected to vote on the bill in Oct. as part of the fiscal 2012 defense authorization bill.

In a recent report, the Senate Armed Services Committee said “the expansion is justified to ensure that the department is not required to reimburse defense contractors for unreasonable or excessive compensation paid to company executives.”

OMB Spokeswoman Moira Mack commented on the issue, saying “President Obama believes its time to end excessive reimbursements to federal contractors for executive pay and instead bring down the cap to the salary of a Cabinet official, bringing greater parity between what the government pays for contractors’ executive compensation and what it pays its own executives.”

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