NDAA to extend contractor comp caps at current level


A cap on how much contractors can charge the government for their top execs would be extended to all defense contract employees as part of the agreement reached by House and Senate leaders for the 2012 National Defense Authorization Act.

Currently, contractors can seek reimbursement for the compensation — wages, salary, bonuses and deferred compensation — of each of the company’s top five executives. Legislation now proposed for the 2012 NDAA would extend that cap, which is now at $693,951, to all employees that work on a contract or are included in the overhead costs of a contract.

The Defense Department could also create an exemption for scientists and engineers if it determines that an exemption is necessary to attract skilled workers in those areas.

The Senate tried to lower the limit of the cap by tying it to the President’s salary, which is now $400,000. Sen. Barbara Boxer, who co-sponsored that language in the Senate bill, was disappointed by the change in the final version and said she will continue working on ways to “rein in exorbitant taxpayer-funded salaries for contractors.”

“It is outrageous that under this bill, defense contractors can continue to charge taxpayers $700,000 a year for their salaries,” she said in a statement.

Both the House and Senate now have to approve the agreements reached by the conference committee.

The proposed NDAA would also preempt any mandate by the President that would require contractors to disclose their political contributions before being awarded a federal contract. Both the House and Senate versions included identical language to prohibit agencies from requiring contractors to submit information about their political contributions at any time during the contract process.

A draft executive order that would have required  was leaked in April but the White House has not said anything more than it was under consideration.


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