Skip to navigation.

In a blog post earlier this week, I discussed Obama’s proposal to lower the cap on the amount of executive compensation for which contractors can see reimbursement under their cost contracts.  Obama’s proposal is to lower the cap to $200,000, down from the current cap of about $700,000.  The cap, however, only applies to a contractor’s five most highly compensated employees.  Now Congress has proposed to extend the cap to additional contractor employees.  Specifically, the Senate Armed Services Committee’s version of the 2012 Defense authorization bill proposes to expand the cap to all management employees and senior executives.  Of course, if passed, the “extended cap” would only apply to reimbursement under defense contracts.  Industry groups object to both Obama’s and Congress’ proposal to lower and/or extend the cap, repeating that seeking parity between government and private sector salaries is not appropriate.  Industry also correctly points out that OMB has yet to “score” these proposals; that is, OMB has yet to identify the supposed cost savings to the Government of these proposals. I’ll keep you posted.