New Rule Would Limit Contractor Reimbursements

President Obama is calling for a new rule that will further limit the amount the government will reimburse executives of government contractors.

As the rule stands now, the government reimburses contractors for costs, such as employee pay. The amount the government will reimburse executives at government contractors is inline with executives at publicly traded companies in other sectors, nearly $694,000.

Under Obama’s proposed change, the government would only reimburse contractors up to $200,000 for executives.

“Just as the Government must be prudent in paying its employees, it must also not overpay contractors,” said Office of Management and Budget Office of Federal Procurement Policy Acting Administrator Lesley Field. “To be clear, the proposal does not limit how much contractors may pay their ex­ecutives – only how much the Government will reimburse them.”

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