Currently, under part of the fiscal 1998 national defense authorization act codified as 41 USC §1127, companies with cost reimbursment contracts can claim as part of their overhead relevant portions of executive compensation capped at $763,000 annually. If Congress doesn't pass legislation that lowers the cap, it will go up to more than $950,000 in the coming weeks, Jordan said.

 

Obama is proposing to abolish the current formula for the cap and tie the reimbursement cap to the president's $400,000 a year salary and apply it across-the-board to all defense and civilian cost-reimbursement contracts, Jordan said. Read full article.