Sponsors (2)
The bill increases transparency and curbs excessive contractor executive pay through clearer definitions, caps, and enforcement tools to improve procurement outcomes, but it also raises compliance and administrative costs, risks slowing awards and deliveries, and may hinder contractor flexibility and talent recruitment—potentially raising costs and complexity for taxpayers.
Government contractors, markets, and the public: the bill adopts established SEC/Securities Exchange Act definitions and adds mandatory certifications, audits, and reporting, creating clearer, more consistent rules about what counts as 'covered compensation' and improving transparency for oversight.
Defense contractors and taxpayers: the bill caps covered employee compensation at $5,000,000 per year and bans short-term-metric pay structures to discourage excessive risk-taking and better align executive pay with long-term performance.
Military procurement and program outcomes: conditioning waivers on objective contractor-performance metrics (e.g., 80% thresholds) and giving DoD review/renegotiation authority creates stronger incentives for timely, technically sound delivery and faster remediation of pay-related violations.
Government contractors and taxpayers: the broad enumerations of 'covered compensation' plus added reporting and certification requirements expand compliance costs for contractors and are likely to be passed through in higher contract prices.
Program managers, contractors, and taxpayers: the extensive certification, remediation, waiver, review, and reporting processes risk slowing procurement awards and deliveries, increasing program costs and creating supply/delivery risks.
Defense contractors and federal programs: the $5 million cap and prohibitions on certain pay structures may make it harder to recruit and retain senior technical talent competing with the private sector, risking program performance and continuity.
Based on analysis of 3 sections of legislative text.
Conditions DoD procurement awards on large contractors banning buybacks/dividends and limiting certain short-term-linked or high executive pay, with compliance, review, and waiver rules.
Introduced March 25, 2026 by Elizabeth Warren · Last progress March 25, 2026
Prohibits the Secretary of Defense from awarding new procurement contracts to very large Department of Defense contractors unless those firms sign written agreements banning stock buybacks and dividend/capital distributions and limiting certain executive pay tied to short-term financial metrics or above $5,000,000 per year. Requires contractors to adopt compliance plans, certify compliance before award and annually, and meet specified delivery and performance metrics to remain eligible; allows the Secretary to grant case-by-case waivers with congressional notification and to review and renegotiate existing contracts.