Sponsors (3)
The bill seeks to rein in excessive pay on large DoD contracts and strengthen oversight and enforcement—protecting taxpayers and improving transparency—while imposing new compliance burdens, potential delays, and legal complexity that could raise costs and deter some contractors.
Taxpayers and government buyers: Large DoD contractors will be limited to $5,000,000 in covered pay for certain employees, reducing excessive compensation charged to federal contracts.
Government procurement officials and taxpayers: The bill authorizes suspension of payments, contract termination, and referrals for debarment for violations, strengthening enforcement against noncompliant contractors.
Federal acquisition officials and contractors: Requires contractor certifications, compliance plans, and performance reviews, improving oversight and accountability of defense procurements.
Government contractors and taxpayers: New and frequent certification, review, and reporting requirements will raise contractors' compliance costs, which are likely to be passed through to the government in higher contract prices.
Potential bidders and DoD procurement competition: Constraints on dividends, stock purchases, and pay structures may deter some firms from bidding or accepting contracts, reducing competition for defense contracts.
Program managers and taxpayers: Renegotiation and review of existing contracts could delay deliveries and increase administrative burdens, risking schedule slips or higher program costs.
Based on analysis of 3 sections of legislative text.
Bars DoD from contracting with very large contractors unless they limit buybacks/dividends, cap covered pay at $5M, avoid short-term stock-linked pay, and certify compliance with reviews and waivers.
Introduced March 25, 2026 by Elizabeth Warren · Last progress March 25, 2026
Restricts the Department of Defense from signing new contracts with very large defense contractors unless those firms agree to limits on stock buybacks, dividends, and equity purchases by the company or its parent, and cap covered employee compensation at $5,000,000 per year tied to existing statutory pay rules rather than short-term stock-driven metrics. Requires contractors to adopt compliance plans, certify adherence before award and annually, and subjects waivers and ongoing eligibility to a formal DoD review process with congressional notification.