Prioritizing Warfighters in Defense Contracting Act
Sponsored By: Representative Burchett, Tim [R-TN-2]
Introduced
Summary
Limits buybacks, dividends, and executive pay tied to performance on big defense contracts. This bill would let the Secretary of Defense require new defense contracts worth at least $100 million to ban stock buybacks and dividends and cap annual executive pay at $5 million when contractors miss deadlines, go over budget, or fail to meet required production speed or capacity.
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- Defense contractors: Would face contract terms that push them to invest in production methods and maintain equipment to meet delivery and capacity targets.
- Executives: CEOs and other top officers could see their total annual pay limited under specific contracts when their firm underperforms.
- Department of Defense and warfighters: Gives the Department a direct contractual tool to pressure suppliers to deliver on time and at required capacity.
- Shareholders: Could experience halted dividends and blocked stock buybacks while a contract is subject to these performance-based restrictions.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 0 benefits, 1 costs, 0 mixed.
Limits pay and buybacks for defense contractors
If enacted, the bill would let the Secretary of Defense add terms to defense contracts worth $100,000,000 or more. Those contract terms would bar stock buybacks and shareholder dividends and cap any executive's annual pay at $5,000,000 if a contractor underperforms. Underperformance would mean being late or over budget, including from failing to invest in new or modernized production methods. It would also mean producing too slowly or at too low a capacity, including from not maintaining required equipment. The rule would apply to contracts entered into on or after the date of enactment.
Sponsors & CoSponsors
Sponsor
Burchett, Tim [R-TN-2]
TN • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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