The Senate version of the 2013 defense authorization bill does not include the small business contracting changes adopted by the House. But the bill recommended by the Senate Armed Services Committee would drastically reduce the allowable compensation for contractor executives.

The bill would cap maximum defense contractor compensation at $230,700, equal to the vice president’s salary. The current maximum is $763,029. That figure, which is set according to a formula comparing top pay in private industry, has increased by 75% in eight years. The committee report said “increases of this magnitude are unsupportable.”

Industry groups have said they need to offer higher pay to attract top-level talent. The bill provides for “narrowly targeted exceptions” from the cap for scientists, engineers and others with special skills or education.

The House-passed authorization bill would increase the governmentwide small business contracting goal to 25%, from the present 23%; create a new set-aside program for defense contractors that have outgrown small business size standards; and place additional restrictions on bundling.

After the full Senate acts on its version, the final bill will be crafted in a conference committee of the two houses.

The Senate committee’s bill would also require automatic referral for consideration of suspension or debarment of anyone who has been charged with a federal criminal offense in connection with a DOD contract; been alleged in a federal criminal or civil proceeding to have committed fraud in connection with a DOD contract; or is the subject of a final determination that the person has failed to pay or refund money due or owed to the federal government in connection with a DOD contract. The bill stops short of requiring suspension or debarment.

The bill also encourages the military services to use reverse auctions for commodities and simple services. The committee said reverse auctions are proven money-savers.