More than $300 million in bonuses for a single contractor are to expire, and the Pentagon says that a separate incentive program for its defense contractors is going to be frozen.
Defense contractors will have to pay for all of their compensation through a special government fund.
That program is called the “defense-related cost recovery” program, or DRG.
The fund is supposed to be set aside for defense companies that are in trouble, but critics say it has been abused in the past.
The DRG fund was set up to reward companies for cutting costs by making it harder for the government to recover them.
The Pentagon announced in July that it was ending the DRG program.
The program will remain in place until it can find another program that will do it for them.
Critics say the program has been a massive waste of money and the incentives have been poorly designed.
Defense contractor companies in trouble can get some of the money back by finding a new, cheaper program to help pay for their defense.