The House on Thursday approved the conference report on the fiscal 2013 Defense authorization bill, which includes a pay raise for service members and a provision directing the Pentagon to reduce its civilian and contractor workforces.

The massive $633.3 billion bill contains several provisions related to military pay and benefits. It authorizes a 1.7 percent pay raise for service members in 2013, and rejects an Obama administration proposal calling for higher fees on pharmacy drug co-payments under TRICARE. Specifically, the bill caps pharmacy co-pays beginning in 2014 so that such fees are in line with the annual retiree cost-of-living adjustment. The costs associated with the fee increases would be offset by a five-year pilot program requiring TRICARE for Life recipients to obtain maintenance drug refills through the mail, which is cheaper than obtaining them through retail pharmacies.

A provision that directs the Pentagon to shed thousands of civilian and contractor jobs through fiscal 2017 also survived House-Senate conference negotiations over the bill. It directs the Defense secretary to rebalance and reduce the civilian and contractor workforces from fiscal 2012 through fiscal 2017 by a rate that is at least equal to the percentage of funding saved from planned troop reductions, or 5 percent. The bill also gives the Defense Department discretion over whether to exempt certain mission-critical jobs, including medical services and maintenance of military equipment, from the cuts. The provision means the department could eliminate up to 36,000 jobs during the next few years.

The language in the conference report gives the Pentagon more flexibility than the original provision in the Senate version of the Defense authorization bill. It directs the Defense Department to ensure that the civilian and contractors workforces are “appropriately sized” with the military force to carry out its mission and to find “the most appropriate and cost-efficient mix of military, civilian, and service contractor personnel.” The Senate provision, inserted by Sen. John McCain, R-Ariz., was criticized by the American Federation of Government Employees and the Pentagon for directing arbitrary, across-the-board personnel cuts that didn’t take into account the department’s workforce needs. The original House version of the bill did not contain language to reduce civilian and contractor personnel.

The Defense authorization bill that conferees crafted also establishes a commission to review military compensation and retirement benefits, enhances suicide prevention and sexual assault prevention programs in the military, and authorizes the department to pay for abortions in cases of rape and incest.

“I am heartened that even during this time of partisan division and intransigence Members were able to come together in a bipartisan, bicameral manner to support our brave men and women in uniform,” said House Armed Services Committee Chairman Buck McKeon, R-Calif.

It was unclear when the Senate would vote on the conference report; it could be Friday or later.