81 FR 67778 - Federal Acquisition Regulation: Limitation on Allowable Government Contractor Employee Compensation Costs
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION Federal Register Volume 81, Issue 190 (September 30, 2016)
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
Federal Register Volume 81, Issue 190 (September 30, 2016)
| Page Range | 67778-67780 | |
| FR Document | 2016-23204 |
[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)] [Rules and Regulations] [Pages 67778-67780] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-23204] ----------------------------------------------------------------------- DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Part 31 [FAC 2005-91; FAR Case 2014-012; Item X; Docket No. 2014-0012; Sequence No. 1] RIN 9000-AM75 Federal Acquisition Regulation: Limitation on Allowable Government Contractor Employee Compensation Costs AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: DoD, GSA and NASA are adopting as final, with changes, an interim rule amending the Federal Acquisition Regulation (FAR) to implement a section of the Bipartisan Budget Act of 2013. The final rule revises the allowable cost limit relative to the compensation of contractor and subcontractor employees. Also, this final rule implements the narrowly targeted exception to this allowable cost limit for scientists, engineers, or other specialists upon an agency determination that such exceptions are needed to ensure that the executive agency has continued access to needed skills and capabilities. DATES: Effective: September 30, 2016. FOR FURTHER INFORMATION CONTACT: Ms. Kathlyn J. Hopkins, Procurement Analyst, at 202-969-7226, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-91, FAR Case 2014-012. SUPPLEMENTARY INFORMATION: I. Background DoD, GSA, and NASA published an interim rule in the Federal Register at 79 FR 35865 on June 24, 2014, to implement section 702 of The Bipartisan Budget Act of 2013 (Pub. L. 113-67), which amended the allowable cost limits of contractor and subcontractor employee compensation. Specifically, section 702 revised the application of the compensation cap, the amount of the cap, and the associated formula for annually adjusting it. The existing formula for determining the limit on the allowability of contractor and subcontractor employee compensation costs under 41 U.S.C. 1127 was repealed for contracts awarded on or after June 24, 2014. Section 702 of the law set the initial limitation on allowable contractor and subcontractor employee compensation costs at $487,000 per year, which will be adjusted annually to reflect the change in the Employment Cost Index for all workers as calculated by the Bureau of Labor Statistics. This final rule also implements the authority provided by 10 U.S.C. 2324(e)(1)(P) and 41 U.S.C. 4304(a)(16), as amended by section 702(a), in which Congress has authorized the heads of Executive agencies to establish ``one or more narrowly targeted exceptions for scientists, engineers, or other specialists upon a determination that such exceptions are needed to ensure that the executive agency has continued access to needed skills and capabilities.'' II. Discussion and Analysis The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comments in the development of the final rule. A discussion of the comments is provided as follows: A. Summary of Significant Changes This final rule adopts the interim rule with four changes for clarification.The first clarification entails the addition of a table to FAR 31.205-6(p) that summarizes the applicability dates contained in this FAR section. The second clarification concerns the reorganization of the FAR text. Existing FAR paragraph 31.205-6(p)(4) has become new paragraph (p)(1), with existing paragraph (p)(1) becoming new paragraph (p)(2). Existing FAR paragraphs 31.205-6(p)(2) and (p)(3) have become new paragraphs (p)(3) and (p)(4), respectively. The third clarification entails the removal of the following redundant FAR 31.205-6 text: [cir] Paragraph (p)(2)(ii) text ``Costs incurred after January 1, 1998.'' [cir] Paragraph (p)(3)(ii) text ``Costs incurred after January 1, 2012.'' [cir] Paragraph (p)(4)(ii) text ``Costs incurred on or after June 24, 2014.'' The fourth clarification entails reference links in paragraphs (p)(2) and (p)(3) (see https://www.whitehouse.gov/omb/procurement_index_exec_comp/) [[Page 67779]] and another reference link in paragraph (p)(4) (see http://www.whitehouse.gov/omb/procurement/cecp). Additionally, some statutory references and explanatory text were added in FAR paragraphs 31.205- 6(p)(3) and (p)(4). B. Analysis of Public Comments The Regulatory Secretariat Division received responses from three respondents to the interim rule, which are discussed below: 1. Support for the Rule Comment: One respondent strongly supported the interim rule and applauded the FAR issuing agencies for meeting the statutory deadline for issuance of this rule. Response: The Government notes the public support for this rule. 2. Application of Rule to Nonprofit Organizations Comment: One respondent stated that the rule only referenced FAR 31.205-6. Respondent questioned whether this means that the new compensation cap will only apply to contractors or subcontractors that follow this FAR section; would a nonprofit organization that complies with FAR subpart 31.7 be exempt from the compensation cap; or will FAR subpart 31.7 be amended as well. Response: A nonprofit organization that complies with FAR subpart 31.7 is not exempt from the compensation cap in this rule. Previously, FAR 31.702 referenced the Office of Management and Budget (OMB) Circular Number A-122, Cost Principles for Non-Profit Organizations. The recent FAR case 2014-023 updated the reference from OMB Circular A- 122 to the revised OMB Uniform Guidance at 2 CFR 200, subpart E, and applicable appendices, as in effect on the date of the contract, which references the statutory compensation ceilings. These cost principles reference the compensation cap contained in this FAR rule. 3. Retroactive Application of Rule Not Appropriate Comment: The interim rule stated that the revised compensation cap ``will apply to the costs of compensation for all contractor and subcontractor employees for contracts awarded, and cost incurred, on or after June 24, 2014.'' One respondent stated that reading this sentence literally, the interim rule provides that all executive compensation costs are subject to the revised cap no matter when the contracts to which such costs are allocated were awarded which makes application of the rule retroactive which is inappropriate. Response: The rule applies to costs incurred on contracts awarded on or after June 24, 2014, and does not apply retroactively to contracts awarded before June 24, 2014. For further clarification, Table 31.1 has been added as a summary of the applicability of the three compensation caps. 4. Application of Rule to Fixed-Price Contracts Comment: One respondent requested that specific preamble language be included in the final rule that reinforces the existing FAR part 31 language which specifies the application of the cost principles to fixed-price contracts whenever cost analysis is performed. Respondent also stated that by allowing fixed-price contracts that are subject to cost analysis to evade this compensation cap defeats Congressional intent and costs taxpayers significantly. Response: The reinforcement of this existing FAR part 31 language is unnecessary. This FAR rule revises FAR 31.205-6 specifically regarding the allowability of executive compensation. Other FAR cost principle sections such as 31.102 remain unchanged in their application and use, including when the cost principles are applicable to fixed- price contracts. III. Executive Orders 12866 and 13563 Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. IV. Regulatory Flexibility Act DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows: DoD, GSA, and NASA do not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. because, an analysis of data in the Federal Procurement Data System (FPDS) revealed that most contracts awarded to small entities are awarded on a fixed-price basis, and do not require application of the cost principle contained in this rule. The rule imposes no reporting, recordkeeping, or other information collection requirements. The rule does not duplicate, overlap, or conflict with any other Federal rules, and there are no known significant alternatives to the rule. Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration. V. Paperwork Reduction Act The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Act (44 U.S.C. chapter 35). List of Subject in 48 CFR Part 31 Government procurement. Dated: September 19, 2016. William F. Clark, Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy. Interim Rule Adopted As Final With Changes 0 Accordingly, the interim rule amending 48 CFR part 31 which was published in the Federal Register at 79 FR 35865 on June 24, 2014, is adopted as a final rule with the following changes: PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES 0 1. The authority citation for 48 CFR part 31 continues to read as follows: Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113. 0 2. Amend section 31.205-6 by revising paragraph (p) to read as follows: 31.205-6 Compensation for personal services. * * * * * (p) Limitation on allowability of compensation. [[Page 67780]] Table 31-1--Employee Compensation Limits ---------------------------------------------------------------------------------------------------------------- Contract award date Applicable agencies Covered employees 31.205-6 ---------------------------------------------------------------------------------------------------------------- Before June 24, 2014................ Executive Agencies Other Senior Executive...... (p)(2). than DoD, NASA and Coast Guard. Before December 31, 2011............ DoD, NASA and Coast Guard... Senior Executive...... (p)(2). On/after December 31, 2011, and DoD, NASA, and Coast Guard.. All Employees......... (p)(3). before June 24, 2014. On/after June 24, 2014.............. All Executive Agencies...... All Employees......... (p)(4). ---------------------------------------------------------------------------------------------------------------- (1) Definitions. As used in this paragraph (p)-- (i) Compensation means the total amount of wages, salary, bonuses, deferred compensation (see paragraph (k) of this subsection), and employer contributions to defined contribution pension plans (see paragraphs (j)(4) and (q) of this subsection), for the fiscal year, whether paid, earned, or otherwise accruing, as recorded in the contractor's cost accounting records for the fiscal year. (ii) Senior executive means-- (A) Prior to January 2, 1999-- (1) The Chief Executive Officer (CEO) or any individual acting in a similar capacity at the contractor's headquarters; (2) The four most highly compensated employees in management positions at the contractor's headquarters, other than the CEO; and (3) If the contractor has intermediate home offices or segments that report directly to the contractor's headquarters, the five most highly compensated employees in management positions at each such intermediate home office or segment. (B) Effective January 2, 1999, the five most highly compensated employees in management positions at each home office and each segment of the contractor, whether or not the home office or segment reports directly to the contractor's headquarters. (iii) Fiscal year means the fiscal year established by the contractor for accounting purposes. (iv) Contractor's headquarters means the highest organizational level from which executive compensation costs are allocated to Government contracts. (2) Senior executive compensation limit for contracts awarded before June 24, 2014--(i) Applicability. This paragraph (p)(2) applies to the following: (A) To all executive agencies, other than DoD, NASA and the Coast Guard, for contracts awarded before June 24, 2014; (B) To DoD, NASA, and the Coast Guard for contracts awarded before December 31, 2011; (ii) Costs incurred after January 1, 1998, for the compensation of a senior executive in excess of the benchmark compensation amount determined applicable for the contractor fiscal year by the Administrator, Office of Federal Procurement Policy (OFPP), under 41 U.S.C. 1127 as in effect prior to June 24, 2014, are unallowable (10 U.S.C. 2324(e)(1)(P) and 41 U.S.C. 4304(a)(16), as in effect prior to June 24, 2014). This limitation is the sole statutory limitation on allowable senior executive compensation costs incurred after January 1, 1998, under contracts awarded before June 24, 2014, and applies whether or not the affected contracts were previously subject to a statutory limitation on such costs. (Note that pursuant to section 804 of Pub. L. 105-261, the definition of ``senior executive'' in paragraph (p)(1) of this section has been changed for compensation costs incurred after January 1, 1999.) See https://www.whitehouse.gov/omb/procurement_index_exec_comp/. (3) All employee compensation limit for contracts awarded before June 24, 2014. (i) Applicability. This paragraph (p)(3) applies to DOD, NASA, and the Coast Guard for contracts awarded on or after December 31, 2011, and before June 24, 2014. (ii) Costs incurred after January 1, 2012, for the compensation of any contractor employee in excess of the benchmark compensation amount, determined applicable for the contractor fiscal year by the Administrator, Office of Federal Procurement Policy (OFPP) under 41 U.S.C. 1127 as in effect prior to June 24, 2014 are unallowable (10 U.S.C. 2324(e)(1)(P) as in effect prior to June 24, 2014.) This limitation is the sole statutory limitation on allowable employee compensation costs incurred after January 1, 2012, under contracts awarded on or after December 31, 2011 and before June 24, 2014. (Note that pursuant to section 803 of Pub. L. 112-81, 10 U.S.C. 2324, Allowable costs under defense contracts, was amended by striking ``senior executives'' and inserting ``any contractor employee'', making unallowable the excess compensation costs incurred after January 1, 2012, under affected contracts.) See https://www.whitehouse.gov/omb/procurement_index_exec_comp/. (4) All employee compensation limit for contracts awarded on or after June 24, 2014. (i) Applicability. This paragraph (p)(4) applies to all executive agency contracts awarded on or after June 24, 2014, and any subcontracts thereunder. (ii) Costs incurred on or after June 24, 2014, for the compensation of all employees in excess of the benchmark compensation amount determined applicable for the contractor fiscal year by the Administrator, Office of Federal Procurement Policy (OFPP) are unallowable under 10 U.S.C. 2324(e)(1)(P) and 41 U.S.C. 4304(a)(16), as in effect on or after June 24, 2014, pursuant to section 702 of Public Law 113-67. This limitation is the sole statutory limitation on allowable employee compensation costs incurred on or after June 24, 2014, under contracts awarded on or after June 24, 2014. See http://www.whitehouse.gov/omb/procurement/cecp. (iii) Exceptions. An agency head may establish one or more narrowly targeted exceptions for scientists, engineers, or other specialists upon a determination that such exceptions are needed to ensure that the executive agency has continued access to needed skills and capabilities. In making such a determination, the agency shall consider, at a minimum, for each contractor employee in a narrowly targeted excepted position-- (A) The amount of taxpayer funded compensation to be received by each employee; and (B) The duties and services performed by each employee. [FR Doc. 2016-23204 Filed 9-29-16; 8:45 am] BILLING CODE 6820-EP-P
![67778 Federal Register / Vol. 81, No. 190 / Friday, September 30, 2016 / Rules and Regulations
Full cooperation— Authorization Act for Fiscal Year 2008; 10 Specifically, section 702 revised the
(1) Means disclosure to the Government of U.S.C. 2302 Note). application of the compensation cap,
the information sufficient to identify the [FR Doc. 2016–23203 Filed 9–29–16; 8:45 am] the amount of the cap, and the
nature and extent of the incident and the associated formula for annually
BILLING CODE 6820–EP–P
individuals responsible for the conduct. It
adjusting it. The existing formula for
includes providing timely and complete
responses to Government auditors’ and
determining the limit on the
investigators’ requests for documents and
DEPARTMENT OF DEFENSE allowability of contractor and
access to employees with information; subcontractor employee compensation
GENERAL SERVICES costs under 41 U.S.C. 1127 was repealed
(2) Does not foreclose any Contractor rights
arising in law, the FAR, or the terms of the ADMINISTRATION for contracts awarded on or after June
contract. It does not require— 24, 2014. Section 702 of the law set the
(i) The Contractor to waive its attorney- NATIONAL AERONAUTICS AND initial limitation on allowable
client privilege or the protections afforded by SPACE ADMINISTRATION contractor and subcontractor employee
the attorney work product doctrine; or compensation costs at $487,000 per
(ii) Any officer, director, owner, or 48 CFR Part 31 year, which will be adjusted annually to
employee of the Contractor, including a sole
[FAC 2005–91; FAR Case 2014–012; Item reflect the change in the Employment
proprietor, to waive his or her attorney-client
privilege or Fifth Amendment rights; and X; Docket No. 2014–0012; Sequence No. 1] Cost Index for all workers as calculated
(3) Does not restrict the Contractor from— by the Bureau of Labor Statistics. This
RIN 9000–AM75
(i) Conducting an internal investigation; or final rule also implements the authority
(ii) Defending a proceeding or dispute Federal Acquisition Regulation: provided by 10 U.S.C. 2324(e)(1)(P) and
arising under the contract or related to a Limitation on Allowable Government 41 U.S.C. 4304(a)(16), as amended by
potential or disclosed violation. Contractor Employee Compensation section 702(a), in which Congress has
Other significant military operations means authorized the heads of Executive
Costs
activities, other than combat operations, as agencies to establish ‘‘one or more
part of a contingency operation outside the AGENCY: Department of Defense (DoD), narrowly targeted exceptions for
United States that is carried out by United General Services Administration (GSA), scientists, engineers, or other specialists
States Armed Forces in an uncontrolled or and National Aeronautics and Space
unpredictable high-threat environment where
upon a determination that such
personnel performing security functions may
Administration (NASA). exceptions are needed to ensure that the
be called upon to use deadly force. ACTION: Final rule. executive agency has continued access
to needed skills and capabilities.’’
* * * * * SUMMARY: DoD, GSA and NASA are
(b) Applicability. If this contract is II. Discussion and Analysis
adopting as final, with changes, an
performed both in a designated area and in
an area that is not designated, the clause only interim rule amending the Federal The Civilian Agency Acquisition
applies to performance in the following Acquisition Regulation (FAR) to Council and the Defense Acquisition
designated areas— implement a section of the Bipartisan Regulations Council (the Councils)
(1) Combat operations, as designated by the Budget Act of 2013. The final rule reviewed the public comments in the
Secretary of Defense; or revises the allowable cost limit relative development of the final rule. A
(2) Other significant military operations, as to the compensation of contractor and discussion of the comments is provided
designated by the Secretary of Defense, and subcontractor employees. Also, this as follows:
only upon agreement of the Secretary of final rule implements the narrowly
Defense and the Secretary of State. A. Summary of Significant Changes
targeted exception to this allowable cost
* * * * * limit for scientists, engineers, or other This final rule adopts the interim rule
(f) Subcontracts. The Contractor shall specialists upon an agency with four changes for clarification.
include the substance of this clause, determination that such exceptions are • The first clarification entails the
including this paragraph (f), in all needed to ensure that the executive addition of a table to FAR 31.205–6(p)
subcontracts that will be performed outside that summarizes the applicability dates
the United States in areas of—
agency has continued access to needed
skills and capabilities. contained in this FAR section.
(1) Combat operations, as designated by the • The second clarification concerns
Secretary of Defense; or DATES: Effective: September 30, 2016.
(2) Other significant military operations,
the reorganization of the FAR text.
FOR FURTHER INFORMATION CONTACT: Ms.
upon agreement of the Secretaries of Defense Existing FAR paragraph 31.205–6(p)(4)
Kathlyn J. Hopkins, Procurement has become new paragraph (p)(1), with
and State that the clause applies in that area. Analyst, at 202–969–7226, for existing paragraph (p)(1) becoming new
* * * * * clarification of content. For information paragraph (p)(2). Existing FAR
■ 9. Amend section 52.244–6 by pertaining to status or publication paragraphs 31.205–6(p)(2) and (p)(3)
revising the date of the clause and schedules, contact the Regulatory have become new paragraphs (p)(3) and
paragraph (c)(1)(xv) to read as follows: Secretariat Division at 202–501–4755. (p)(4), respectively.
Please cite FAC 2005–91, FAR Case • The third clarification entails the
52.244–6 Subcontracts for Commercial 2014–012. removal of the following redundant FAR
Items. SUPPLEMENTARY INFORMATION: 31.205–6 text:
* * * * * Æ Paragraph (p)(2)(ii) text ‘‘Costs
I. Background
Subcontracts for Commercial Items (Oct incurred after January 1, 1998.’’
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2016) DoD, GSA, and NASA published an Æ Paragraph (p)(3)(ii) text ‘‘Costs
interim rule in the Federal Register at incurred after January 1, 2012.’’
* * * * *
79 FR 35865 on June 24, 2014, to Æ Paragraph (p)(4)(ii) text ‘‘Costs
(c) * * *
(1) * * * implement section 702 of The incurred on or after June 24, 2014.’’
(xv) 52.225–26, Contractors Performing Bipartisan Budget Act of 2013 (Pub. L. • The fourth clarification entails
Private Security Functions Outside the 113–67), which amended the allowable reference links in paragraphs (p)(2) and
United States (Oct 2016) (Section 862, as cost limits of contractor and (p)(3) (see https://www.whitehouse.gov/
amended, of the National Defense subcontractor employee compensation. omb/procurement_index_exec_comp/)
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TABLE 31–1—EMPLOYEE COMPENSATION LIMITS
Contract award date Applicable agencies Covered employees 31.205–6
Before June 24, 2014 ............................................... Executive Agencies Other than DoD, NASA and Senior Executive ............ (p)(2).
Coast Guard.
Before December 31, 2011 ...................................... DoD, NASA and Coast Guard ............................... Senior Executive ............ (p)(2).
On/after December 31, 2011, and before June 24, DoD, NASA, and Coast Guard .............................. All Employees ................ (p)(3).
2014.
On/after June 24, 2014 ............................................ All Executive Agencies ........................................... All Employees ................ (p)(4).
(1) Definitions. As used in this (ii) Costs incurred after January 1, inserting ‘‘any contractor employee’’,
paragraph (p)— 1998, for the compensation of a senior making unallowable the excess
(i) Compensation means the total executive in excess of the benchmark compensation costs incurred after
amount of wages, salary, bonuses, compensation amount determined January 1, 2012, under affected
deferred compensation (see paragraph applicable for the contractor fiscal year contracts.) See https://
(k) of this subsection), and employer by the Administrator, Office of Federal www.whitehouse.gov/omb/
contributions to defined contribution Procurement Policy (OFPP), under 41 procurement_index_exec_comp/.
pension plans (see paragraphs (j)(4) and U.S.C. 1127 as in effect prior to June 24,
(q) of this subsection), for the fiscal year, 2014, are unallowable (10 U.S.C. (4) All employee compensation limit
whether paid, earned, or otherwise 2324(e)(1)(P) and 41 U.S.C. 4304(a)(16), for contracts awarded on or after June
accruing, as recorded in the contractor’s as in effect prior to June 24, 2014). This 24, 2014.
cost accounting records for the fiscal limitation is the sole statutory limitation (i) Applicability. This paragraph (p)(4)
year. on allowable senior executive applies to all executive agency contracts
(ii) Senior executive means— compensation costs incurred after awarded on or after June 24, 2014, and
(A) Prior to January 2, 1999— January 1, 1998, under contracts any subcontracts thereunder.
(1) The Chief Executive Officer (CEO) awarded before June 24, 2014, and
or any individual acting in a similar (ii) Costs incurred on or after June 24,
applies whether or not the affected
capacity at the contractor’s contracts were previously subject to a 2014, for the compensation of all
headquarters; statutory limitation on such costs. (Note employees in excess of the benchmark
(2) The four most highly compensated that pursuant to section 804 of Pub. L. compensation amount determined
employees in management positions at 105–261, the definition of ‘‘senior applicable for the contractor fiscal year
the contractor’s headquarters, other than executive’’ in paragraph (p)(1) of this by the Administrator, Office of Federal
the CEO; and section has been changed for Procurement Policy (OFPP) are
(3) If the contractor has intermediate compensation costs incurred after unallowable under 10 U.S.C.
home offices or segments that report January 1, 1999.) See https:// 2324(e)(1)(P) and 41 U.S.C. 4304(a)(16),
directly to the contractor’s headquarters, www.whitehouse.gov/omb/ as in effect on or after June 24, 2014,
the five most highly compensated procurement_index_exec_comp/. pursuant to section 702 of Public Law
employees in management positions at 113–67. This limitation is the sole
(3) All employee compensation limit
each such intermediate home office or statutory limitation on allowable
for contracts awarded before June 24,
segment. employee compensation costs incurred
2014.
(B) Effective January 2, 1999, the five
(i) Applicability. This paragraph (p)(3) on or after June 24, 2014, under
most highly compensated employees in
applies to DOD, NASA, and the Coast contracts awarded on or after June 24,
management positions at each home
Guard for contracts awarded on or after 2014. See http://www.whitehouse.gov/
office and each segment of the
contractor, whether or not the home December 31, 2011, and before June 24, omb/procurement/cecp.
office or segment reports directly to the 2014. (iii) Exceptions. An agency head may
contractor’s headquarters. (ii) Costs incurred after January 1, establish one or more narrowly targeted
(iii) Fiscal year means the fiscal year 2012, for the compensation of any exceptions for scientists, engineers, or
established by the contractor for contractor employee in excess of the other specialists upon a determination
accounting purposes. benchmark compensation amount, that such exceptions are needed to
(iv) Contractor’s headquarters means determined applicable for the contractor ensure that the executive agency has
the highest organizational level from fiscal year by the Administrator, Office continued access to needed skills and
which executive compensation costs are of Federal Procurement Policy (OFPP)
capabilities. In making such a
allocated to Government contracts. under 41 U.S.C. 1127 as in effect prior
determination, the agency shall
(2) Senior executive compensation to June 24, 2014 are unallowable (10
consider, at a minimum, for each
limit for contracts awarded before June U.S.C. 2324(e)(1)(P) as in effect prior to
June 24, 2014.) This limitation is the contractor employee in a narrowly
24, 2014—(i) Applicability. This
paragraph (p)(2) applies to the sole statutory limitation on allowable targeted excepted position—
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following: employee compensation costs incurred (A) The amount of taxpayer funded
(A) To all executive agencies, other after January 1, 2012, under contracts compensation to be received by each
than DoD, NASA and the Coast Guard, awarded on or after December 31, 2011 employee; and
for contracts awarded before June 24, and before June 24, 2014. (Note that
(B) The duties and services performed
2014; pursuant to section 803 of Pub. L. 112–
by each employee.
(B) To DoD, NASA, and the Coast 81, 10 U.S.C. 2324, Allowable costs
Guard for contracts awarded before under defense contracts, was amended [FR Doc. 2016–23204 Filed 9–29–16; 8:45 am]
December 31, 2011; by striking ‘‘senior executives’’ and BILLING CODE 6820–EP–P
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Document Created: 2018-02-09 13:33:40
Document Modified: 2018-02-09 13:33:40
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective: September 30, 2016. | |
| Contact | Ms. Kathlyn J. Hopkins, Procurement Analyst, at 202-969-7226, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-91, FAR Case 2014-012. | |
| FR Citation | 81 FR 67778 | |
| RIN Number | 9000-AM75 |
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