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DOD, GSA, and NASA Amends Federal Acquisition Regulation on Allowable Government Contractor Compensation Costs Limitation

June 25, 2014



Targeted News Service

WASHINGTON, June 25 -- The U.S. Department of Defense, General Services Administration, and National Aeronautics & Space Administration published the following rule in the Federal Register:

Federal Acquisition Regulation; Limitation on Allowable Government Contractor Compensation Costs

A Rule by the Defense Department, the General Services Administration, and the National Aeronautics and Space Administration on 06/24/2014

Publication Date: Tuesday, June 24, 2014

Agencies: General Services Administration

Department of Defense

National Aeronautics and Space Administration

Entry Type: Rule

Action: Interim rule.

Document Citation: 79 FR 35865

Page: 35865 -35867 (3 pages)

CFR: 48 CFR 31

Agency/Docket Numbers: FAC 2005-75

FAR Case 2014-012

Item III

Docket 2014-0012, Sequence 1

RIN: 9000-AM75

Document Number: 2014-14379

Shorter URL: https://federalregister.gov/a/2014-14379

Action

Interim Rule.

Summary

DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to implement section 702 of the Bipartisan Budget Act of 2013. In accordance with section 702, the interim rule revises the allowable cost limit relative to the compensation of contractor and subcontractor employees. Also, in accordance with section 702, this interim rule implements the possible 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 Date: June 24, 2014.

Comment Date: Interested parties should submit written comments to the Regulatory Secretariat on or before August 25, 2014 to be considered in the formulation of a final rule.

ADDRESSES:

Submit comments identified by FAC 2005-75, FAR Case 2014-012, by any of the following methods:

Regulations.gov: http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by searching for "FAR Case 2014-012". Select the link "Comment Now" that corresponds with "FAR Case 2014-012." Follow the instructions provided at the "Comment Now" screen. Please include your name, company name (if any), and "FAR Case 2014-012" on your attached document.

Fax: 202-501-4067.

Mail: General Services Administration, Regulatory Secretariat (MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 20405.

Instructions: Please submit comments only and cite FAC 2005-75, FAR Case 2014-012, in all correspondence related to this case. All comments received will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT:

Mr. Edward N. Chambers, Procurement Analyst, at 202-501-3221 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-75, FAR Case 2014-012.

SUPPLEMENTARY INFORMATION:

I. Background

The Bipartisan Budget Act of 2013 (Pub. L. 113-67) was enacted on December 26, 2013. Section 702 of the law 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. 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 interim 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 head 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."

In section 702(c), Congress stated that the revised compensation cap "shall apply only with respect to costs of compensation incurred under contracts entered into on or after the date that is 180 days after the date of the enactment of this Act". As the date of enactment was December 26, 2013, 180 days after is June 24, 2014. Accordingly, the revised compensation cap in this interim rule will apply to the costs of compensation for all contractor and subcontractor employees for contracts awarded, and costs incurred, on or after June 24, 2014.

[*Federal RegisterVJ 2014-06-24]

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