FAR Rule Addresses Costs of Foreign Contractor Excise Tax

Posted on February 22, 2012 by William Van Huis

The Department of Defense, General Services Administration, and National Aeronautics and Space Administration today issued a proposed rule that would amend the Federal Acquisition Regulation to address the 2 percent tax on certain foreign procurements imposed by the James Zadroga 9/11 Health and Compensation Act of 2010 (PL 111-347). The Act imposes on any foreign person that receives a specified federal procurement payment a tax equal to two percent of the amount of the payment. The rule, Unallowability of Costs Associated With Foreign Contractor Excise Tax (FAR Case 2011-011), would revise the FAR to provide that the costs of the two percent tax are not allowable and are not included in foreign fixed-price contracts and foreign fixed-price contracts with foreign governments. Comments are due April 23, 2012. For the text of the Federal Register notice, click here: http://www.gpo.gov/fdsys/pkg/FR-2012-02-22/pdf/2012-3905.pdf.

About William Van Huis

Bill Van Huis is a Senior Writer/Analyst for Wolters Kluwer Law & Business who tracks and analyzes new regulations impacting federal government contracting. He also follows court decisions involving bid protests and contract disputes. You can find his work in WK publications like Government Contract Reports and the FAR and DFARS Matrix Tools. Bill is a Certified Professional Contracts Manager, and he has a law degree from Southern Illinois University, where he graduated summa cum laude. Prior to joining WK, Bill worked both inside and outside state and local government in the areas of procurement and municipal finance. Bill also worked as a staff attorney for the Illinois Supreme Court.
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