OFPP and DoD Seek Input on Allowable Employee Compensation

The Office of Federal Procurement Policy and the Department of Defense seek public input for a report to Congress on alternative measures of allowable reimbursement for the compensation of contractor employees. The report is required by section 702 of the Bipartisan Budget Act of 2013 (PL 113-67).

Section 702 established a cap of $487,000 per year on the amount the government will reimburse for contractor-paid employee compensation on contracts with defense and civilian agencies. By law, this amount must be adjusted annually to reflect the change in the Employment Cost Index for all workers, as calculated by the Bureau of Labor Statistics.

OFPP and DoD seek comments on alternative benchmarks that would provide a more appropriate measure of allowable compensation for the purposes of 10 USC 2324(e)(1)(P) and 41 USC 4304(a)(16), as amended by section 702 (including appropriate inflators).

Feedback should describe the alternative and explain why the proposed method might be more suitable than the benchmark and inflators set forth in the statute.

Comments are due October 16, 2016. For more information, see the Federal Register notice.

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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