Federal Acquisition Regulation; Limitation on Allowable Government Contractor Compensation Costs, 35865-35867 [2014-14379]
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Federal Register / Vol. 79, No. 121 / Tuesday, June 24, 2014 / Rules and Regulations
concerns, and eligible women-owned
small business (WOSB) concerns (see 13
CFR 127.200–13 and 127.305 for
eligibility and certification
requirements), in industries determined
by the Small Business Administration
(SBA) to be underrepresented or
substantially underrepresented by small
business concerns owned and
controlled by women, with respect to
Federal procurement.
Pursuant to this statutory change and
in conformance with the Small Business
Administration’s (SBA’s) revised
regulations at 13 CFR 127.503(a)(2) and
127.503(b)(2) (see SBA’s interim final
rule published in the Federal Register at
78 FR 26504 on May 7, 2013), an
interim FAR rule was published in the
Federal Register at 78 FR 37692 on June
21, 2013, removing the dollar
limitations for set-asides to EDWOSB
concerns or WOSB concerns eligible
under the WOSB Program. The interim
rule allows contracting officers to set
aside acquisitions for competition
restricted to EDWOSB concerns or
WOSB concerns eligible under the
WOSB Program at any dollar level above
the micro-purchase threshold, provided
the other requirements for a set-aside
under the WOSB Program are met.
mstockstill on DSK4VPTVN1PROD with RULES2
II. Discussion and Analysis
The comment period for the FAR
interim rule closed on August 20, 2013.
No public comments were received;
therefore DoD, GSA, and NASA are
finalizing the interim rule without
change.
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 not a significant
regulatory action and, therefore, was not
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:
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18:07 Jun 23, 2014
Jkt 232001
The objective of this final rule is to finalize
the changes set forth in section 1697 of the
National Defense Authorization Act for fiscal
year 2013. Section 1697 eliminated the
statutory limitations (thresholds) at section
8(m) of the Small Business Act, (15 U.S.C.
637(m)), for set-asides to economically
disadvantaged women-owned small business
(EDWOSB) concerns and to women-owned
small business (WOSB) concerns eligible
under the WOSB Program in industries that
are underrepresented or substantially
underrepresented by WOSB concerns. This
final rule follows an interim rule that was
published in the Federal Register at 78 FR
37692 on June 21, 2013, which removed the
set-aside limitations set forth at FAR
19.1505(b)(2) and (c)(2), in keeping with the
statutory change and SBA’s revised
regulations.
There were no comments received in
response to the interim rule by its closing
date of August 20, 2013. Therefore, the
changes made in the interim rule will be
adopted as final, without change, allowing
contracting officers to set aside acquisitions
for competition restricted to EDWOSB
concerns or WOSB concerns eligible under
the WOSB Program at any dollar level above
the micro-purchase threshold, provided the
other requirements for a set-aside under the
WOSB Program are met.
Analysis of the Federal Procurement Data
System from April 1, 2011 (the
implementation date of the WOSB Program)
through January 1, 2013, revealed that there
were approximately 26,712 WOSB concerns,
including 131 EDWOSB concerns and 388
WOSB concerns eligible under the WOSB
Program, that received obligated funds from
Federal contract awards, task or delivery
orders, and modifications to existing
contracts. This final rule may have a
significant positive economic impact on
EDWOSB concerns competing for contracting
opportunities in industries determined by
SBA to be underrepresented by WOSB
concerns and may positively affect WOSB
concerns eligible under the WOSB Program
competing in industries determined by SBA
to be substantially underrepresented by
WOSB concerns, since removing the dollar
threshold for set-asides under the WOSB
Program will provide greater access to
Federal contracting opportunities. However,
this rule may have a negative effect on firms
that are women-owned but are not WOSB
Program participants and small businesses
that are not owned by women because those
firms may now be excluded from competition
on some acquisitions that previously could
not be set aside for EDWOSB concerns or
WOSB concerns eligible under the WOSB
Program due to the dollar thresholds and
now will be set aside.
This final rule does not impose new
recordkeeping or reporting requirements. The
rule does not duplicate, overlap, or conflict
with any other Federal rules. There are no
alternatives to the rule that would
accomplish the stated objectives of the
statute.
Interested parties may obtain a copy
of the FRFA from the Regulatory
Secretariat. The Regulatory Secretariat
PO 00000
Frm 00009
Fmt 4701
Sfmt 4700
35865
has submitted a copy of the FRFA to the
Chief Counsel for Advocacy of the Small
Business Administration.
V. Paperwork Reduction Act
The final rule does not contain any
information collection requirements that
require the approval of the Office of
Management and Budget under the
Paperwork Reduction Act (44 U.S.C.
chapter 35).
List of Subjects in 48 CFR Part 19
Government procurement.
Dated: June 13, 2014.
William Clark,
Acting Director, Office of Government-Wide
Acquisition Policy, Office of Acquisition
Policy, Office of Government-Wide Policy.
Interim Rule Adopted as Final Without
Change
Accordingly, the interim rule
amending 48 CFR part 19 which was
published in the Federal Register at 78
FR 37692 on June 21, 2013, is adopted
as a final rule without change.
■
[FR Doc. 2014–14381 Filed 6–23–14; 8:45 am]
BILLING CODE 6820–EP–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Part 31
[FAC 2005–75; FAR Case 2014–012; Item
III; Docket 2014–0012, Sequence 1]
RIN 9000–AM75
Federal Acquisition Regulation;
Limitation on Allowable Government
Contractor Compensation Costs
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Interim rule.
AGENCY:
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
SUMMARY:
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35866
Federal Register / Vol. 79, No. 121 / Tuesday, June 24, 2014 / Rules and Regulations
mstockstill on DSK4VPTVN1PROD with RULES2
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: https://
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 https://
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
VerDate Mar<15>2010
18:07 Jun 23, 2014
Jkt 232001
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.
II. 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.
III. Regulatory Flexibility Act
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. However, an Initial Regulatory
Flexibility Analysis (IRFA) has been
prepared and is summarized as follows:
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.
PO 00000
Frm 00010
Fmt 4701
Sfmt 4700
The interim 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.
The Regulatory Secretariat has
submitted a copy of the IRFA to the
Chief Counsel for Advocacy of the Small
Business Administration. A copy of the
IRFA may be obtained from the
Regulatory Secretariat. DoD, GSA, and
NASA invite comments from small
business concerns and other interested
parties on the expected impact of this
rule on small entities.
DoD, GSA, and NASA will also
consider comments from small entities
concerning the existing regulations in
subparts affected by this rule in
accordance with 5 U.S.C. 610. Interested
parties must submit such comments
separately and should cite 5 U.S.C. 610
(FAC 2005–75, FAR Case 2014–012) in
correspondence.
IV. Paperwork Reduction Act
The interim rule does not contain any
information collection requirements that
require the approval of the Office of
Management and Budget under the
Paperwork Reduction Act (44 U.S.C.
chapter 35).
V. Determination To Issue an Interim
Rule
A determination has been made under
the authority of the Secretary of Defense
(DoD), the Administrator of General
Services Administration (GSA), and the
Administrator of the National
Aeronautics and Space Administration
(NASA) that urgent and compelling
reasons exist to promulgate this interim
rule without prior opportunity for
public comment. This action is
necessary because section 702 of Pub. L.
113–67, signed into law on December
26, 2013, required that it shall apply
only with respect to the 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 (June 24, 2014). This statute
revises the allowable cost limit relative
to the compensation costs of contractor
and subcontractor employees.
Therefore, issuing an interim rule that is
effective upon publication, prior to the
receipt of public comment will allow
agencies and contractors to implement
the requirements of this law by the
required date of June 24, 2014. Pursuant
to 41 U.S.C. 1707 and FAR 1.501–3(b),
DoD, GSA, and NASA will consider
public comments received in response
to this interim rule in the formation of
the final rule.
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Federal Register / Vol. 79, No. 121 / Tuesday, June 24, 2014 / Rules and Regulations
List of Subjects in 48 CFR Part 31
Government procurement.
Dated: June 13, 2014.
William Clark,
Acting Director, Office of Government-Wide
Acquisition Policy, Office of Acquisition
Policy, Office of Government-Wide Policy.
Therefore, DoD, GSA, and NASA
amend 48 CFR part 31, as set forth
below:
PART 31—CONTRACT COST
PRINCIPLES AND PROCEDURES
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.
2. Amend section 31.205–6 by—
a. Revising the heading of paragraph
(p), and paragraphs (p)(1) and (p)(2);
■ b. Redesignating paragraph (p)(3) as
paragraph (p)(4); and
■ c. Adding a new paragraph (p)(3).
The revised and added text reads as
follows:
■
■
31.205–6 Compensation for personal
services.
*
*
*
*
(p) Limitation on allowability of
compensation. (1) Senior executive
compensation limit for contracts
awarded before June 24, 2014. (i)
Applicability. This paragraph (p)(1)
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. 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
mstockstill on DSK4VPTVN1PROD with RULES2
*
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)(4) has been
changed for compensation costs
incurred after January 1, 1999.)
(2) All employee compensation limit
for contracts awarded before June 24,
2014. (i) Applicability. This paragraph
(p)(2) 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. 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 are unallowable
(10 U.S.C. 2324(e)(1)(P)).
(3) All employee compensation limit
for contracts awarded on or after June
24, 2014. (i) Applicability. This
paragraph (p)(3) 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. 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 of the Office of
Federal Procurement Policy are
unallowable. See https://
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. 2014–14379 Filed 6–23–14; 8:45 am]
BILLING CODE 6820–EP–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Chapter 1
[Docket No. FAR 2014–0052, Sequence No.
3]
Federal Acquisition Regulation;
Federal Acquisition Circular 2005–75;
Small Entity Compliance Guide
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
AGENCY:
ACTION:
Small Entity Compliance Guide.
This document is issued
under the joint authority of DOD, GSA,
and NASA. This Small Entity
Compliance Guide has been prepared in
accordance with section 212 of the
Small Business Regulatory Enforcement
Fairness Act of 1996. It consists of a
summary of the rules appearing in
Federal Acquisition Circular (FAC)
2005–75, which amends the Federal
Acquisition Regulation (FAR). An
asterisk (*) next to a rule indicates that
a regulatory flexibility analysis has been
prepared. Interested parties may obtain
further information regarding these
rules by referring to FAC 2005–75,
which precedes this document. These
documents are also available via the
Internet at https://www.regulations.gov.
SUMMARY:
DATES:
June 24, 2014.
For
clarification of content, contact the
analyst whose name appears in the table
below. Please cite FAC 2005–75 and the
FAR case number. For information
pertaining to status or publication
schedules, contact the Regulatory
Secretariat at 202–501–4755.
FOR FURTHER INFORMATION CONTACT:
RULES LISTED IN FAC 2005–75
Item
Subject
*I ............................
*II ...........................
*III ..........................
EPEAT Items (Interim) ...........................................................................................................
Contracting with Women-Owned Small Business Concerns ................................................
Limitation on Allowable Government Contractor Compensation Costs (Interim) ..................
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PO 00000
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FAR Case
Sfmt 4700
E:\FR\FM\24JNR2.SGM
24JNR2
2013–016
2013–010
2014–012
Analyst
Chambers.
Morgan.
Chambers.
]]>Agencies
[Federal Register Volume 79, Number 121 (Tuesday, June 24, 2014)]
[Rules and Regulations]
[Pages 35865-35867]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-14379]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 31
[FAC 2005-75; FAR Case 2014-012; Item III; Docket 2014-0012, Sequence
1]
RIN 9000-AM75
Federal Acquisition Regulation; Limitation on Allowable
Government Contractor Compensation Costs
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
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
[[Page 35866]]
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: https://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 https://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.
II. 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.
III. Regulatory Flexibility Act
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.
However, an Initial Regulatory Flexibility Analysis (IRFA) has been
prepared and is summarized as follows:
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 interim 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.
The Regulatory Secretariat has submitted a copy of the IRFA to the
Chief Counsel for Advocacy of the Small Business Administration. A copy
of the IRFA may be obtained from the Regulatory Secretariat. DoD, GSA,
and NASA invite comments from small business concerns and other
interested parties on the expected impact of this rule on small
entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by this rule
in accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAC 2005-75, FAR Case
2014-012) in correspondence.
IV. Paperwork Reduction Act
The interim rule does not contain any information collection
requirements that require the approval of the Office of Management and
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
V. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services Administration
(GSA), and the Administrator of the National Aeronautics and Space
Administration (NASA) that urgent and compelling reasons exist to
promulgate this interim rule without prior opportunity for public
comment. This action is necessary because section 702 of Pub. L. 113-
67, signed into law on December 26, 2013, required that it shall apply
only with respect to the 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 (June 24, 2014). This statute revises the
allowable cost limit relative to the compensation costs of contractor
and subcontractor employees. Therefore, issuing an interim rule that is
effective upon publication, prior to the receipt of public comment will
allow agencies and contractors to implement the requirements of this
law by the required date of June 24, 2014. Pursuant to 41 U.S.C. 1707
and FAR 1.501-3(b), DoD, GSA, and NASA will consider public comments
received in response to this interim rule in the formation of the final
rule.
[[Page 35867]]
List of Subjects in 48 CFR Part 31
Government procurement.
Dated: June 13, 2014.
William Clark,
Acting Director, Office of Government-Wide Acquisition Policy, Office
of Acquisition Policy, Office of Government-Wide Policy.
Therefore, DoD, GSA, and NASA amend 48 CFR part 31, as set forth
below:
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--
0
a. Revising the heading of paragraph (p), and paragraphs (p)(1) and
(p)(2);
0
b. Redesignating paragraph (p)(3) as paragraph (p)(4); and
0
c. Adding a new paragraph (p)(3).
The revised and added text reads as follows:
31.205-6 Compensation for personal services.
* * * * *
(p) Limitation on allowability of compensation. (1) Senior
executive compensation limit for contracts awarded before June 24,
2014. (i) Applicability. This paragraph (p)(1) 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. 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)(4) has been changed
for compensation costs incurred after January 1, 1999.)
(2) All employee compensation limit for contracts awarded before
June 24, 2014. (i) Applicability. This paragraph (p)(2) 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. 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 are unallowable (10
U.S.C. 2324(e)(1)(P)).
(3) All employee compensation limit for contracts awarded on or
after June 24, 2014. (i) Applicability. This paragraph (p)(3) 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. 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 of the Office of Federal
Procurement Policy are unallowable. See https://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. 2014-14379 Filed 6-23-14; 8:45 am]
BILLING CODE 6820-EP-P
