Office of Federal Procurement Policy; Determination of Statutory Formula Benchmark Compensation Amount for Certain Executives and Contractor Employees, 13833-13834 [2016-05766]

Download as PDF asabaliauskas on DSK3SPTVN1PROD with NOTICES Federal Register / Vol. 81, No. 50 / Tuesday, March 15, 2016 / Notices individual’s military discharge papers, the appropriate branch of military service, or the Department of Veterans’ Affairs. Without a claimant’s military information, a SWA cannot adequately determine the eligibility of exservicemembers and would not be properly able to administer the program. UCXA section 3 and Social Security Act section 303(a)(6) authorize this information collection. See 5 U.S.C. 8523; 42 U.S.C. 503(a)(6). This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number. See 5 CFR 1320.5(a) and 1320.6. The DOL obtains OMB approval for this information collection under Control Number 1205–0176. OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the current approval for this collection is scheduled to expire on March 31, 2016. The DOL seeks to extend PRA authorization for this information collection for three (3) more years, without any change to existing requirements. The DOL notes that existing information collection requirements submitted to the OMB receive a month-to-month extension while they undergo review. For additional substantive information about this ICR, see the related notice published in the Federal Register on August 12, 2015 (80 FR 48339). Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the ADDRESSES section within thirty (30) days of publication of this notice in the Federal Register. In order to help ensure appropriate consideration, comments should mention OMB Control Number 1205–0176. The OMB is particularly interested in comments that: • Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; • Evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; VerDate Sep<11>2014 17:40 Mar 14, 2016 Jkt 238001 • Enhance the quality, utility, and clarity of the information to be collected; and • Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. Agency: DOL–ETA. Title of Collection: Unemployment Compensation for Ex-Servicemembers Handbook. OMB Control Number: 1205–0176. Affected Public: Individuals or Households; State, Local, and Tribal Governments. Total Estimated Number of Respondents: 102,735. Total Estimated Number of Responses: 107,816. Total Estimated Annual Time Burden: 2,139 hours. Total Estimated Annual Other Costs Burden: $0. Dated: March 9, 2016. Michel Smyth, Departmental Clearance Officer. [FR Doc. 2016–05809 Filed 3–14–16; 8:45 am] BILLING CODE 4510–FW–P OFFICE OF MANAGEMENT AND BUDGET Office of Federal Procurement Policy; Determination of Statutory Formula Benchmark Compensation Amount for Certain Executives and Contractor Employees Office of Federal Procurement Policy, Office of Management and Budget. ACTION: Notice. AGENCY: The Office of Management and Budget is publishing the attached memorandum to the Heads of Executive Departments and Agencies announcing that the ‘‘benchmark compensation amount’’ for certain executives and contractor employees in terms of costs allowable under Federal Government covered contracts during the contractor’s fiscal years 2013 and 2014 is $980,796 and $1,144,888, respectively. These statutory formula cap determinations are required under Section 39 of the Office of Federal Procurement Policy Act, as amended (41 U.S.C. 1127). These benchmark compensation amounts apply to both defense and civilian agencies for their respective applicable periods, but only SUMMARY: PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 13833 for contracts awarded before June 24, 2014. FOR FURTHER INFORMATION CONTACT: Raymond Wong, Office of Federal Procurement Policy, at 202–395–6805. Anne E. Rung, Administrator, Office of Federal Procurement Policy. MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES FROM: Anne E. Rung, Administrator, Office of Federal Procurement Policy. SUBJECT: Determination of the Statutory Formula Benchmark Compensation Amount for Fiscal Years 2013 and 2014 for Certain Executives and Contractor Employees, Pursuant to Section 39 of the Office of Federal Procurement Policy Act, as amended (41 U.S.C. 1127) This memorandum sets forth the benchmark compensation amount for certain employees of Federal Government contractors as required by Section 39 of the Office of Federal Procurement Policy (OFPP) Act, as amended (41 U.S.C. 1127, otherwise known as the statutory formula cap) for the cost allowability purposes of section 4304(a)(16) of title 41 and section 2324(e)(1)(P) of title 10 for covered contracts awarded before June 24, 2014. For covered contracts awarded on or after June 24, 2014, a new cap applies pursuant to section 702 of the Bipartisan Budget Act of 2013 (BBA), Pub. L. 113– 67, December 26, 2013. For contracts awarded prior to June 24, 2014, section 1127 limits the reimbursement or allowability of compensation costs under Federal Government contracts as implemented at Federal Acquisition Regulation (FAR) 31.205–6(p). In less technical terms, the statutory formula cap places a ceiling on the total annual compensation costs the Federal Government will reimburse a contractor for the compensation package the contractor provides to certain of its employees for work done pursuant to certain Federal Government covered contracts. This statutory formula cap applies to limit the reimbursement of the compensation costs of certain contractor senior executives on covered contracts with civilian and defense agencies. Additionally, as a result of changes made by section 803 of the National Defense Authorization Act for FY 2012, Public Law 112–81, December 31, 2011, for covered contracts with defense agencies (i.e., DOD, NASA and Coast Guard), the statutory formula cap was expanded to cover all other contractor employees and applies to the compensation costs incurred after E:\FR\FM\15MRN1.SGM 15MRN1 asabaliauskas on DSK3SPTVN1PROD with NOTICES 13834 Federal Register / Vol. 81, No. 50 / Tuesday, March 15, 2016 / Notices December 31, 2011. With both civilian and defense agencies, the statutory formula cap applies only when the contractor is performing covered contracts that are of either a costreimbursable nature or other cost-based nature. Section 1127 sets out a formula for determining the cap amount. Specifically, the statutory formula cap amount is set at the median (50th percentile) amount of compensation provided, over the most recent year for which data is available, to the five most highly compensated employees in management positions at each home office and each segment of all publiclyowned U.S. companies with annual sales over $50 million. The determination is based on analysis of data made available by the Securities and Exchange Commission. Compensation means the total amount of wages, salaries, bonuses, restricted stock, deferred and performance incentive compensation, and other compensation for the year, whether paid, earned, or otherwise accruing, as recorded in the employer’s cost accounting records for the year. Since enactment of the statutory formula in 1998, the cap has increased more than 300%. In 2010, the President began calling on Congress to replace the current statutory formula cap with a lower, more sensible limit that is on par with what the Government pays its own executives and employees. In December 2013, with the Administration’s strong support, Congress reformed the ceiling on the reimbursement of contractor employee compensation. Section 702 of the BBA replaced section 1127 with a new cap of $487,000 to be adjusted annually to reflect the change in the Employment Cost Index for all workers as calculated by the Bureau of Labor Statistics (otherwise known as the BBA cap). The new $487,000 BBA cap provides a reasonable level of compensation for high value Federal contractor employees while ensuring taxpayers are not saddled with paying excessive compensation costs. On June 24, 2014, the Federal Acquisition Regulatory Council issued an interim rule to amend the Federal Acquisition Regulation to reflect the new BBA cap and issuance of a final rule is pending. However, the new $487,000 BBA cap applies on a prospective basis only to contracts awarded on or after June 24, 2014. Because the statutory formula cap continues to apply to contracts awarded before June 24, 2014, the Administration is compelled by statute to determine the statutory formula cap amount for FYs 2013 and 2014 in accordance with the statutory formula set forth in section VerDate Sep<11>2014 17:40 Mar 14, 2016 Jkt 238001 1127 to address these pre-existing contracts. After consultation with the Director of the Defense Contract Audit Agency, OFPP has determined, pursuant to the requirements of section 1127, that the statutory formula cap amount for the ceiling on the compensation of a contractor employee covered by this provision is $980,796 for FY 2013, and $1,144,888 for FY 2014. Each of these statutory formula cap amounts applies to limit the reimbursement, by the Government to the contractor, of the costs of compensation for certain contractor employees for costs incurred on all covered contracts, at the beginning of the contractor FY that begins January 1 for the respective year (or pro-rated over that portion of the contractor FY that includes January 1 for the respective year). The statutory formula cap amount (i.e., $980,796) for FY 2013 is applicable to compensation costs incurred on all covered contracts during the period of January 1, 2013 through December 31, 2013 for the contractor’s fiscal year. The statutory formula cap amount (i.e., $1,144,888) for FY 2014 is applicable on all covered contracts to compensation costs incurred as of January 1, 2014 and continues in subsequent contractor FYs, unless and until revised by OFPP. As explained above, this statutory formula cap applies only to covered contracts awarded before June 24, 2014 for both defense and civilian procurement agencies to limit the reimbursement of the compensation costs for certain contractor employees. Employers continue to have the discretion to compensate their employees at any level they deem appropriate. The statutory formula cap only limits how much the Government will reimburse the contractors for the services of those affected employees. Questions concerning this memorandum may be addressed to Raymond Wong, OFPP, at 202–395– 6805. [FR Doc. 2016–05766 Filed 3–14–16; 8:45 am] BILLING CODE P NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES Meetings of Humanities Panel National Endowment for the Humanities. ACTION: Notice of meetings. AGENCY: The National Endowment for the Humanities will hold twenty-three meetings of the Humanities Panel, a federal advisory committee, during SUMMARY: PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 April, 2016. The purpose of the meetings is for panel review, discussion, evaluation, and recommendation of applications for financial assistance under the National Foundation on the Arts and Humanities Act of 1965. DATES: See SUPPLEMENTARY INFORMATION section for meeting dates. ADDRESSES: The meetings will be held at Constitution Center at 400 7th Street SW., Washington, DC 20506. See SUPPLEMENTARY INFORMATION for meeting room numbers. FOR FURTHER INFORMATION CONTACT: Elizabeth Voyatzis, Committee Management Officer, 400 7th Street SW., Room 4060, Washington, DC 20506; (202) 606–8322; evoyatzis@ neh.gov. Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (5 U.S.C. App.), notice is hereby given of the following meetings: 1. DATE: April 1, 2016. TIME: 8:30 a.m. to 5:00 p.m. ROOM: Virtual Panel. This meeting will discuss applications for Next Generation Ph.D.: Planning Grants, submitted to the Office of Challenge Grants. 2. DATE: April 4, 2016. TIME: 8:30 a.m. to 5:00 p.m. ROOM: Virtual Panel. This meeting will discuss applications for Next Generation Ph.D.: Planning Grants, submitted to the Office of Challenge Grants. 3. DATE: April 5, 2016. TIME: 8:30 a.m. to 5:00 p.m. ROOM: 4002. This meeting will discuss applications on the subjects of World Art and Culture, for Museums, Libraries and Cultural Organizations: Planning Grants, submitted to the Division of Public Programs. 4. DATE: April 6, 2016. TIME: 8:30 a.m. to 5:00 p.m. ROOM: Via Conference Call. This meeting will discuss applications on the subjects of U.S. History and Culture, for Museums, Libraries and Cultural Organizations: Planning Grants, submitted to the Division of Public Programs 5. DATE: April 6, 2016. TIME: 8:30 a.m. to 5:00 p.m. ROOM: Virtual Panel. This meeting will discuss applications for Next Generation Ph.D.: Planning Grants, submitted to the Office of Challenge Grants. 6. DATE: April 7, 2016. TIME: 8:30 a.m. to 5:00 p.m. ROOM: 4002. This meeting will discuss applications on the subjects of History SUPPLEMENTARY INFORMATION: E:\FR\FM\15MRN1.SGM 15MRN1

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[Federal Register Volume 81, Number 50 (Tuesday, March 15, 2016)]
[Notices]
[Pages 13833-13834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-05766]


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OFFICE OF MANAGEMENT AND BUDGET


Office of Federal Procurement Policy; Determination of Statutory 
Formula Benchmark Compensation Amount for Certain Executives and 
Contractor Employees

AGENCY: Office of Federal Procurement Policy, Office of Management and 
Budget.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Office of Management and Budget is publishing the attached 
memorandum to the Heads of Executive Departments and Agencies 
announcing that the ``benchmark compensation amount'' for certain 
executives and contractor employees in terms of costs allowable under 
Federal Government covered contracts during the contractor's fiscal 
years 2013 and 2014 is $980,796 and $1,144,888, respectively. These 
statutory formula cap determinations are required under Section 39 of 
the Office of Federal Procurement Policy Act, as amended (41 U.S.C. 
1127). These benchmark compensation amounts apply to both defense and 
civilian agencies for their respective applicable periods, but only for 
contracts awarded before June 24, 2014.

FOR FURTHER INFORMATION CONTACT: Raymond Wong, Office of Federal 
Procurement Policy, at 202-395-6805.

Anne E. Rung,
Administrator, Office of Federal Procurement Policy.

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES

FROM: Anne E. Rung, Administrator, Office of Federal Procurement 
Policy.
SUBJECT: Determination of the Statutory Formula Benchmark Compensation 
Amount for Fiscal Years 2013 and 2014 for Certain Executives and 
Contractor Employees, Pursuant to Section 39 of the Office of Federal 
Procurement Policy Act, as amended (41 U.S.C. 1127)

    This memorandum sets forth the benchmark compensation amount for 
certain employees of Federal Government contractors as required by 
Section 39 of the Office of Federal Procurement Policy (OFPP) Act, as 
amended (41 U.S.C. 1127, otherwise known as the statutory formula cap) 
for the cost allowability purposes of section 4304(a)(16) of title 41 
and section 2324(e)(1)(P) of title 10 for covered contracts awarded 
before June 24, 2014. For covered contracts awarded on or after June 
24, 2014, a new cap applies pursuant to section 702 of the Bipartisan 
Budget Act of 2013 (BBA), Pub. L. 113-67, December 26, 2013.
    For contracts awarded prior to June 24, 2014, section 1127 limits 
the reimbursement or allowability of compensation costs under Federal 
Government contracts as implemented at Federal Acquisition Regulation 
(FAR) 31.205-6(p). In less technical terms, the statutory formula cap 
places a ceiling on the total annual compensation costs the Federal 
Government will reimburse a contractor for the compensation package the 
contractor provides to certain of its employees for work done pursuant 
to certain Federal Government covered contracts. This statutory formula 
cap applies to limit the reimbursement of the compensation costs of 
certain contractor senior executives on covered contracts with civilian 
and defense agencies. Additionally, as a result of changes made by 
section 803 of the National Defense Authorization Act for FY 2012, 
Public Law 112-81, December 31, 2011, for covered contracts with 
defense agencies (i.e., DOD, NASA and Coast Guard), the statutory 
formula cap was expanded to cover all other contractor employees and 
applies to the compensation costs incurred after

[[Page 13834]]

December 31, 2011. With both civilian and defense agencies, the 
statutory formula cap applies only when the contractor is performing 
covered contracts that are of either a cost-reimbursable nature or 
other cost-based nature.
    Section 1127 sets out a formula for determining the cap amount. 
Specifically, the statutory formula cap amount is set at the median 
(50th percentile) amount of compensation provided, over the most recent 
year for which data is available, to the five most highly compensated 
employees in management positions at each home office and each segment 
of all publicly-owned U.S. companies with annual sales over $50 
million. The determination is based on analysis of data made available 
by the Securities and Exchange Commission. Compensation means the total 
amount of wages, salaries, bonuses, restricted stock, deferred and 
performance incentive compensation, and other compensation for the 
year, whether paid, earned, or otherwise accruing, as recorded in the 
employer's cost accounting records for the year.
    Since enactment of the statutory formula in 1998, the cap has 
increased more than 300%. In 2010, the President began calling on 
Congress to replace the current statutory formula cap with a lower, 
more sensible limit that is on par with what the Government pays its 
own executives and employees. In December 2013, with the 
Administration's strong support, Congress reformed the ceiling on the 
reimbursement of contractor employee compensation. Section 702 of the 
BBA replaced section 1127 with a new cap of $487,000 to be adjusted 
annually to reflect the change in the Employment Cost Index for all 
workers as calculated by the Bureau of Labor Statistics (otherwise 
known as the BBA cap). The new $487,000 BBA cap provides a reasonable 
level of compensation for high value Federal contractor employees while 
ensuring taxpayers are not saddled with paying excessive compensation 
costs. On June 24, 2014, the Federal Acquisition Regulatory Council 
issued an interim rule to amend the Federal Acquisition Regulation to 
reflect the new BBA cap and issuance of a final rule is pending. 
However, the new $487,000 BBA cap applies on a prospective basis only 
to contracts awarded on or after June 24, 2014. Because the statutory 
formula cap continues to apply to contracts awarded before June 24, 
2014, the Administration is compelled by statute to determine the 
statutory formula cap amount for FYs 2013 and 2014 in accordance with 
the statutory formula set forth in section 1127 to address these pre-
existing contracts.
    After consultation with the Director of the Defense Contract Audit 
Agency, OFPP has determined, pursuant to the requirements of section 
1127, that the statutory formula cap amount for the ceiling on the 
compensation of a contractor employee covered by this provision is 
$980,796 for FY 2013, and $1,144,888 for FY 2014. Each of these 
statutory formula cap amounts applies to limit the reimbursement, by 
the Government to the contractor, of the costs of compensation for 
certain contractor employees for costs incurred on all covered 
contracts, at the beginning of the contractor FY that begins January 1 
for the respective year (or pro-rated over that portion of the 
contractor FY that includes January 1 for the respective year). The 
statutory formula cap amount (i.e., $980,796) for FY 2013 is applicable 
to compensation costs incurred on all covered contracts during the 
period of January 1, 2013 through December 31, 2013 for the 
contractor's fiscal year. The statutory formula cap amount (i.e., 
$1,144,888) for FY 2014 is applicable on all covered contracts to 
compensation costs incurred as of January 1, 2014 and continues in 
subsequent contractor FYs, unless and until revised by OFPP. As 
explained above, this statutory formula cap applies only to covered 
contracts awarded before June 24, 2014 for both defense and civilian 
procurement agencies to limit the reimbursement of the compensation 
costs for certain contractor employees.
    Employers continue to have the discretion to compensate their 
employees at any level they deem appropriate. The statutory formula cap 
only limits how much the Government will reimburse the contractors for 
the services of those affected employees.
    Questions concerning this memorandum may be addressed to Raymond 
Wong, OFPP, at 202-395-6805.

[FR Doc. 2016-05766 Filed 3-14-16; 8:45 am]
 BILLING CODE P