Executive Pay Rules are in Effect

In an earlier Law Tip we reported on the new requirements related to reporting executive compensation (Nov 2010, Vol.VI, No.1).

Under the rule, effective July 8, 2010, the Federal Acquisition Regulations (FAR) was amended to implement section 2 of the Federal Funding Accountability and Transparency Act of 2006 and Government Funding and Transparency Act of 2008, which requires the Office of Management of the Budget (OMB) to establish a free, public website containing full disclosure of all Federal contract award information. This rule required contractors on contracts containing FAR 52.204-10 to report executive compensation and first-tier subcontract awards on contracts and orders expected to be $25,000 or more. The requirement was phased in, but since March 1, 2011, any newly awarded subcontract had to be reported if the prime contract award amount was $25,000 or more.

However, the new requirement is also included on the Central Contractor Registration (CCR), and must be provided when registration is renewed. Therefore, even if you do not have any contracts with the FAR clause you will likely need to report the information when you update your registration which you must do to bid on Federal contracts and submit invoices for payment. Contractors and subcontractors are exempt if their gross income from all sources is less than $300K. The executive financial disclosure is required for the five most highly compensated executives, but only if a contractor or subcontractor received at least 80% of its annual gross revenue and $25M or more from Federal awards during the prior tax year. The rule requires contractors to report first-tier subcontract data at http://www.fsrs.gov. The rule also requires contractors to report the names and total compensation of each of the contractor’s five most highly compensated executives at http://www.ccr.gov., and the contractor is required to make a similar report for subcontractors at http://www/fsrs.gov.

Authored by attorney Mike Sterling, these articles are meant to bring awareness to these topics and are not intended to be used as legal advice.
For more information, contact Mike at 757-446-8626 or Bill Franczek at 757-446-8600.
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