Department of Defense Attempts to Mitigate the Effects of Multiple Compensation Caps
Over the last few years, Congress has changed the law regarding contractor compensation twice. First, Section 803 of the 2012 National Defense Authorization Act (NDAA), P.L. 112-81, expanded the executive compensation cap found in Federal Acquisition Regulation (FAR) 31.105-6(p) to all compensation costs charged to Department of Defense (“DoD”) contracts. This expansion was to be implemented in the FAR within 180 days after enactment of the NDAA, and “shall apply with respect to costs of compensation incurred after January 1, 2012, under [DoD] contracts entered into before, on, or after the date of the enactment of this Act.” Despite that. Read More.
DCAA Issues Revised Guidance on Billing Oversights
On September 26, 2014, the Defense Contract Audit Agency (“DCAA”) issued Memorandum for Regional Directors (MRD) 14-PPS-017(R) , “Guidance on Revised Policies and Procedures for Billing Oversight”. The MRD provides additional procedures for DCAA to follow when determining risk and provides streamlined consistency in public voucher approval. As a result of the guidance, contractors may begin to see changes in how DCAA is reviewing vouchers on a real-time basis. Whether or not this will save you face time (and phone time) with your auditors is yet to be seen. For contractors previously on the Direct Bill program, the MRD clarifies that the Direct Bill program no. Read More.
Universal ID System for Government Contracts Coming by 2017
In a move that seems to have garnered little attention so far, a final rule in the Federal Register was issued which calls for a government-wide system of creating unique identifiers for contract numbers. What started as a recommendation of the Government Accountability and Transparency Board has now become reality – the Federal Acquisition Regulation (FAR) Subpart 4.16–Unique Procurement Instrument Identifiers, details the requirements and deadlines for compliance. To be in place no later than October 1, 2017, all federal agencies which issue financial transactions (procurements, grants, contracts, and finance) are required to comply. The reason for implementing this new. Read More.
Do the New Expanded Compensation Caps Establish the Reasonableness of Compensation?
Section 702 of the Bi-Partisan Budget Act of 2012 (BBA) amended 10 U.S.C. §2324(e)(1)(P) and 41 U.S.C. §4304(a)(16) provide that: The following costs are not allowable under a covered contract: Costs of compensation of contractor and subcontractor employees for a fiscal year, regardless of the contract funding source, to the extent that such compensation exceeds $487,000 per year, adjusted annually to reflect the change in the Employment Cost Index for all workers, as calculated by the Bureau of Labor Statistics. The statute was implemented in Federal Acquisition Regulation (FAR) 31.205-6(p)(3). We have become aware that some contractors are interpreting §702. Read More.
Debarment Penalty for Violating the Service Contract Act
Earlier this year, the Department of Labor (“DoL”) debarred a company and its owner/manager for three years for violations of the McNamara-O’Hara Service Contract Act (SCA) (41 U.S.C. Sec. 6701 et. seq.). Debarment is a severe punishment, so the Federal Acquisition Regulation (FAR) allows government contractors the opportunity to demonstrate why debarment is not necessary in certain situations. However, statutory debarments are a different matter. The SCA prescribes a three-year debarment for violations of the act unless there are unusual circumstances. This particular case (DoL Wage and Hour Division (“WHD”) vs. Garcia Forest Service, LLC & Samuel Garcia and Flor. Read More.
New Federal Contractor Minimum Wage Rule
Around 200,000 employees of federal contractors performing on construction, service, concession and federal property contracts can look forward to a pay raise on contracts awarded after January 1, 2015. The Department of Labor issued final regulations to implement President Obama’s executive order to increase the federal minimum wage from the current $7.25 per hour to $10.10. The rule applies to all employees covered by the Fair Labor Standards Act (FLSA), Service Contract Act (SCA), and Davis-Bacon Act (DBA) for employees that work directly on a contract, as well as those who execute additional duties necessary to the performance of the. Read More.