Federal Acquisition Regulation; Expansion of Applicability of the Senior Executive Compensation Benchmark

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DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to implement section 803 of the National Defense Authorization Act for Fiscal Year 2012. In accordance with section 803, the interim rule expands the application to a broader group of contractor employees on contracts awarded by DoD, NASA, and the Coast Guard of the senior executive compensation benchmark amount which limits the reimbursement of compensation costs. This interim rule applies section 803 prospectively to contracts awarded on or after (but not before) the date of enactment of section 803 (which was December 31, 2011), to the contractor compensation costs incurred after January 1, 2012. In addition, also as part of the implementation in the FAR of section 803, DoD, GSA and NASA are separately issuing a proposed rule (FAR Case 2012-025) that addresses the retroactive application of section 803 to contractor compensation costs incurred after January 1, 2012, under contracts that had been awarded before December 31, 2011.