[Federal Register Volume 61, Number 241 (Friday, December 13, 1996)]
[Rules and Regulations]
[Pages 65478-65479]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31677]


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DEPARTMENT OF DEFENSE

48 CFR Part 231

[DFARS Case 96-D330]


Defense Federal Acquisition Regulation Supplement; Individual 
Compensation

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

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SUMMARY: The Director of Defense Procurement has issued an interim rule 
amending the Defense Federal Acquisition Regulation Supplement (DFARS) 
to implement Section 8071 of Pub. L. 104-208 by placing a ceiling on 
allowable individual compensation

[[Page 65479]]

under DoD contracts when payments are from funds appropriated in fiscal 
year 1997.

DATES:  Effective date: December 13, 1996.
    Comment date: Comments on the interim rule should be submitted in 
writing to the address shown below on or before February 11, 1997, to 
be considered in the formulation of the final rule.

ADDRESSES: Interested parties should submit written comments to: 
Defense Acquisition Regulations Council, Attn: Ms. Sandra G. Haberlin, 
PDUSD (A&T) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 
20301-3062. Telefax number (703) 602-0350. Please cite DFARS Case 96-
D330 in all correspondence related to this issue.

FOR FURTHER INFORMATION CONTACT:
Ms. Sandra G. Haberlin, (703) 602-0131.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule revises DFARS 231.205-6, Compensation for 
Personal Services, to implement Section 8071 of the National Defense 
Appropriations Act for Fiscal Year 1997 (Pub. L. 104-208). Section 8071 
limits allowable individual compensation costs for all contractor 
personnel to $250,000 per year. This restriction applies to DoD 
contracts when payments are from funds appropriated in fiscal year 
1997.

B. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense to issue this rule as an interim rule. Urgent and compelling 
reasons exist to promulgate this rule without prior opportunity for 
public comment. This rule implements Section 8071 of the National 
Defense Appropriations Act for Fiscal Year 1997 (Pub. L. 104-208), 
which was effective upon enactment on September 30, 1996. However, 
comments received in response to the publication of this rule will be 
considered in formulating the final rule.

C. Regulatory Flexibility Act

    The interim rule is not expected 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., because most 
contracts awarded to small entities use simplified acquisition 
procedures or are awarded on a competitive, fixed-price basis, and do 
not require application of the cost principle contained in this rule. 
An Initial Regulatory Flexibility Analysis has, therefore, not been 
performed. Comments are invited from small businesses and other 
interested parties. Comments from small entities concerning the 
affected DFARS subpart also will be considered in accordance with 
Section 610 of the Act. Such comments should be submitted separately 
and should cite DFARS Case 96-D330 in correspondence.

D. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the interim rule 
does not impose any new reporting or recordkeeping requirements which 
require the approval of the Office of Management and Budget under 44 
U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 231

    Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.

    Therefore, 48 CFR Part 231 is amended as follows:
    1. The authority citation for 48 CFR Part 231 continues to read as 
follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 231--CONTRACT COST PRINCIPLES AND PROCEDURES

    2. Section 231.205-6 is amended by redesignating paragraphs 
(a)(2)(i) and (a)(2)(ii) as paragraphs (a)(2)(i)(A) and (a)(2)(i)(B), 
respectively, and by adding a new paragraph (a)(2)(ii) to read as 
follows:


231.205-6  Compensation for personal services.

    (a)(2) * * *
    (ii) Costs for individual compensation in excess of $250,000 per 
year are unallowable under new DoD contracts funded by fiscal year 1997 
appropriations (Section 8071 of Public Law 104-208). For purposes of 
this limitation, the term ``compensation'' means--
    (A) The total amount of taxable wages paid to the employee for the 
year concerned; plus
    (B) The total amount of elective deferred compensation earned by 
the employee in the year concerned.
* * * * *
[FR Doc. 96-31677 Filed 12-12-96; 8:45 am]
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