[Federal Register Volume 77, Number 74 (Tuesday, April 17, 2012)]
[Notices]
[Pages 22766-22768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9112]


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

DEPARTMENT OF DEFENSE

 GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

[OMB Control No. 9000-0177; Docket No. 2011-0076; Sequence 4]


Submission for OMB Review; Comment Request; Reporting Executive 
Compensation and First-Tier Subcontract Awards

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Notice.

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

SUMMARY: Under the provisions of the Paperwork Reduction Act, the 
Regulatory Secretariat will be submitting to the Office of Management 
and Budget (OMB) a request to review and approve a previously approved 
information collection requirement for Reporting Executive Compensation 
and First-tier Subcontract Awards. An initial notice soliciting public 
comments on the information collection was published in the Federal 
Register at 75 FR 39414, on July 8, 2010, as part of an interim rule 
under FAR case 2008-039. The public comments received on only the 
information collection are addressed in this notice under, 
SUPPLEMENTARY INFORMATION. Comments on the rest of the interim rule 
will be addressed with the issuance of the final rule.
    Public comments are particularly invited on: whether this 
collection of information is necessary for the proper performance of 
functions of the Federal Acquisition Regulations (FAR), and whether it 
will have practical utility; whether our estimate of the public burden 
of this collection of information is accurate, and based on valid 
assumptions and methodology; ways to enhance the quality, utility, and 
clarity of the information to be collected; and ways in which we can 
minimize the burden of the collection of information on those who are 
to respond, through the use of appropriate technological collection 
techniques or other forms of information technology.

DATES: Submit comments on or before May 17, 2012.

ADDRESSES: Submit comments identified by Information Collection 9000-
0177, Reporting Executive Compensation and First-tier Subcontract 
Awards, by any of the following methods:
     Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by searching the OMB 
control number. Select the link ``Submit a Comment'' that corresponds 
with ``Information Collection 9000-0177, Reporting Executive 
Compensation and First-tier Subcontract Awards.'' Follow the 
instructions provided at the ``Submit a Comment'' screen. Please 
include your name, company name (if any), and ``Information Collection 
9000-0177, Reporting Executive Compensation and First-tier Subcontract 
Awards'' on your attached document.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street NE., 
Washington, DC 20417.
     Instructions: Please submit comments only and cite 
``Information Collection 9000-0177, Reporting

[[Page 22767]]

Executive Compensation and First-tier Subcontract Awards,'' in all 
correspondence related to this collection. All comments received will 
be posted without change to http://www.regulations.gov, including any 
personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT: Mr. William Clark, Procurement 
Analyst, Contract Policy Division, at telephone 202-219-1813 or via 
email to [email protected].

SUPPLEMENTARY INFORMATION: 

I. Purpose

    The Federal Funding Accountability and Transparency Act 
(``Transparency Act''), Public Law 109-282, as amended by section 6202 
of Public Law 110-252, was enacted to reduce ``wasteful and unnecessary 
spending'' by requiring that OMB establish a free, public, online 
database containing full disclosure of all Federal contract award 
information for awards of $25,000 or more.
    DoD, GSA, and NASA published an interim rule for public comment at 
75 FR 39414, on July 8, 2010, to implement the Transparency Act 
reporting requirements. The rule requires the insertion of FAR clause 
52.204-10, Reporting Executive Compensation and First-Tier Subcontract 
Awards, in solicitations and contracts (including commercial item 
contracts and commercially available off-the-shelf (COTS) item 
contracts) of $25,000 or more.
    The clause at 52.204-10 requires, unless otherwise directed by the 
contracting officer, for first-tier subcontracts valued at $25,000 or 
more, prime contractors to report first-tier subcontract award data 
(e.g., name, amount, address, etc.). If the contractor in the previous 
tax year had gross income, from all sources, under $300,000, the 
contractor is exempt from the requirement to report first-tier 
subcontractor awards. If a first-tier subcontractor in the previous tax 
year had gross income from all sources under $300,000, the contractor 
does not need to report awards to that first-tier subcontractor. 
Contractors will provide these subcontract reports to the Federal 
Funding Accountability and Transparency Act Subaward Reporting System 
(FSRS) (http://www.fsrs.gov). DoD, GSA, and NASA note that there is 
pre-population of some data in FSRS from other Government systems.
    The clause at 52.204-10 also requires a contractor to report in the 
Central Contractor Registration (CCR) database at http://www.ccr.gov, 
the names and total compensation of each of its five most highly 
compensated executives for the contractor's preceding completed fiscal 
year. Contractors and first-tier subcontractors are not required to 
report the total compensation information required by the rule, 
unless--
    (i) In the contractor or subcontractor's preceding fiscal year, the 
contractor or subcontractor received--
    (1) 80 percent or more of its annual gross revenues in Federal 
contracts (and subcontracts), loans, grants (and subgrants), 
cooperative agreements; and
    (2) $25,000,000 or more in annual gross revenue from Federal 
contracts (and subcontracts), loans, grants (and subgrants), 
cooperative agreements; and
    (ii) The public does not have access to information about the 
compensation of the executives through periodic reports filed under 
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 
U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 
1986. (To determine if the public has access to the compensation 
information, see the U.S. Security and Exchange Commission total 
compensation filings at http://www.sec.gov/answers/execomp.htm.)

II. Analysis of Public Comments

    Comments were received on the information collection requirement 
estimated annual burden as well as the interim rule. DoD, GSA, and NASA 
have revised the information collection requirement estimated annual 
burden as a result of analysis of the public comments. The comments on 
the rest of the interim rule will be addressed with the issuance of the 
final rule. The analysis of public comments is summarized as follows:
    Comment: A respondent commented that DoD, GSA, and NASA 
significantly underestimated the costs associated with the reporting 
requirements, and failed to include in the calculations of such costs 
the time required to research and obtain the required information. A 
respondent expressed concern about the overhead rate of 36.35 percent 
used in the ``per hour'' calculations. The respondent commented that a 
rate of 90 percent is more accurate as the work will be performed by 
corporate personnel with both fringe and facility components. 
Additionally, the respondent indicated that while some subcontractors 
will be excluded from reporting compensation, prime contractors will be 
obligated to conduct research in order to ensure that subcontractor 
exclusion determinations are accurate. Several respondents opined that 
DoD, GSA, and NASA's determination that prime contractors will require 
only 1 hour to comply with the reporting requirements does not 
anticipate the time and costs for complying with the clause.
    Response: DoD, GSA, and NASA have concluded that the reporting 
requirements are, for the most part, annual submissions, hence; the 
preparation of the reports does not require a full time position. A 
company officer or division manager or a company subcontract 
administrator, as part of their official duties, would have the 
professional skills necessary for the preparation of the report. DoD, 
GSA, and NASA point out that the overhead rate consist of employee paid 
benefits, time off, along with payroll taxes and other staff employment 
benefit-related expenses (direct personnel expense); not the cost of 
heating, lighting, rent, etc., (general and administrative expenses) 
which would be ongoing operating costs incurred by prime contractors 
notwithstanding the reporting requirements. Based on this information, 
DoD, GSA and NASA have determined that while the overhead rate of 36.35 
percent used in the ``per hour'' calculations may appear to be low, the 
overhead rate of 36.35 is adequate for the estimated burden 
calculation.
    DoD, GSA, and NASA agree that prime contractors will require 
additional time to meet the reporting requirements, as such, the 
combined ``Preparation Hours per Response'' time are revised from ``1'' 
hour to ``2.12'' hours. DoD, NASA and GSA note that a number of aspects 
of the clause may lessen the reporting requirement on businesses, 
including exceptions in the clause that exclude some contractors from 
reporting the information, and pre-population of data in FSRS from 
other Government systems.
    Comment: Several respondents question the estimated cost to the 
public of $21 million to report subcontract award data, and commented 
that the cost is not sufficient to meet the Congressional intent of a 
free public Web site since the expense will borne by the taxpayer. 
Another respondent suggested that the Government consider the cost 
benefit of implementing the rule.
    Response: DoD, GSA, and NASA have revised the combined estimated 
cost to the public to be $36,478,804. While the respondent did not 
provide an alternative estimate or a basis to support its contention, 
the revised estimate is based on a re-evaluation of the time to meet 
the reporting requirement and Fiscal Year 2010 (FY10) FPDS data 
collected for the applicable contract actions.
    The reporting is required to implement the Transparency Act that

[[Page 22768]]

was mandated by Congress. The Paperwork Burden Act information 
collection analysis was performed to determine the administrative 
burden on the public including the cost associated with collecting and 
reporting on the requirement.

III. Annual Reporting Burden

    DoD, GSA, and NASA estimate the annual burden associated with 
reporting requirements of FAR 52.204-10 to be $36,478,804.
    1. Reporting first-tier subcontract award information. The FY10 
Federal Procurement Data System (FPDS) data collected for new contract 
actions valued at $25,000 or greater, indicated that there were 76,889 
contractors with unique DUNS numbers. DoD, GSA, and NASA estimate that 
based on the exemptions in the rule (e.g., contractors in the previous 
tax year with less than $300,000 in gross income do not have to 
report), seventy-five percent of the contractors with actions valued at 
$25,000 or greater would be subject to the reporting requirements. The 
burden to report the subcontractor award information (e.g., name, 
amount, address, etc.) under FAR 52.204-10 is estimated to average 2 
hours per response for a prime contractor and approximately three 
first-tier subcontractors per prime contractor. We estimate the total 
annual public cost burden for these elements to be $31,370,848 based on 
the following:
    Respondents: 230,668.
    Responses per respondent: 1.
    Total annual responses: 230,668.
    Preparation hours per response: 2.
    Total response burden hours: 461,336.
    Average hourly wages ($50.00 + 36.35% overhead. Rounded to nearest 
dollar): $68.00.
    Estimated cost to the public: $31,370,848.
    2. Reporting executive compensation. There were 625,884 active 
registrants in CCR as of January 1, 2012. Of the 625,884 total active 
registrants, 620,777 were screened out by two questions supporting the 
rule's requirements, i.e., didn't have 80% or more of their annual 
gross revenue in U.S. Federal contracts, grants, and/or cooperative 
agreements and didn't make more than $25 million in annual gross 
revenue, or did have 80% or $25 million from Federal contracts/grants/
cooperative agreements, but the public already had access to the 
information. DoD, GSA, and NASA estimate that it would require those 
620,777 registrants 0.10 hours per response, for a total of 62,078 
response hours.
    A total of 5,107 CCR registrants have entered actual values for 
their top five most highly compensated executives. Additionally, there 
were 90 registrants that provided their executive compensation 
responses to FSRS rather than CCR. So, the total additional burden 
imposed to respond to all three questions posed in the reporting tool 
is 5,197. DoD, GSA, and NASA estimate that it would require those 5,197 
registrants 2.5 hours to provide the information required, for a total 
of 12,993 response hours.
    Therefore, DoD, GSA, and NASA estimate that the total population of 
respondents is 625,974, and the total estimated response hours is 
75,071, resulting in a weighted average of 0.12 hours per respondent 
for executive compensation reporting.
    The Councils estimate the total annual public cost burden for this 
element to be $5,107,956 based on the following:
    Respondents: 625,974 (subcontractors and prime contractors).
    Responses per respondent: 1.
    Total annual responses: 625,974.
    Preparation hours per response: 0.12.
    Total response burden hours: 75,117.
    Average hourly wages: ($50.00 + 36.35% overhead): $68.00.
    Estimated cost to the public: $5,107,956.
    Based on the above calculations, DoD, GSA, and NASA estimate the 
total annual burden associated with reporting requirements of FAR 
52.204-10 to be $36,478,804. The reporting burden includes the time for 
reviewing instructions, and reporting the data. It does not cover the 
time required to conduct research or the time to obtain the information 
for the data elements.
    Requesters may obtain a copy of the supporting statement from the 
General Services Administration, Regulatory Secretariat (MVCB), 1275 
First Street NE., Washington, DC 20417, telephone 202-501-4755. Please 
cite OMB Control No. 9000-0177, Reporting Executive Compensation and 
First-tier Subcontract Awards, in all correspondence.

    Dated: April 11, 2012.
Laura Auletta,
Director, Office of Governmentwide Acquisition Policy, Office of 
Acquisition Policy, Office of Governmentwide Policy.
[FR Doc. 2012-9112 Filed 4-16-12; 8:45 am]
BILLING CODE 6820-EP-P