[Federal Register Volume 78, Number 123 (Wednesday, June 26, 2013)]
[Rules and Regulations]
[Page 38534]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-15211]



[[Page 38533]]

Vol. 78

Wednesday,

No. 123

June 26, 2013

Part IV





Department of Defense





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General Services Administration





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National Aeronautics and Space Administration





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48 CFR Chapter 1





Federal Acquisition Regulations; Final Rules and Proposed Rule

  Federal Register / Vol. 78 , No. 123 / Wednesday, June 26, 2013 / 
Rules and Regulations  

[[Page 38534]]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket FAR 2013-0076, Sequence 4]


Federal Acquisition Regulation; Federal Acquisition Circular 
2005-68; Introduction

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

ACTION: Summary presentation of an interim rule.

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SUMMARY: This document summarizes the Federal Acquisition Regulation 
(FAR) rule agreed to by the Civilian Agency Acquisition Council and the 
Defense Acquisition Regulations Council (Councils) in this Federal 
Acquisition Circular (FAC) 2005-68. A companion document, the Small 
Entity Compliance Guide (SECG), follows this FAC. The FAC, including 
the SECG, is available via the Internet at http://www.regulations.gov.

DATES: For effective dates and comment dates see separate documents, 
which follow.

FOR FURTHER INFORMATION CONTACT: The analyst whose name appears in the 
table below in relation to the FAR case. Please cite FAC 2005-68 and 
the specific FAR case number. For information pertaining to status or 
publication schedules, contact the Regulatory Secretariat at 202-501-
4755.

                       Rule Listed in FAC 2005-68
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             Subject                   FAR Case            Analyst
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Expansion of Applicability of the        2012-017   Chambers.
 Senior Executive Compensation
 Benchmark (Interim).
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@@SUPPLEMENTARY INFORMATION: Summary for the FAR rule follow. For the 
actual revisions and/or amendments made by this FAR case, refer to the 
specific item number and subject set forth in the document following 
this item summary. FAC 2005-68 amends the FAR as specified below:

Expansion of Applicability of the Senior Executive Compensation 
Benchmark (FAR Case 2012-017) (Interim)

    This interim rule amends the FAR to implement the statutorily-
expanded reach of the limitation on the allowability of compensation 
costs for certain contractor personnel. This limitation on the 
allowability of compensation costs is an amount set annually by the 
Office of Federal Procurement Policy. Prior to the enactment of section 
803 of the National Defense Authorization Act for Fiscal Year 2012 
(Pub. L. 112-81), this limitation applied to a contractor's five most 
highly compensated employees in management positions at each home 
office and each segment of the contractor, with respect to all 
contracts subject to the FAR cost principles with all Federal agencies. 
In section 803, Congress expanded the application of the limitation so 
that it applies to all contractor employees, rather than just the top 
five executives in the case of contracts covered by Title 10 of the 
United States Code. Moreover, Congress in section 803(c)(2) stated that 
this expanded reach ``shall apply with respect to costs of compensation 
incurred after January 1, 2012, under contracts entered into before, 
on, or after the date of the enactment of this Act'' (the date of 
enactment was December 31, 2011). Section 803(c)(1) also provided that 
this change shall be implemented in the FAR.
    This interim rule implements section 803 and provides that for DoD, 
NASA, and Coast Guard contracts, the compensation limitation applies to 
all contractor employees, rather than just the top five executives. For 
contracts with agencies other than DoD, NASA, and the Coast Guard, the 
reach of the limitation was not changed by section 803 and therefore 
will continue to be a contractor's five most highly compensated 
employees in management positions at each home office and each segment 
of the contractor.
    An analysis of data in the Federal Procurement Data System (FPDS) 
revealed that 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.
    Section 803 is being implemented in the FAR through two 
rulemakings. In accordance with section 803, this interim rule applies 
to the compensation costs of all contractor employees incurred after 
January 1, 2012, on all DoD, NASA, and Coast Guard contracts awarded on 
or after December 31, 2011. Concurrently, DoD, GSA, and NASA are 
issuing a proposed rule (FAR Case 2012-025) to solicit comments on the 
application of the requirements of section 803 to DoD, NASA, and Coast 
Guard contracts entered into before December 31, 2011.

    Dated: June 10, 2013.
Laura Auletta,
Director, Office of Governmentwide Acquisition Policy, Office of 
Acquisition Policy, Office of Governmentwide Policy.

    Federal Acquisition Circular (FAC) 2005-68 is issued under the 
authority of the Secretary of Defense, the Administrator of General 
Services, and the Administrator for the National Aeronautics and Space 
Administration.
    Unless otherwise specified, all Federal Acquisition Regulation 
(FAR) and other directive material contained in FAC 2005-68 is 
effective June 26, 2013.

    Dated: June 17, 2013.
Richard Ginman,
Director, Defense Procurement and Acquisition Policy.
    Dated: June 10, 2013.
Laura Auletta,
Acting Senior Procurement Executive, Office of Acquisition Policy, U.S. 
General Services Administration.
    Dated: June 13, 2013.
Ronald A. Poussard,
Director, Contract Management Division, Office of Procurement, National 
Aeronautics and Space Administration.
[FR Doc. 2013-15211 Filed 6-25-13; 8:45 am]
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