[Federal Register Volume 78, Number 123 (Wednesday, June 26, 2013)]
[Rules and Regulations]
[Pages 38537-38538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-15213]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket FAR 2013-0078, Sequence 4]


Federal Acquisition Regulation; Federal Acquisition Circular 
2005-68; Small Entity Compliance Guide

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

ACTION: Small Entity Compliance Guide.

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SUMMARY: This document is issued under the joint authority of DOD, GSA, 
and NASA. This Small Entity Compliance Guide has been prepared in 
accordance with section 212 of the Small Business Regulatory 
Enforcement Fairness Act of 1996. It consists of a summary of the rule 
appearing in Federal Acquisition Circular (FAC) 2005-68, which amends 
the Federal Acquisition Regulation (FAR). An asterisk (*) next to a 
rule indicates that a regulatory flexibility analysis has been 
prepared. Interested parties may obtain further information regarding 
this rule by referring to FAC 2005-68, which precedes this document. 
These documents are also available via the Internet at http://www.regulations.gov.

DATES: June 26, 2013.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
the analyst whose name appears in the table below. Please cite FAC 
2005-68 and the 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 Senior Executive Compensation        2012-017   Chambers.
 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

[[Page 38538]]

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.
[FR Doc. 2013-15213 Filed 6-25-13; 8:45 am]
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