Subcontract Reporting Interim Rule
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Subcontract Reporting Interim Rule 
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By: Lauryn Hoff
Abstract:
An interim rule went into effect last month that will require federal contractors and certain subcontractors with specific levels of activity to report executive compensation and first-tier subcontractor awards. The rule amends the Federal Acquisition Regulation (FAR) to initiate subcontract award reporting under the Transparency Act requiring reporting on subcontract awards by Federal Government contractors and subcontractors. The Office of Management and Budget posted the information on a free, public website with full disclosure.

 

The interim rule states subcontract reporting will apply only to first-tier subcontracts. The rule will phase-in new subcontract awards of $25,000 or more (with exception to classified contracts and contracts with individuals):


• Until September 30, 2010, any new subcontracts must be reported if the prime contract award exceeds $20 million
• From October 30, 2010 until February 28, 2011, any new subcontracts must be reported if the prime contract award exceeds $500,000
• Starting March 1, 2011, any new subcontracts must be reported if the prime contract award exceeds $25,000

In addition, the interim rule states a contractor will have to report the total compensation of the five most highly compensated executives for the preceding fiscal year if they have more than $300,000 in gross income. Those with less than $300,000 in gross income are exempt.

The rule amends the Federal Acquisition Regulation (FAR) to initiate subcontract award reporting under the Transparency Act requiring reporting on subcontract awards by Federal Government contractors and subcontractors.

 

 

The boundaries for this requirement are broad and will encompass many companies that are generally exempt, including women-owned, veteran-owned, and minority-owned companies. Some existing contracts will need to be modified, and public company subsidiaries will have to report as well.

Comments on the interim rule are accepted through September 7.