Government Contracts Monitor

Short Take: What Should Contractors Be Paid?

September 23, 2014

The Bipartisan Budget Act of 2013 (the Act), enacted Dec 26, 2013, sets a ceiling of $487,000 per year on the amount the Government will reimburse a contractor for employee compensation on both defense and civilian agency contracts. This ceiling is to be adjusted each year to reflect the change in the Employment Cost Index for all workers, as calculated by the Bureau of Labor Statistics (BLS). The Act directs OMB and DoD to report to Congress on (i) other compensation benchmarks and industry standards, and (ii) whether any such benchmarks or standards would provide a more appropriate measure of allowable compensation.

The Office of Federal Procurement Policy and the DoD are now seeking public input on these alternative benchmarks – on what “would provide a more appropriate measure of allowable compensation” – that is, alternatives to BLS’s Employment Cost Index for all workers. Request for Comments, Sept. 16, 2014. This is your chance to tell them what you think.

Input received from the public will be considered and used in preparation of the report to Congress. The notice invites comment by October 16, 2014, and asks those who intend to comment to “both describe the alternative(s) and explain why such might be more suitable than the benchmark and inflators set forth in statute.” Comments can be emailed to compcap@omb.eop.gov.

Attorneys

Lindsay Simmons