Type: Law Bulletins
Date: 06/26/2015

Guess How Much it Costs to Report Executive Compensation?

Starting in July 2010, the DoD, GSA and NASA required the reporting of prime and subcontractor executive compensation and first-tier subcontractor awards in solicitations and contracts of $25,000 or more (FAR 52.204-10). The specifics of this clause can be found in our previous law update here.

A recent government study estimated that between the two requirements (prime and first tier subs), the cost of compliance is over $33,000,000 annually.1 This estimate only includes the time for reviewing the instructions and reporting the data. It does not include the time to research and collect the actual data. Since this is what takes the most time, the estimate is clearly understated. The true cost is a much greater burden on contractors.

The Office of Management & Budget ("OMB") is requesting public comments about the following topics:

  • Is the collection of compensation and first tier subcontract award data necessary for the proper performance of the FAR?
  • Does this collection have a practical utility?
  • Is the Council’s estimate of the public burden accurate?
  • How can the burden be minimalized?

The complete Notice and link to comment can be found here.

If you have an interest in responding to OBM’s invitation, your comments must be submitted before July 24, 2015. It remains to be seen, however, what changes, if any, would occur if the comments confirm that the costs of compliance are prohibitively high.

This law update was co-authored by Taft partner Barbara Duncombe and Taft paralegal Christina Heidecker.

1The Council calculated the cost by: Number of Annual Reponses  X  (Preparation Time  X  Average Hourly Wage) = Overall Cost.

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