Bloomberg BNA recently published "View From Brown Rudnick: New FAR Rule Extends Reimbursement Cap for Compensation Paid to Contractor Employees" by Partner Ken Weckstein and Associate Pamela Reynolds, both members of the Firm's Government Contracts & Litigation Group. The article discusses the Federal Acquisition Regulation (‘‘FAR’’) Council's new rule that limits the allowability of compensation costs for government contractors.
From the Article
"For right or wrong, over the years there have been complaints that taxpayers should not have to foot the bill for hefty salaries paid to government contractor executives and employees, which in some cases are well above the salaries paid to their government customers, members of Congress, and even the president. Like any other company, government contractors are free to pay their employees however much they choose, but the government will not reimburse compensation costs for certain employees over a specified amount set by the Office of the Federal Procurement Policy (‘‘OFPP’’) each year. To that end, the Federal Acquisition Regulation (‘‘FAR’’) Council has issued a final rule further limiting the allowability of compensation costs for government contractors. While the move has drawn criticism from private industry, it may be difficult for some to feel much sympathy. The compensation cap for 2012 was just shy of a million dollars."
Read the full article here.