Thursday, December 20, 2012

NDAA Provision to Lower Compensation Caps Eliminated

Here's some good news for contractors. The 2013 National Defense Authorization Act (NDAA) emerged from a congressional conference committee on Tuesday missing a few provisions that contractors were opposing including caps on compensation that would limit amounts to the Vice President's salary. In lieu of this provision, the committee recommended further study on the matter.

The conference committee version of the 2013 NDAA orders up a GAO (General Accountability Office) review of the effect of reducing the allowable costs of contractor compensation. The report must include at a minimum, the following:

  1. An estimate of the total number of contractor employees whose allowable costs of compensation in each of fiscal years 2010 through 2012 would have exceeded the amount of allowable costs if those costs were capped at the President's and another study if the costs were capped at the Vice President's salary.
  2. An estimate of the total number of contractor employees in fiscal year 2012 that could have been characterized as falling within a narrowly targeted exception established by the Secretary of Defense (scientists and computer guys), a description of their duties and services, and their compensation.
  3. An assessment of the extent to which contractor employees received compensation in the form of vested or unvested stock options
  4. An assessment of the potential impact on the DoD, contractors of the DoD, and employees of such contractors of reducing the amount of allowable compensation.

The GAO report is due within 120 days of enactment of this bill.

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