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  • Question

    When determining unallowable compensation, does one escalate the June 24, 2014 BBA cap amount of $487,000 by the ECI factor published by the BLS do calculate a current year BBA cap amount?


    Answer

    No, as of Sep 2016, the OMB has not released an adjustment to the statutory cap on reimbursement of compensation costs for contractor employees.  The current cap, for contracts awarded on or after 24 Jun 2014, is $487,000.  Contracts prior to that date are calculated per 41 U.S.C. 1127, the statutory compensation cap formula. 
     
    There are exceptions where the head of the agency can waive this cap, outlined in section 702 of the Bipartisan Budget Act of 2013.  Additionally, the OMB solicited public feedback on "alternative measures of allowable reimbursement for compensation of contractor employees", which can be found on page 55507 of the Federal Register (Vol 79, No 179, 16 Sep 2014).  The OMB and DoD recommendation upon review of this public feedback was to "not recommend changes to section 702 at this time."  This was published in a joint OMB/DoD memo on 9 Aug 2016. 
     

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