New reporting requirements for federal contractors
Employers with covered federal contracts must report information on first-tier subcontracts and executive compensation, to be posted on a free, public website, under an interim regulation that applies to federal solicitations issued on or after July 8, 2010. The new rule stems from the Government Funding Transparency Act of 2008 (P.L. 110-252), which aims to reduce waste in federal spending by requiring full disclosure of federal contracts.
The duty to report newly awarded first-tier subcontracts will occur in stages. At first, it applies to subcontracts worth at least $20 million. Beginning October 1, 2010, the threshold drops to $550,000, and then on March 1, 2011, it drops even lower, to $25,000. However, prime contractors whose gross income (from all sources) is under $300,000 dont have to file reports. Prime contractors also dont have to file reports on subcontractors whose gross income is under $300,000. The reporting requirements dont apply to classified contracts or contracts with individuals.
The duty to report the total compensation of the five most highly compensated executives of the prime contractor and of the first-tier subcontractor depends on several factors. It must be reported if the amount of the federal contract or subcontract is at least $25,000, the company receives at least 80 percent of its annual gross revenues from federal sources, the company receives at least $25 million in annual gross revenues from federal sources, and the public doesnt already have access to the compensation information through filings with the SEC or the IRS (75 Fed Reg 39414, July 8, 2010). Questions about your reporting obligations? Contact your Vigilant staff representative.
This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult legal counsel.