AGC will hold a free webinar on August 28 from 2:00 PM to 3:00 PM EDT to educate federal contractors about a final executive compensation and subcontractor award rule that is going into effect on August 27. Mr. Edward DeLisle, a partner in the construction and federal contracting groups of Cohen Seglias Pallas Greenhall & Furman PC, will discuss the rule’s scope and how federal contractors can comply with the new rule. To RSVP for the webinar, click here.
The new rule promulgated by the Federal Acquisition Regulation Council burdens prime contractors with reporting not only their top five paid executives, but also their first-tier subcontractor’s top five paid executives when the subcontract has a value of $25,000 or more. A prime contractor must report this information to its first-tier subcontractor when either contractor received at least 80 percent or $25 million or more of its annual gross revenues from federal contracts in the previous calendar year. Executive compensation need not be reported if the public has access to the information through certain periodic reports filed under the Securities Exchange Act of 1934 or the Internal Revenue Code.
When the FAR Council first solicited comments on the interim rule in 2010, AGC expressed its grave concerns with its burden on federal contractors. Among those concerns, AGC noted that many small business contractors lack the infrastructure to track such information and that primes should not be responsible for reporting subcontractor information. In the comments to the final rule, the FAR Council admits the financial burden and further clarified the definition of “first-tier subcontractor.” However, the Council did not alter the prime’s duty to report the subcontractor information, stating that “[t]he Federal Government has no privity of contract with subcontractors and is therefore reluctant to establish communication channels that could potentially be construed as creating a contractual relationship.”
To attend this informational, free webinar on the rule, click here.
For more information, contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org.
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