The Department of Defense, the General Services Administration and the National Aeronautics and Space Administration July 8 issued an
interim final rule requiring federal contractors to report first-tier contracts once they are awarded and the compensation amounts for the five top-earning executives of their first-tier subcontractor.
The rule implements a section of the Government Funding Transparency Act of 2008, which amends the Federal Funding Accountability and Transparency Act of 2006 (FFATA). FFATA required the Office of Management and Budget to create a public website containing information about government contracts when they are awarded.
The contract reporting requirements apply to federal contractors who had a gross revenue of at least $300,000 in the preceding tax year. These requirements also dictate that all first-tier subcontracts worth at least $25,000, including options, be reported. The compensation reporting requirements apply to contractors and subcontractors that received at least 80 percent of their annual gross revenue totaling at least $25 million from federal contracts, loans, grants or cooperative agreements, and do not already report that information in other filings with the Securities Exchange Commission or the Internal Revenue Service.
Although the compensation rule is effective immediately, the subcontract reporting rule will be phased in. Starting immediately, the subcontract reporting requirements apply to prime contracts of at least $20 million. Beginning Oct. 1, the rule will apply to prime contracts worth at least $550,000, and on March 1, 2011, the full rule will kick in and apply to all contracts worth $25,000 or more.
Contractors can report the required information by using the
Federal Funding Accountability and Transparency Act Sub-award Reporting System (FSRS) and the information will be available to the public at
USASpending.gov.