This post was written by Lorraine Campos and Steve Tibbets.
Federal contractors can add yet another item to their lists of databases in which they register and disclose information. As of July 8, 2010, contracting officers are to modify certain federal contracts to include a Federal Acquisition Regulation (“FAR”) clause that requires certain contractors to register in two locations and potentially provide two new types of information: (1) information regarding subcontracts must be disclosed via the Federal Funding Accountability and Transparency Act Subaward Reporting System at www.fsrs.gov; and (2) information regarding executive compensation must be reported via the Central Contractor Registration database at ccr.gov. 75 F.R. 39414 (July 8, 2010).
The subcontract reporting requirement applies to all prime contracts worth $25,000 or more. The prime contractor must report a number of items for any first-tier subcontract worth $25,000 or more, including the name and address of the subcontractor, the amount of the subcontract, and the nature of the items or services being acquired. The requirement is being “phased in” so that, until September 30, 2010, the reporting requirement only applies to prime contracts worth at least $20 million and, until March 1, 2011, the reporting requirement only applies to prime contracts worth at least $550,000. After March 1, 2011, the subcontract reporting requirement applies to all contracts over $25,000 in value.
The compensation reporting requirement requires contractors to identify the five most highly-compensated executives and report the amount of their compensation. This requirement only applies to contractors that have both annual revenue of at least $25 million from federal contracts, grants, and/or loans and derive at least 80% of their annual revenue from federal contracts, grants, and/or loans.
These reporting requirements have had the force of law since their promulgation on July 8, 2010. The regulatory body that issued the requirements, the FAR Council, is accepting comments on this interim rule until September 7, 2010. Therefore, companies that wish to persuade the FAR Council to abandon or modify the rule have a little over a month to do so.