We have previously provided information about the interim FAR Rule implementing the Federal Funding Accountability Act of 2006, as amended by the Government Funding Transparency Act of 2008. The Rule, which is already in effect, requires many government contractors to report information about their executives’ compensation, their first-tier subcontractors’ executive compensation, and information about their first-tier subcontract awards. Since the Rule was published on July 8, 2010, government contractors have wrestled with difficult questions of interpretation and implementation issues.
The comment period closed on September 7, 2010. Comments (pdf.) submitted by the Council of Defense and Space Industry Associations highlight some of the thorniest questions. Issues include:
1) Does the Rule compromise national security because of mandatory disclosure of information about products and services supplied to the US government?
2) Does the Rule cause competitive harm due to disclosure of subcontractor name and pricing information?
3) How should the executive compensation portion of this Rule be applied to publicly traded companies that have hundreds of DUNS numbers and CCR entries?
It will be interesting to see how the FAR Council addresses these – and other – questions that government contractors are raising.