Sec. 702. Limitation on allowable government contractor compensation costs
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Section 4304(a)(16) of title 41, United States Code, is amended to read as follows: Costs of compensation of contractor and subcontractor employees for a fiscal year, regardless of the contract funding source, to the extent that such compensation exceeds $487,000 per year, adjusted annually to reflect the change in the Employment Cost Index for all workers, as calculated by the Bureau of Labor Statistics, except that the head of an executive agency may establish one or more narrowly targeted exceptions for scientists, engineers, or other specialists upon a determination that such exceptions are needed to ensure that the executive agency has continued access to needed skills and capabilities. .
Section 2324(e)(1)(P) of title 10, United States Code, is amended to read as follows: Costs of compensation of contractor and subcontractor employees for a fiscal year, regardless of the contract funding source, to the extent that such compensation exceeds $487,000 per year, adjusted annually to reflect the change in the Employment Cost Index for all workers, as calculated by the Bureau of Labor Statistics, except that the head of an executive agency may establish one or more narrowly targeted exceptions for scientists, engineers, or other specialists upon a determination that such exceptions are needed to ensure that the executive agency has continued access to needed skills and capabilities. .
Section 1127 of title 41, United States Code, is hereby repealed. The table of sections at the beginning of chapter 11 of title 41, United States Code, is amended by striking the item relating to section 1127. This section and the amendments made by this section shall apply only with respect to costs of compensation incurred under contracts entered into on or after the date that is 180 days after the date of the enactment of this Act. Not later than 60 days after the end of each fiscal year, the Director of the Office of Management and Budget shall submit a report on contractor compensation to— the Committee on Armed Services of the Senate; the Committee on Armed Services of the House of Representatives; the Committee on Homeland Security and Governmental Affairs of the Senate; the Committee on Oversight and Government Reform of the House of Representatives; the Committee on Appropriations of the Senate; and the Committee on Appropriations of the House of Representatives.
The report required under paragraph
(1)shall include— the total number of contractor employees, by executive agency, in the narrowly targeted exception positions described under subsection
(a)during the preceding fiscal year; the taxpayer-funded compensation amounts received by each contractor employee in a narrowly targeted exception position during such fiscal year; and the duties and services performed by contractor employees in the narrowly targeted exception positions during such fiscal year. Not later than 90 days after the date of the enactment of this Act, the Secretary of Defense and the Director of the Office of Management and Budget shall report to Congress on alternative benchmarks and industry standards for compensation, including whether any such benchmarks or standards would provide a more appropriate measure of allowable compensation for the purposes of section 2324(e)(1)(P) of title 10, United States Code, and section 4304(a)(16) of title 41, United States Code, as amended by this Act.