An interim rule was issued that brings many of the reporting requirements first made public in the American Recovery and Reinvestment Act to the broader scope of federal contracting. The rule calls for reporting executive compensation and first-tier subcontract awards if the prime contractor and its subcontractors meet certain thresholds. It is based on the same point of law, the amended Federal Funding Accountability and Transparency Act of 2006 (a product of then-Senator Obama and Senator Tom Coburn [R-Okla.]).
Under this rule, a prime contractor is required to report for disclosure on www.usaspending.gov the names and compensation of their five most highly compensated officers if in the preceding year the contractor received $25 million or more in revenues from federal contracts and subcontracts and 80 percent or more of its annual gross revenues from federal contracts and it does not already file this information with the SEC. All three must be satisfied to trigger the compensation reporting. The prime contractor is also required to collect and report this compensation information for its first-tier subcontractors if the subcontractor meets the three triggers and the subcontract is for $25 thousand or more.
The prime contractor is also required to report to the system every subcontract if the prime contract is $25 thousand or greater. This requirement is phased in however, as follows:
- Until September 30, 2010, any newly awarded subcontract must be awarded if the prime contract award amount was $20 million or more.
- From October 1, 2010 until February 28, 2011 any newly awarded subcontract must be reported if the prime contract award was $550 thousand or more.
- Starting March 1, 2011, any newly awarded subcontract must be reported if the prime contract award amount was $25 thousand or more.