Rule Would Impose Annual Reporting Requirements for Certain Federal Service Contractors

A new proposed rule would impose additional reporting requirements on federal service contractors. Issued by the Department of Defense (DoD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA), the proposal (pdf) would amend the Federal Acquisition Regulation (FAR) to require service contractors for federal agencies other than the DoD that are covered by the Federal Activities Inventory Reform (FAIR) Act of 1998 to report the following information for each covered contract by October 31 of each year:

  1. Contract number and, as applicable, task order number.
  2. The total dollar amount invoiced for services performed during the previous fiscal year under the contract.
  3. The number of contractor direct labor hours expended on the services performed during the previous fiscal year.
  4. Data collected by October 15 of each year from each first-tier subcontractor working on each covered contract. Such information would include the subcontract number (including subcontractor name, and, if available, Data Universal Numbering System (DUNS) number associated with the subcontract number); and the number of first-tier subcontractor direct-labor hours expended on services performed during the previous government fiscal year.

The reporting requirements for contracts and orders would apply to all cost-reimbursement, time-and-materials, and labor-hour service contracts and orders with an estimated total value above the simplified acquisition threshold, currently $150,000. As for fixed-price contracts, the proposal institutes a tiered phase-in approach to minimize the impact of the proposed requirements. To that end, the rule would apply to fixed-price contracts awarded or orders issued with a total value of $5 million or more in FY 2011; those valued at $2.5 million or more in FY 2012; $1 million or more in FY 2013; and $500,000 or more in FY 2014.

Comments on this proposed rule must be received within 60 days of its publication in the Federal Register, which is scheduled for April 20, 2011. Comments must include the FAR Case number: 2010-010, and may be filed electronically through the federal eRulemaking portal, via fax: 202-501-4067, or by regular mail to: General Services Administration, FAR Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street, NE., Washington, DC 20405.

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Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.