I

104TH CONGRESS

2D SESSION H. R. 3513

To establish limitations on the ability of a Federal agency to pay a contractor

under a contract with the agency for the costs of compensation with

respect to the services of any individual.

IN THE HOUSE OF REPRESENTATIVES

MAY 22, 1996

Mr. SANDERS introduced the following bill; which was referred to the Committee on Government Reform and Oversight, and in addition to the Committee on National Security, for a period to be subsequently determined

by the Speaker, in each case for consideration of such provisions as fall

within the jurisdiction of the committee concerned

A BILL

To establish limitations on the ability of a Federal agency

to pay a contractor under a contract with the agency

for the costs of compensation with respect to the services

of any individual.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. LIMITATION ON COMPENSATION PAID UNDER

4 GOVERNMENT CONTRACTS.

5 (a) ARMED SERVICES ACQUISITIONS.—(1) Section

6 2324 of title 10, United States Code, is amended—
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1 (A) by redesignating subsection (l) as sub2 section (m); and

3 (B) by inserting after subsection (k) the follow4 ing new subsection (l):

5 ‘‘(l) LIMITATION ON COMPENSATION.—

6 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

7 the head of an agency may not obligate funds to pay

8 a contractor under a contract with the agency for

9 the costs of compensation with respect to the serv10 ices of any one individual to the extent that the total

11 amount of the compensation paid in a fiscal year to

12 that individual exceeds $200,000.

13 ‘‘(2) AGGREGATION RULE.—For purposes of de14 termining the limitation on payment to a contractor

15 under paragraph (1), all contracts entered into by

16 the contractor with the agencies covered by this

17 chapter and with all executive agencies (if any) shall

18 be treated as one contract, and the $200,000 limita19 tion with respect to the services of an individual in

20 a fiscal year shall be allocated among the contracts

21 in the manner prescribed in regulation by the Ad22 ministrator for Federal Procurement Policy.

23 ‘‘(3) DEFINITIONS.—In this subsection:

24 ‘‘(A) The term ‘compensation’ includes sal25 aries, bonuses, deferred compensation, stock op-
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1 tions and payouts, certified indirect costs, re2 structuring costs, and performance-based pay3 ments.

4 ‘‘(B) The term ‘executive agency’ has the

5 meaning provided by section 3 of the Federal

6 Property and Administrative Services Act of

7 1949 (41 U.S.C. 472).’’.

8 (2) Subsection (l) of section 2324 of title 10, United

9 States Code, as added by paragraph (1), applies to con10 tracts entered into after the date of the enactment of this

11 Act.

12 (b) CIVILIAN AGENCY ACQUISITIONS.—(1) Section

13 306 of the Federal Property and Administrative Services

14 Act of 1949 (41 U.S.C. 256) is amended—

15 (A) by redesignating subsection (l) as sub16 section (m); and

17 (B) by inserting after subsection (k) the follow18 ing new subsection (l):

19 ‘‘(l) LIMITATION ON COMPENSATION.—

20 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

21 the head of an executive agency may not obligate

22 funds to pay a contractor under a contract with the

23 agency for the costs of compensation with respect to

24 the services of any one individual to the extent that
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1 the total amount of the compensation paid in a fiscal

2 year to that individual exceeds $200,000.

3 ‘‘(2) AGGREGATION RULE.—For purposes of de4 termining the limitation on payment to a contractor

5 under paragraph (1), all contracts entered into by

6 the contractor with all executive agencies and with

7 the Department of Defense, the Coast Guard, and

8 the National Aeronautics and Space Administration

9 (if any) shall be treated as one contract, and the

10 $200,000 limitation with respect to the services of

11 an individual in a fiscal year shall be allocated

12 among the contracts in the manner prescribed in

13 regulation by the Administrator for Federal Pro14 curement Policy.

15 ‘‘(3) DEFINITION.—In this subsection, the term

16 ‘compensation’ includes salaries, bonuses, deferred

17 compensation, stock options and payouts, certified

18 indirect costs, restructuring costs, and performance19 based payments.’’.

20 (2) Subsection (l) of section 306 of the Federal Prop21 erty and Administrative Services Act of 1949 (41 U.S.C.

22 256), as added by paragraph (1), applies to contracts en23 tered into after the date of the enactment of this Act.

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