Reporting Executive Compensation and First-Tier Subcontract Awards
FAR 52.204-10 requires timely public reporting of executive compensation and first-tier subcontract awards to ensure transparency and accountability in federal contracting.
Overview
FAR 52.204-10 requires contractors to report executive compensation and first-tier subcontract awards to promote transparency in federal spending. The clause mandates the disclosure of detailed information about subcontract awards and executive pay for both the prime contractor and certain first-tier subcontractors, with specific thresholds and exemptions. The reported data is made public and must be submitted through the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The regulation aims to ensure accountability and prevent the circumvention of reporting requirements by splitting contracts. Contractors must also ensure the accuracy of information in government databases and notify subcontractors that their information will be public.
Key Rules
- Executive Compensation Reporting
- Contractors must annually report the names and total compensation of their five most highly compensated executives if they meet federal revenue thresholds and the information is not already publicly available.
- First-Tier Subcontract Award Reporting
- Contractors must report detailed information on first-tier subcontracts at or above the threshold in FAR 4.1403(a) via FSRS within the month following the award.
- Subcontractor Executive Compensation
- For qualifying first-tier subcontractors, contractors must report the top five executives’ compensation if certain federal revenue and public disclosure criteria are met.
- Prohibition on Contract Splitting
- Contractors may not split subcontracts to avoid reporting requirements.
- Exemptions
- Contractors and subcontractors with less than $300,000 in gross income in the previous tax year are exempt from reporting.
- Data Accuracy and Corrections
- Contractors must ensure the accuracy of information in SAM and FPDS, and correct errors as needed.
Responsibilities
- Contracting Officers: Ensure inclusion of this clause in applicable contracts and provide guidance on reporting requirements.
- Contractors: Report required executive compensation and subcontract award data, notify subcontractors of public disclosure, and maintain data accuracy.
- Agencies: Oversee compliance and address contractor-reported data discrepancies in FPDS.
Practical Implications
- This clause exists to increase transparency and accountability in federal contracting by making executive compensation and subcontract award data publicly available.
- Contractors must establish processes for timely and accurate reporting, and be aware of thresholds and exemptions to avoid noncompliance.
- Common pitfalls include missing deadlines, incomplete data, or failing to notify subcontractors about public disclosure.