DoD Seal DoD 50 Year Seal

OFFICE OF THE SECRETARY OF DEFENSE

1000 DEFENSE PENTAGON
WASHINGTON, DC 20301-1000
December 13, 1996

 
ACQUISITION AND
 TECHNOLOGY

DP(DAR)

                                                          In reply refer to
                                                          DFARS Case: 96-D330
                                                          D. L. 96-023



MEMORANDUM FOR	DIRECTORS OF DEFENSE AGENCIES
                    DEPUTY FOR ACQUISITION AND BUSINESS MANAGEMENT,
                      ASN(RD&A)/ABM
                    DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE
                      (CONTRACTING), SAF/AQC
                    DIRECTOR, PROCUREMENT POLICY, ASA(RD&A)/SARD-PP
                    DEPUTY DIRECTOR (ACQUISITION), DEFENSE LOGISTICS
                      AGENCY



SUBJECT:    Individual Compensation



     We have amended Part 231 of the Defense Federal Acquisition Regulation
Supplement (DFARS) to implement Section 8071 of the National Defense
Appropriations Act for Fiscal Year 1997 (Pub. L. 104-208).  Section 8071
limits allowable costs for individual compensation to $250,000 per year.  This
restriction applies to DoD contracts when payments are from funds appropriated
in fiscal year 1997.


     This interim DFARS rule is effective immediately and will be
published in a future Defense Acquisition Circular.









                                                    /s/

                                             Eleanor R. Spector
                                             Director, Defense Procurement

Attachment

cc: DSMC, Ft. Belvoir

INDIVIDUAL COMPENSATION
DFARS Case 96-D330

PART 231 -- CONTRACT COST PRINCIPLES AND PROCEDURES

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SUBPART 231.2 -- CONTRACTS WITH COMMERCIAL ORGANIZATIONS

231.205 Selected costs.

231.205-6 Compensation for personal services.

(a)(2)(i)

[(A)] Costs for individual compensation in excess of $250,000 per year are unallowable under DoD contracts that are awarded after April 15, 1995, and are funded by fiscal year 1995 appropriations (Section 8117 of Pub. L. 103-335).

[(B)] Costs for individual compensatin in excess of $200,000 per year are unallowable under DoD contracts that are awarded after July 1, 1996, and are funded by fiscal year 1996 appropriations (Section 8086 of Pub. L. 104-61).

[(ii) Costs for individual compensation in excess of $250,000 per year are unallowable under new DoD contracts funded by fiscal year 1997 appropriations (Section 8071 of Pub. L. 104-208). For purposes of this limitation, the term "compensation" means -

(A) The total amount of taxable wages paid to the employee for the year concerned; plus

The total amount of elective deferred compensation earned by the employee in the year concerned.

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