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Compensation Caps Rule Finalized

Nov.02.2016

On September 30, 2016, a more than two-year-old interim rule on the allowable cost limits of contractor and subcontractor employee compensation became final. Under this rule, which "applies to costs incurred on contracts award on or after June 24, 2014," compensation costs are capped at $487,000 (adjusted annually in accordance with the Employment Cost Index), though agencies may establish narrow exceptions for "scientists, engineers, or other specialists."

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Terry L. Albertson
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Partner – Washington, D.C.
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