An interim rule was issued that brings many of the reporting requirements first made public in the American Recovery and Reinvestment Act to the broader scope of federal contracting. The rule calls for reporting executive compensation and first-tier subcontract awards if the prime contractor and its subcontractors meet certain thresholds. It is based on the same point of law, the amended Federal Funding Accountability and Transparency Act of 2006 (a product of then-Senator Obama and Senator Tom Coburn [R-Okla.]).

Under this rule, a prime contractor is required to report for disclosure on www.usaspending.gov the names and compensation of their five most highly compensated officers if in the preceding year the contractor received $25 million or more in revenues from federal contracts and subcontracts and 80 percent or more of its annual gross revenues from federal contracts and it does not already file this information with the SEC. All three must be satisfied to trigger the compensation reporting. The prime contractor is also required to collect and report this compensation information for its first-tier subcontractors if the subcontractor meets the three triggers and the subcontract is for $25 thousand or more.

The prime contractor is also required to report to the system every subcontract if the prime contract is $25 thousand or greater. This requirement is phased in however, as follows:

1. Until September 30, 2010, any newly awarded subcontract must be awarded if the prime contract award amount was $20 million or more.
2. From October 1, 2010 until February 28, 2011 any newly awarded subcontract must be reported if the prime contract award was $550 thousand or more.
3. Starting March 1, 2011, any newly awarded subcontract must be reported if the prime contract award amount was $25 thousand or more.

This is an interim rule, and as such it became effective upon publication and will operate unless and until a final rule is enacted. User guides, FAQs, and an online demonstration are available at the Federal Subaward Reporting System website, www.fsrs.gov. AGC will submit comments on the interim rule before the September 7 deadline.

For more information, or to contribute to the comments, contact Marco Giamberardino at giamberm@agc.org or (703) 837-5325; or Scott Berry at berrys@agc.org or (703) 837-5368.

AGC submitted comments this week on an advance notice of proposed rulemaking (ANPR) issued May 13, titled Enhancing Contract Transparency. The rule presupposes that, given the direction the administration is moving with the president's Freedom of Information Act (FOIA) memo, Transparency and Open Government memo, andOpen Government Initiative, as well as the Attorney General's new FOIA Guidelines and the Office of Science and Technology Policy's Open Government Plan, a requirement is likely forthcoming to post the text of contracts, task orders, and delivery orders online.

In order to best be able to execute this future requirement, the rule asks for public comment concerning how best to implement a system of posting these documents online. AGC was pleased that the ANPR was concerned with facilitating the posting without violating statutory and regulatory prohibitions against disclosing protected information (belonging to either contractors or the government), but had serious reservations with the ANPR's conclusion that it may not be practical to apply full FOIA procedures in every case.

AGC requested in its comments that FOIA procedures for protection of information be applied as the minimum standard of protection for disclosure of any text of the documents. AGC also provided a non-exhaustive list of information that the construction contracting community expected to be protected (and the accompanying regulatory citations that guaranteed their protection). AGC will continue to monitor the progression of this rule and fight to protect against the disclosure of sensitive and important contractor information.

For more information, contact Scott Berry at berrys@agc.org or (703) 837-5368.