96-014

 
ACQUISITION AND
 TECHNOLOGY

DP(DAR)

                                                                  In reply refer to
                                                                  DFARS Case: 96-D314 
                                                                  D. L. 96-014



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 8086 of the FY 1996 Defense Appropriations
Act (Pub.. L. 104-61).  Section 8086 limits allowable costs for individual
compensation to $200,000 per year.  This restriction applies to payments using
funds appropriated in fiscal year 1996 under contracts awarded after July 1, 1996.

      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

PART 231 -- CONTRACT COST PRINCIPLES AND PROCEDURES

* * * * *

SUBPART 231.2 -- CONTRACTS WITH COMMERCIAL ORGANIZATIONS

* * * * *

231.205 Seclected Costs.

* * * * *

231.205-6 Compensation for personal services.

(a) (2)

[(i)] Costs for individual compensation is excess of $250,000 per year are unallowable under DoD contracts that are awarded after April 15, 19995, and are funded by fiscal year 1995 appropriations ([Section 8117 of ] Public Law 103-335).

[(ii) Costs for individual compensation is 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 Public Law 104-61).]

* * * * *

SUBPART 231.3 -- CONTRACTS WITH EDUCATIONAL INSTITUTIONS

231.303 Requirements.

* * * * *

(3) The limitations[s] on allowable individual compensation at 231.205-6(a)(2)[(i) and (ii)] also appl[y] to this subpart.

SUBPART 231.6 -- CONTRACTS WITH STATE, LOCAL, AND FEDERALLY RECOGNIZED INDIAN TRIBAL GOVERNMENTS

231.603 Requirements. The limitation[s] on allowable individual compensation at 231.205-6 (a) (2) [(i) and (ii)] also appl[y] to this subpart.

SUBPART 231.7 -- CONTRACTS WITH NONPROFIT ORGANIZATIONS

231.703 Requirements.
The limitation[s] on allowable individual compensation at 231.205-6 (a) (2) [(i) and (ii)] also appl[y] to this subpart.