Compensation Cap for 2019 and 2020

May 26, 2020

The compensation limit for government contractor employees, as established by Section 702 of the Bipartisan Budget Act of 2013 (BBA; Pub. L. 113-67, December 26, 2013), for the year ending December 31, 2020, is $555,000. 

The BBA charges the Office of Federal Procurement Policy (OFPP) with annually adjusting the cap. The adjustment is based on the change in the Employment Cost Index (ECI) for all workers as calculated by the Bureau of Labor Statistics (BLS). OFPP published the 2018 cap shortly after the end of the government’s 2017 fiscal year, but has not updated it for 2019 or 2020. Aronson has calculated it using the promulgated statistics, and got the scoop directly from a supervisor on DCAA’s Compensation Team that they are using the same calculated amounts in the table below:

The cap applies to contracts awarded after June 24, 2014. It caps the sum of any contractor employee’s allowable wages, salaries, bonuses, deferred compensation, and contributions to defined contribution pension plans per FAR 31.205-6(p).

If you have further questions about Executive Compensation or Incurred Cost Submissions, please contact Deirdre Bond, Donna Dominguez, or any of our government contracting specialists at 301.231.6200.