We anticipate that the executive compensation limit for government contractors for the year ending December 31, 2019 will be $540,000. Section 702 of the Bipartisan Budget Act of 2013 (BBA) established a compensation cap on all government contractor personnel.
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 does not appear to have updated for 2019. Have no fears; we calculated it using the promulgated statistics in the table below:
The cap applies to contracts awarded after June 24, 2014. It caps the sum of any contractor employee’s wages, salaries, bonuses, deferred compensation, and contributions to defined benefit pension plans.