Rule Raises Concerns About Adverse Competitive Impact on Small Firms that Contract with the Government

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On July 27, 2012, a final rule amending FAR 2.01, 52.204-7, and 52.204-10 was published, requiring contractors to report executive compensation and first tier subcontractor awards for contracts of $25,000 or more. The rule has raised concerns regarding a possible adverse competitive impact on small firms that contract with the government. A July 2010 interim rule also required this reporting on subcontracts over $25,000. The final rule preserves most of the July 2010 interim rule, with additional revisions to the Transparency Act reporting requirements in FAR.

The final rule, which is effective August 27, 2012, implements a section of the Federal Funding Accountability and Transparency Act of 2006, as amended by the Government Funding Transparency Act of 2008. The latter Act requires the Office of Management and Budget to establish a free, public website containing full disclosure of all Federal contract award information (www.usaspending.gov).

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