[Federal Register: May 5, 2005 (Volume 70, Number 86)]
[Notices]               
[Page 23888-23889]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05my05-76]                         

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OFFICE OF MANAGEMENT AND BUDGET

Office of Federal Procurement Policy

 
Determination of Executive Compensation Benchmark Amount Pursuant 
to Section 39 of the Office of Federal Procurement Policy (OFPP) Act 
(41 U.S.C. 435), as Amended

AGENCY: Office of Federal Procurement Policy, OMB.

ACTION: Notice.

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SUMMARY: The Office of Management and Budget (OMB) is hereby publishing 
the attached memorandum to the heads of executive departments and 
agencies concerning the determination of the maximum ``benchmark'' 
compensation amount that will be allowable under government contracts 
during contractors' FY 2005--$473,318. This determination is required 
under Section 39 of the Office of Federal Procurement Policy (OFPP) Act 
(41 U.S.C. 435), as amended. The benchmark compensation amount applies 
equally to both defense and civilian procurement agencies.

FOR FURTHER INFORMATION CONTACT: Rein Abel, Office of Federal 
Procurement Policy, (202) 395-3254.

    David H. Safavian,
    Administrator.

Memorandum for the Heads of Executive Departments and Agencies
    Subject: Determination of Executive Compensation Benchmark Amount 
Pursuant to Section 39 of the Office of Federal Procurement Policy 
(OFPP) Act (41 U.S.C. 435), as amended.
    This memorandum sets forth the ``benchmark compensation amount'' as 
required by Section 39 of the Office of Federal Procurement Policy 
(OFPP) Act (41 U.S.C. 435), as amended. Under Section 39, the benchmark 
compensation amount is ``the median amount of the compensation provided 
for all senior executives of benchmark corporations for the most recent 
year for which data is available.'' The benchmark compensation amount 
established by Section 39 limits the allowability of compensation costs 
under government contracts. The benchmark compensation amount does not 
limit the compensation that an executive may otherwise receive. This 
amount is based on data from commercially available surveys of 
executive compensation that analyze the relevant data made available by 
the Securities and Exchange Commission. More specifically, as required 
by Section 39 of the OFPP Act, the data used is the median (50th 
percentile)

[[Page 23889]]

amount of compensation accrued over a recent 12 month period for the 
top five highest paid executives of public-traded companies with annual 
sales over $50 million. After consultation with the Director of the 
Defense Contract Audit Agency, we have determined pursuant to the 
requirements of Section 39 that the benchmark compensation amount for 
contractors' Fiscal Year 2005 is $473,318. This amount is for Fiscal 
Year 2005 and subsequent contractor fiscal years, unless and until 
revised by OMB. The benchmark compensation amount applies to contract 
costs incurred after January 1, 2005, under covered contracts of both 
the defense and civilian procurement agencies as specified in Section 
39 of the OFPP Act (41 U.S.C. 435), as amended.
    Questions concerning this memorandum may be addressed to Rein Abel, 
Office of Federal Procurement Policy, on (202) 395-3254.


David H. Safavian,
Administrator.
[FR Doc. 05-8950 Filed 5-4-05; 8:45 am]

BILLING CODE 6325-49-P