[Federal Register: March 27, 2007 (Volume 72, Number 58)]
[Notices]               
[Page 14300]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27mr07-71]                         

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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.

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 2007--$597,912. 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: Laura Auletta, Office of Federal 
Procurement Policy, on (202) 395-3256.

Paul A. Denett,
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) amount 
of compensation accrued over a recent 12 month period for the top 
five highest paid executives of publicly 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 2007 is $597,912. This amount is 
for Fiscal Year 2007 and subsequent contractor fiscal years, unless 
and until revised by OFPP. The benchmark compensation amount applies 
to contract costs incurred after January 1, 2007, 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 Laura 
Auletta, Office of Federal Procurement Policy, at (202) 395-3256.
    Paul A. Denett, Administrator.
 [FR Doc. E7-5573 Filed 3-26-07; 8:45 am]

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