Content created by Assistant Secretary for Financial Resources (ASFR)
Effective Date: 02/07/2026
HHSAR Text Baseline is 48 CFR Chapter 3 as of November 25, 2025
Changes to baseline shown as [bolded, bracketed additions] and strikethrough deletions.
For HHSAR part 352, only the provisions and clauses associated with part 331 are shown.
HHSAR PART 331—CONTRACT COST PRINCIPLES AND PROCEDURES [(RFO DEVIATION)]
Subpart 331.1—Applicability
331.101-70[170] Salary rate limitation.
Subpart 331.1—Applicability
331.101-70[170] Salary rate limitation.
(a) Beginning in fiscal year 1990, Congress has stipulated[Public Law 112-74, Consolidated Appropriations Act, 2012, and Pub. L. 112-55, Consolidated and Further Continuing Appropriations Act, 2012, stipulates] in the Department of Health and Human Services appropriations acts and continuing resolutions that, under applicable contracts, appropriated funds cannot be used to pay the direct salary of an individual above the stipulated rates. The applicable rates for each year are identified at www.opm.gov.
[(b) Appropriated funds shall not be used to pay the direct salary of an individual above the rates of basic pay for the Executive Schedule (EX), Level II on Department of Health and Human Services contracts pursuant to Pub. L. 118-47, Further Consolidated Appropriations Act, 2024. The annual applicable rates are identified in the salary table on the Office of Personnel Management website at www.opm.gov.]
(b)[(c)] The contracting officer shall[must] insert the clause at 352.231-70, Salary Rate Limitation, in solicitations and contracts when [using] a cost-reimbursement; fixed-price level-of-effort; time-and-materials; or labor-hour contract is contemplated.
HHSAR PART 352—SOLICITATION PROVISIONS AND CONTRACT CLAUSES [(RFO DEVIATION)]
Subpart 352.2—Texts of Provisions and Clauses
352.231-70 Salary Rate Limitation.
Subpart 352.2—Texts of Provisions and Clauses
352.231-70 Salary Rate Limitation.
As prescribed in HHSAR 331.101-70(b)[331.170(c)], the Contracting Officer shall insert the following clause:
SALARY RATE LIMITATION (DEC 2015)[(FEB 2026) (RFO DEVIATION)]
(a) The Contractor shall[must] not use contract funds to pay the direct salary of an individual at a rate in excess of the Federal Executive Schedule Level II in effect on the date the funding was obligated.
(b) For purposes of the salary rate limitation, the terms “direct salary,” “salary,” and “institutional base salary,” have the same meaning and are collectively referred to as “direct salary,” in this clause. An individual's direct salary is the annual compensation that the Contractor pays for an individual's direct effort (costs) under the contract. Direct salary excludes any income that an individual may be permitted to earn outside of duties to the Contractor. Direct salary also excludes fringe benefits, overhead, and general and administrative expenses (also referred to as indirect costs or facilities and administrative costs). The salary rate limitation does not restrict the salary that an organization may pay an individual working under a Department of Health and Human Services [(HHS)] contract or order; it merely limits the portion of that salary that may be paid with contract funds.
(c) The salary rate limitation also applies to individuals under subcontracts.
(d) If this is a multiple-year contract or order, it may be subject to unilateral modification by the Contracting Officer to ensure that an individual is not paid at a rate that exceeds the salary rate limitation provision established in the HHS appropriations act used to fund this contract.
(e) See the salaries and wages pay tables on the Office of Personnel Management Web site[website] for Federal Executive Schedule [(EX)] salary levels [at www.opm.gov].
[(f) The Contractor must insert the substance of this clause, including this paragraph (f), in all subcontracts.]
(End of clause)