Implementation of the Requirements of the FY2012 HHS Appropriations Acts And HHS Non-Discrimination Policy

Attachment A “Interim Updates to HHSAR” of APM 2012-03 “Implementation of the Requirements of the FY2012 HHS Appropriations Acts and HHS’ Non-Discrimination Policy” under the section entitled “Section 203 of the Labor, HHS and Education Appropriation Act - Revised HHSAR 352.231-70, Salary Rate Limitation” is hereby changed to replace the clause 352.231-70 “Salary Rate Limitation” in its entirety with the clause below.

The changes made were: 1) paragraph (a) of the clause has been replaced in its entirety to clarify the effective date of December 23, 2011 and its applicability to funding; 2) the word “Federal” in the “Note:” appearing in this clause has been replaced with the word “contract” to correspond with the language used in paragraph (a) of the clause; and 3) the date of the clause has been changed to “August 2012.”

352.231-70 Salary rate limitation.

    As prescribed in 331.101-70, the Contracting Officer shall insert the following clause in extramural solicitations and contracts:

SALARY RATE LIMITATION (AUGUST 2012)

   (a) Pursuant to the current and applicable prior HHS appropriations acts, the Contractor shall not use contract funds to pay the direct salary of an individual at a rate in excess of the Federal Executive Schedule Level in effect on the date the funding was obligated (the effective date of the contract action).  Funding obligated on or after December 23, 2011 cannot be used to pay the direct salary of an individual at a rate in excess of Federal Executive Schedule Level II.

    (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 [F&A] costs).

    Note:  The salary rate limitation does not restrict the salary that an organization may pay an individual working under an 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.  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 in effect when the expense is incurred regardless of the rate initially used to establish contract or order funding.

    (d) See the salaries and wages pay tables on the U.S. Office of Personnel Management Web site for Federal Executive Schedule salary levels that apply to the current and prior periods.

(End of clause)