NIH/USAID Contractors Feel the Impact of Contractor Employee Salary Caps

April 16, 2012

The National Institutes of Health has lowered the salary cap for government contractor employees from $199,700 to $179,700 for contracts issued after December 22, 2011.  This is affecting more and more contractors since employees working on NIH contracts are frequently highly paid scientists and physicians.  USAID also has salary caps that apply to contractor employees.

Contractors affected by salary caps must put procedures in place to make sure that they do not bill the government in excess of the salary caps.  This is especially important on

cost plus contracts where employees’ actual salary expense is billed to the government.

If you use Deltek Costpoint accounting software, you can automate the calculation of salary caps on cost plus projects.  If you use Deltek GCS Premier accounting software, you will need to make manual adjustments to timesheet records in order to handle salary caps.

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