Again, this year our friendly DCAA auditors have taken up the government requirement to calculate and publish annually the new compensation cap as provided for in Section 702 of the Bipartisan Budget Act of 2013 (BBA; Pub. L. 113-67), dated December 26, 2013. The 2025 compensation cap amount is $671,000. Below we have provided the compensation caps going back to 2019.
It is important to understand that simply ensuring the compensation cap is not exceeded is only the start of your journey through the wonderful world of supporting your compensation to government auditors.
Compensation System
DCAA audits of your accounting system, incurred cost, and price proposals all have an expectation that the contractor be able to walk the auditor through its compensation system. As we discussed in our prior article “Why are Policies and Procedures so Important in Government Contracting?” DCAA believes any system without adequate policies and procedures is an inadequate system. Please refer to the additional articles below outlining the importance of this area.
- Compensation Planning and Analysis Especially Important to Government Contractors
- Why a Comprehensive Compensation Plan is Key to Driving Organizational Success
Yearly Caps
|
Cap Amount |
Fiscal Year |
For Costs Incurred |
|
$671,000 |
2025 |
1/1/2025 – 12/31/2025 |
|
$646,000 |
2024 |
1/1/2024 - 12/31/2024 |
|
$619,000 |
2023 |
1/1/2023 - 12/31/2023 |
|
$589,000 |
2022 |
1/1/2022 - 12/31/2022 |
|
$568,000 |
2021 |
1/1/2021 - 12/31/2021 |
|
$555,000 |
2020 |
1/1/2020 - 12/31/2020 |
|
$540,000 |
2019 |
1/1/2019 - 12/31/2019 |
Redstone GCI assists contractors throughout the U.S. and internationally with understanding the Government’s requirements and implementing an adequate compensation system including the necessary policies and procedures. We would be happy to be part of your team.
