B-196005 L/M, NOV 18, 1980

B-196005 L/M, NOV 18, 1980

OFFICE OF GENERAL COUNSEL

JAMES T. BRANNAN, OFFICE OF THE UNDER SECRETARY OF DEFENSE FOR RESEARCH AND ENGINEERING:

YOU REQUESTED OUR COMMENTS ON A REVISION TO DEFENSE ACQUISITION REGULATION (DAR) SEC. 15-205.6, COMPENSATION FOR PERSONAL SERVICES.

THE REVISION ADDS COVERAGE ON DIFFERENT TYPES OF COMPENSATION, PARTICULARLY IN THE AREA OF PENSION COSTS AND OTHER FORMS OF DEFERRED COMPENSATION. THE REVISION ALSO CHANGES THE GENERAL CRITERIA WHICH MUST BE MET FOR COMPENSATION TO BE ALLOWABLE. THE REVISION FURTHER ELIMINATES THE PROVISIONS WHICH LIMITED TOTAL COMPENSATION COST ALLOWABLE TO THE AMOUNT DEDUCTIBLE UNDER THE INTERNAL REVENUE CODE EXCEPT FOR CLOSELY HELD CORPORATIONS AND PARTNERSHIPS AND INCLUDES COVERAGE ON SEVERANCE PAY PREVIOUSLY CONTAINED IN DAR SEC. 15-205.39.

WE HAVE NO COMMENTS TO OFFER.