Since 2006, the Federal Funding Accountability and Transparency Act (FFATA) has required many federal prime contractors and grant recipients to disclose executive compensation data and provide information to the government on subcontracts and purchase orders issued under a contract. The FFATA’s intended outcome is to provide everyone, from the general public to Congress, with a transparent view of where federal tax dollars are spent.
This article serves as an FFATA refresher and provides further insight for government contractors and grant recipients navigating compliance for subaward and executive compensation reporting.
Overview of FFATA Reporting Requirements
The Defense Contract Management Agency (DCMA) reviews FFATA reporting as part of the contractor purchasing system review (CPSR). DCMA repeatedly identifies contractors’ failure to comply with FFATA reporting as a common deficiency during annual CPSRs. To that end, not every contractor or grant recipient is required to provide data within FFATA.
Thus, companies must understand who is required to provide executive compensation and subcontract award data, the key elements of FFATA compliance, what data can be seen by the public, and which systems provide data transparency.
FFATA Reporting Threshold
Generally, a federal contract or grant requires FFATA reporting through a clause or applicable regulation. Prime contractors should expect to see Federal Acquisition Regulation (FAR) 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards,1 and grant recipients should see reference to Appendix A to Part 170, Title 2 – Award Term I, Reporting Subawards and Executive Compensation,” ecfr.gov, October 1, 2024.2 The presence of either of these references in an award directs the awardee/recipient to take action unless their gross income or their subcontractor’s/subrecipient’s gross income for the previous tax year was under $300,000.
The implementing regulations of the FFATA include two reporting requirements:
- Subcontract or subaward obligation reporting, and
- Executive compensation reporting.
The first requirement, subcontract reporting (also referred to as subaward reporting), is performed by the prime entity in the FFATA Subaward Reporting System (FSRS.gov) for every award of $30,000 or more.
FFATA Subaward Reporting Requirements
The reporting timeline and the data provided are key to compliance, as reporting must occur no later than the end of the month following the award. FSRS entries include data such as the business name, subaward number, amount and date of the award, and a requirement description. This data is linked to the prime contract/grant information previously entered in the Federal Procurement Data System (FPDS) by the government.
The linked data circles back to the original purpose of the FFATA; the results of data collection and reporting efforts are visible to all when logging into usaspending.gov. This visibility is unique, as most reporting requirements are stored in an agency database with limited access or viewing opportunities.
Recently the General Services Administration (GSA) announced that FSRS will be decommissioned in the spring of 2025, and reporting will move to SAM.gov. The switch should offer improved data integrity and a better user experience. Companies should note this upcoming change and plan accordingly for their reporting purposes.
Executive Compensation Reporting Requirements
The second component of FFATA is disclosing and reporting executive compensation for the five most highly compensated executives of the prime contractor and subrecipient. This is not a blanket requirement for all awards. In fact, an entity may be exempt from disclosing and reporting executive compensation if certain parameters are met. They include the following3 :
- For the entity’s previous fiscal year:
- less than 80% of its annual gross revenue was federally funded; and
- less than $25 million of its annual gross revenue was federally funded; or
- The public already has access to the compensation information (possibly through SEC filings).
Fortunately, when a subcontractor has previously registered on SAM.gov and provided their executive’s compensation data the contractor does not need to manually collect and report this data since there is an effective data connection already in the system.
What Happens to This Data?
Even if you venture into the USAspending.gov website purely out of curiosity, it is a practical and helpful resource to bookmark for viewing government spending information. The site was built in response to the Digital Accountability and Transparency Act of 2014 (DATA Act), which implemented a government-wide solution for financial data standards and reporting and provided transparency and accountability for more than 100 federal agencies’ financial data. This data is easily accessible and grouped into searchable categories on the site. Whether you are interested in COVID-19 and infrastructure spending data, agency spending and award profiles by fiscal year, or prime award and subaward information, a quick search can provide abundant data in an attractive and usable format.
Where Can I See the Results?
This article is an illustration of where the impact of a reporting requirement for federal prime contractors and grant recipients can be seen by anyone who is curious enough to look. Understanding and preparing for FFATA requirements can help reporting go smoother for all involved.
First, review the regulatory requirements included in your prime contract or grant. If the FFATA reporting requirement is present, take a moment to see if your company (or industry partner) is complying with FFATA by searching USAspending.gov for the entity name, drilling down to the listed contracts or grants, then exploring further for listed subawards. If the company has obligated federal funding to a subrecipient, then you should be able to see evidence of those subawards in the system (unless exemptions apply).
By taking these steps, you can see when companies have reported their subawards and, in turn, see the transparency of the obligation and outlay of appropriated funds (tax dollars) required by the FFATA and the DATA Act.
Conclusion: Remain Aware of FFATA Reporting Requirements
Monitor your federally funded prime contracts and grants to stay ready for obligatory reporting of executive compensation and subawards. Being prepared can help you avoid CPSR deficiencies, increased oversight, and potential difficulties with winning future awards.
For more information on federal funding and reporting awards, please reach out to a professional at Forvis Mazars.
- 1“FAR 52.204-10 Reporting Executive Compensation and First-Tier Subcontract Awards,” ecfr.gov, June 2020.
- 2“Appendix A to Part 170, Title 2 – Award Term I, Reporting Subawards and Executive Compensation,” ecfr.gov, October 1, 2024.
- 3“FAR 52.204-10(d)(3) Reporting Executive Compensation and First-Tier Subcontract Awards,” ecfr.gov, June 2020.