I found this old thread and, since it didn't seem any conclusions were previously reached, wanted to see if anyone has had any more experience or more clear guidance on this topic. I am wondering about the proper application of this clause on either FFP, T&M, or CR contracts and how folks have administered it internally or how it's been enforced by COs. For instance, staff that make $200k plus and still charge to contracts.
I used to think this was fairly straightforward but now I'm not so sure. The guidance on the HHS site is clear as mud http://www.hhs.gov/asfr/ogapa/acquisition/salary-rate-limitation-qa.html
As an example, what if someone makes, say, $500k per year. At the end of the year, this person charges 1,200 hours to OH, takes 600 hours of PTO, and another 600 of direct labor to a federal contract (roughly $144k). In this scenario, the portion of their (direct) salary paid with federal funds would be less than the Executive Salary Rate limitation. Also, how do you determine what portion of a person's salary was paid with federal funds in this scenario on a FFP contract?