February 7, 2024
AGENCY FOR HEALTHCARE RESEARCH & QUALITY (AHRQ)
This Notice provides information regarding the salary limitation for AHRQ grant and cooperative agreement awards and extramural research and development contract awards.
Since 1990, Congress has legislatively mandated a limitation on direct salary for individuals under AHRQ grant and cooperative agreement awards (referred to here as a grant) and contract awards. The mandate appears in the annual appropriation act that provides authority for AHRQ to incur obligations for a given Fiscal Year (FY). At this time, AHRQ has not received an FY 2024 appropriation and is operating under a Continuing Resolution, the "Further Continuing Appropriations and Other Extensions Act, 2024 (Public Law 118-22), that applies the terms and conditions of the Consolidated Appropriations Act, 2023.
The Consolidated Appropriations Act, 2023 restricts the amount of direct salary to Executive Level II of the Federal Executive pay scale. The Office of Personnel Management recently released new salary levels for the Executive Pay Scale. Effective January 1, 2024, the salary limitation for Executive Level II is $221,900.
Committed levels of funding for grant and contract awards made in prior fiscal years that were restricted to Executive Level II will NOT be adjusted for the new salary cap rate. However, if adequate funds are available in the award, and if the FY2024 salary cap limitation is consistent with the institutional base salary, grantees may re-budget funds to accommodate the FY2024 salary cap, and cost reimbursement contractors may invoice at the higher rate, effective January 1, 2024. It is expected that such re-budgeting will not negatively impact the aims of the project. No additional funds will be provided for grant awards. Total estimated costs of contracts will not be modified.
Applicants for AHRQ grants and offerors for AHRQ contracts are reminded to reflect in their applications/proposals the actual institutional base salary of each individual for whom salary support is requested. In lieu of actual institutional base salary, applicants may elect to include an explanation indicating that the actual institutional base salary exceeds the current salary limitation. When such an indication is included in the application/proposal, AHRQ staff may contact the applicant to determine what the actual institutional base salary is and, if appropriate, make necessary adjustments to requested salaries prior to award. Many AHRQ awards have total cost caps; these total cost caps will not be increased to accommodate the increase in the salary cap.
AHRQ competing grants and cooperative agreements and contracts, grant applications, and contract proposals that request direct salaries for individuals in excess of the applicable RATE of $221,900 per year (or $106.68 per hour for a full-time appointment of 2080 hours per year) will be adjusted in accordance with the Executive Level II salary limitation, and will include notification of this adjustment. Adjustments will be made in the current and all future years; no funds will be awarded, committed, or disbursed in excess of the salary cap limitation.
The salary limitation also applies to all subawards and subcontracts.
The salary limitation does not apply to consultants, but consultant payments must meet the test of reasonableness and be consistent with institutional policy for rates paid to consultants, regardless of funding source.
An individual's institutional base salary is not constrained by the legislative provision for a limitation of salary. The rate limitation simply limits the amount that may be awarded and charged to AHRQ grants, cooperative agreements, and contracts. For individuals whose salary rates are in excess of Executive Level II, the grantee/contractor may pay the excess from non-federal funds.