Federal Acquisition Regulation; Business Meals

DEPARTMENT OF DEFENSE

48 CFR Part 31

[FAR Case 93-26]

RIN 9000-AG59

Federal Acquisition Regulation; Business Meals

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council are proposing changes to the Federal

Acquisition Regulation (FAR) to clarify when the costs of meals for

contractor employees are allowable. This regulatory action was not

subject to Office of Management and Budget review under Executive Order

12866, dated September 30, 1993.

DATES: Comments should be submitted on or before October 20, 1995, to

be considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (VRS), 18th & F

Streets, NW., room 4037, Washington, DC 20405.

Please cite FAR case 93-26 in all correspondence related to this

case.

FOR FURTHER INFORMATION CONTACT:

Jeremy F. Olson at (202) 501-3221 in reference to this FAR case. For

general information, contact the FAR Secretariat, room 4037, GS

Building, Washington, DC 20405 (202) 501-4755. Please cite FAR case 93-

26.

SUPPLEMENTARY INFORMATION:

A. Background

The Office of Federal Procurement Policy SWAT Team on Civilian

Agency Contracting in its report of December 3, 1992, entitled

``Improving Contracting

Practices and Management Controls on Cost-Type Federal Contracts,''

recommended several FAR changes which were viewed to have Government-

wide benefit. The purpose of the proposed revisions was to make the FAR

less general with regard to the allowability of certain costs.

One area identified for clarification is the costs of business

meals of contractor employees who are not on official travel. Audits

and reviews revealed that these costs were variously claimed as

allowable as employee morale costs, necessary to accomplish business,

or as a normal business expense.

FAR 31.205-43(c)(1) is amended to remove the word ``subsistence.''

The title of FAR 31.205-46 is revised to include business meals and a

new paragraph (g) is added to make it clear that the costs of meals for

contractor employees is unallowable unless the employee is on official

company travel or the meals are an integral part of a bona fide

business meeting as described in FAR 31.205-43(c).

B. Regulatory Flexibility Act

The proposed rule clarifies a condition of cost allowability for

contractors who wish to be reimbursed under Government contracts

subject to FAR Subpart 31.2. The Regulatory Flexibility Act, 5 U.S.C.

601, et seq., applies, but the rule is not expected to have a

significant economic impact on a substantial number of small entities

because most contracts awarded to small entities are awarded on a

competitive, fixed-price basis and the cost principles do not apply. An

Initial Regulatory Flexibility Analysis has, therefore, not been

performed. Comments from small entities concerning the affected FAR

subpart will be considered in accordance with 5 U.S.C. 610 of the Act.

Such comments must be submitted separately and should cite 5 U.S.C.

601, et seq. (FAR case 93-26), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the proposed

changes to the FAR do not impose recordkeeping or information

collection requirements, or collections of information from offerors,

contractors, or members of the public which require the approval of the

Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 31

Government procurement.

Dated: August 15, 1995.

C. Allen Olson,

Director, Office of Federal Acquisition Policy.

Therefore, it is proposed that 48 CFR Part 31 be amended as set

forth below:

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

1. The authority citation for 48 CFR Part 31 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

31.205-43 [Amended]

2. Section 31.205-43 is amended in paragraph (c)(1) by removing the

word ``subsistence,''.

3. Section 31.205-46 is amended by revising the section heading and

adding paragraph (g) to read as follows:

31.205-46 Travel costs and business meals.

* * * * *

(g) Costs of meals by contractor employees are unallowable unless--

(1) The employee is on official company travel; or

(2) The meals are an integral part of activities described under

31.205-43(c).

[FR Doc. 95-20613 Filed 8-18-95; 8:45 am]

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