[Federal Register: May 20, 1999 (Volume 64, Number 97)]
[Proposed Rules]
[Page 27653-27655]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20my99-18]
[[Page 27653]]
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Part IV
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Part 31
Federal Acquisition Regulations; Travel Costs; Proposed Rule
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 31
[FAR Case 94-753]
RIN 9000-AG27
Federal Acquisition Regulations; Travel Costs
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 to amend the Federal
Acquisition Regulation (FAR) to remove the limitation that costs
incurred by contractor personnel for lodging, meals, and incidental
expenses be considered reasonable and allowable only to the extent that
they do not exceed the maximum per diem rates set forth in the Federal
Travel Regulation (FTR), the Joint Travel Regulations (JTR), or the
Standardized Regulations (SR).
DATES: Comments should be submitted on or before July 19, 1999 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (MVR), Attn: Laurie
Duarte, 1800 F Street, NW, Room 4035, Washington, DC 20405.
E-mail comments submitted over Internet should be addressed to:
farcase.94-753@gsa.gov.
Please cite FAR case 94-753 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Ms. Linda Nelson, Procurement Analyst, at (202) 501-
1900. Please cite FAR case 94-753.
SUPPLEMENTARY INFORMATION:
A. Background
Section 24 of the Office of Federal Procurement Policy (OFPP) Act
(41 U.S.C. 420) previously required that travel costs incurred by
contractor personnel be considered reasonable and allowable only to the
extent that they did not exceed the maximum per diem rates for Federal
employees set by subchapter I of 5 U.S.C. 57, the Administrator of
General Services, or the President (or his designee). FAR 31.205-46,
Travel costs, implemented Section 24 of the OFPP Act by limiting
allowable contractor costs for lodging, meals, and incidental expenses
to the maximum per diem rates set forth in the FTR, JTR, or SR.
However, Section 2191 of the Federal Acquisition Streamlining Act
(FASA) of 1994 (Pub. L. 103-355) repealed Section 24 of the OFPP Act.
A proposed FAR rule was published in the Federal Register at 59 FR
64542, December 14, 1994. That rule proposed revising FAR 31.205-46(a)
to stipulate that the FTR, JTR, or SR rates should be used as a
baseline, but allowed contractors to propose alternative maximum per
diem rates, and contracting officers to approve the alternative rates
if certain conditions were met. Public comments were received from 63
sources. Based on a review of those public comments, the FASA Cost
Principles Team preliminarily decided to recommend withdrawal of the
proposed rule and retention of the current cost principle language at
FAR 31.205-46 without change.
The notice published in the Federal Register at 60 FR 27471, May
24, 1995, announced a public meeting, that was subsequently held on
June 14, 1995. The purpose of this meeting was to permit the public to
present its views concerning the recommendation to withdraw the
proposed rule. At the public meeting, industry representatives
expressed concern that contractors may be unable to obtain the
discounted lodging rates afforded to Government personnel, that the
current process was burdensome and costly to both contractors and the
Government, and that the standard should be revised to one of
reasonableness. Subsequent to the public meeting, the issue was
discussed at length but no agreement was reached on publication of a
final rule.
As a result of further analysis of this issue, the Civilian Agency
Acquisition Council and the Defense Acquisition Regulations Council are
now proposing a rule that differs significantly from the proposed rule
that was published on December 14, 1994. This second proposed rule
deletes in its entirety the per diem rate limitation at FAR 31.205-
46(a)(2) through (6).
The councils are proposing this change for a number of reasons.
First, GSA promulgates FTR per diem rates for the purpose of providing
sufficient allowance for Government travelers while on official
business for the Government. Section 24 of the OFPP Act applied the FTR
rates to reimburse Government contractor employees travel costs. Since
Section 2191 of FASA repealed Section 24 of the OFPP Act, it is no
longer necessary to apply rates designed for Government employee travel
to Government contractors. Generally, FTR rates appear to be lower than
the actual corporate rates available to contractors.
Second, it is anticipated that removal of the per diem limitation
will generate savings by reducing administrative costs for both
contractors and the Government. The Government expects the
administrative cost savings to lessen any increased costs resulting
from this rule change. For example, removal of the per diem rate
limitation will lead to a reduction of the Government's auditing and
contract administration effort. Another example of the administrative
cost savings is that contractors would no longer need to maintain two
travel systems--their own and the FTR/JTR/SR systems. Also, contractors
would no longer need to continuously monitor changes to the JTR, FTR,
and SR, and adjust their accounting systems accordingly.
The third reason for removing the per diem rate limitation is to
permit the Government to adopt an allowability standard that is more
consistent with the commercial marketplace. Many contractors already
have detailed travel reimbursement systems, rooted in commercially
generated survey data, to manage their costs.
However, there is some concern within the Government about the
potential for increased costs as a result of this proposed change.
Therefore, to help estimate the potential costs and benefits to the
Government, the councils invite respondents to provide the following
information together with their comments. Note that public comments
provided in response to this notice will be available in their entirety
to any requester, including any requester under the Freedom of
Information Act (5 U.S.C. 552). Therefore, we caution respondents not
to provide proprietary or other business sensitive information. Under
no circumstances should respondents provide any information unless they
do so with a clear understanding that it will be made available to the
public.
1. For industry respondents--
(a) Provide a description of how you will treat lodging, meals, and
incidental expenses if the councils eliminate the FTR/JTR/SR limits
(i.e., how will you ensure the costs charged to the
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Government are reasonable?) For example, does your policy address the
classes of hotels or the average costs of lodging in a city, etc.?
(Under no circumstances should respondents provide any information
unless they do so with a clear understanding that it will be made
available to the public.)
(b) Provide data on the percentage of total costs for lodging,
meals, and incidental expenses that were unallowable in the most recent
fiscal year. (Under no circumstances should respondents provide any
information unless they do so with a clear understanding that it will
be made available to the public.)
(c) That have both Government and commercial business, provide the
percentage differential in the average cost per day for lodging, meals,
and incidental expenses between the two types of business. If you had
charged the commercial business average cost per day to the Government,
by what percentage would the costs charged to the Government have
changed. (Under no circumstances should respondents provide any
information unless they do so with a clear understanding that it will
be made available to the public.)
(d) Identify the types of savings that would result for your firm
if the councils eliminate the FTR/JTR/SR limits. To what extent would
the savings offset any increased costs to the Government? (Under no
circumstances should respondents provide any information unless they do
so with a clear understanding that it will be made available to the
public.)
2. For Government respondents, identify the types and amounts of
costs, savings, advantages or disadvantages to your agency if the
councils eliminate the FTR/JTR/SR limits.
This regulatory action was not subject to Office of Management and
Budget review under Executive Order 12866, dated September 30, 1993,
and is not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
This proposed rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because most
contracts awarded to small entities use simplified acquisition
procedures or are awarded on a competitive, fixed-price basis, and do
not require application of the cost principle contained in this rule.
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 94-753), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FAR do not impose information collection requirements that 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: May 17, 1999.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
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).
31.205-6 [Amended]
2. Section 31.205-6 is amended in paragraph (m)(2) by revising the
reference ``(see 31.205-46(f))'' to read as ``(see 31.205-46(g))''.
31.205-46 [Amended]
3. Section 31.205-46 is amended in paragraph (a) by removing
paragraphs (a)(2) through (a)(6) and by redesignating paragraphs (a)(1)
as (a), (a)(7) as (b), and (b) through (f) as (c) through (g),
respectively; in the newly designated (a) by removing the paragraph
heading; and in the newly designated paragraph (f)(2) by revising
``paragraph (d)'' to read ``paragraph (e)'' both times it appears, and
``paragraph (e)(3)'' to read ``subparagraph (f)(3)''.
[FR Doc. 99-12739 Filed 5-19-99; 8:45 am]
BILLING CODE 6820-EP-P