Far-31.205-46

FAC 2005–06 OCTOBER 31, 2005
SUBPART 31.2—CONTRACTS WITH COMMERCIAL ORGANIZATIONS
(1) Costs of organizing, setting up, and sponsoring the
meetings, conventions, symposia, etc., including rental of
meeting facilities, transportation, subsistence, and incidental
costs;
(2) Costs of attendance by contractor employees,
including travel costs (see 31.205-46); and
(3) Costs of attendance by individuals who are not
employees of the contractor, provided—
(i) Such costs are not also reimbursed to the individual by the employing company or organization, and
(ii) The individuals attendance is essential to achieve
the purpose of the conference, meeting, convention, symposium, etc.
31.205-44 Training and education costs.
Costs of training and education that are related to the field
in which the employee is working or may reasonably be
expected to work are allowable, except as follows:
(a) Overtime compensation for training and education is
unallowable.
(b) The cost of salaries for attending undergraduate level
classes or part-time graduate level classes during working
hours is unallowable, except when unusual circumstances do
not permit attendance at such classes outside of regular working hours.
(c) Costs of tuition, fees, training materials and textbooks,
subsistence, salary, and any other payments in connection
with full-time graduate level education are unallowable for
any portion of the program that exceeds two school years or
the length of the degree program, whichever is less.
(d) Grants to educational or training institutions, including
the donation of facilities or other properties, scholarships, and
fellowships are considered contributions and are unallowable.
(e) Training or education costs for other than bona fide
employees are unallowable, except that the costs incurred for
educating employee dependents (primary and secondary level
studies) when the employee is working in a foreign country
where suitable public education is not available may be
included in overseas differential pay.
(f) Contractor contributions to college savings plans for
employee dependents are unallowable.
31.205-45 [Reserved]
31.205-46 Travel costs.
(a) Costs for transportation, lodging, meals, and incidental
expenses. (1) Costs incurred by contractor personnel on official company business are allowable, subject to the limitations
contained in this subsection. Costs for transportation may be
based on mileage rates, actual costs incurred, or on a combination thereof, provided the method used results in a reasonable charge. Costs for lodging, meals, and incidental expenses
may be based on per diem, actual expenses, or a combination

31.205-46

thereof, provided the method used results in a reasonable
charge.
(2) Except as provided in paragraph (a)(3) of this subsection, costs incurred for lodging, meals, and incidental
expenses (as defined in the regulations cited in (a)(2)(i)
through (iii) of this paragraph) shall be considered to be reasonable and allowable only to the extent that they do not
exceed on a daily basis the maximum per diem rates in effect
at the time of travel as set forth in the—
(i) Federal Travel Regulations, prescribed by the
General Services Administration, for travel in the contiguous
United States, available on a subscription basis from the—
Superintendent of Documents
U.S. Government Printing Office
Washington DC 20402
Stock No. 922-002-00000-2;

(ii) Joint Travel Regulation, Volume 2, DoD Civilian
Personnel, Appendix A, prescribed by the Department of
Defense, for travel in Alaska, Hawaii, and outlying areas of
the United States, available on a subscription basis from the—
Superintendent of Documents
U.S. Government Printing Office
Washington DC 20402
Stock No. 908-010-00000-1; or

(iii) Standardized Regulations (Government Civilians, Foreign Areas), Section 925, “Maximum Travel Per
Diem Allowances for Foreign Areas,” prescribed by the
Department of State, for travel in areas not covered in (a)(2)(i)
and (ii) of this paragraph, available on a subscription basis
from the—
Superintendent of Documents
U.S. Government Printing Office
Washington, DC 20402
Stock No. 744-008-00000-0.

(3) In special or unusual situations, actual costs in
excess of the above-referenced maximum per diem rates are
allowable provided that such amounts do not exceed the
higher amounts authorized for Federal civilian employees as
permitted in the regulations referenced in (a)(2)(i), (ii), or (iii)
of this subsection. For such higher amounts to be allowable,
all of the following conditions must be met:
(i) One of the conditions warranting approval of the
actual expense method, as set forth in the regulations referenced in paragraphs (a)(2)(i), (ii), or (iii) of this subsection,
must exist.
(ii) A written justification for use of the higher
amounts must be approved by an officer of the contractor’s
organization or designee to ensure that the authority is properly administered and controlled to prevent abuse.
31.2-25

31.205-47

FEDERAL ACQUISITION REGULATION

(iii) If it becomes necessary to exercise the authority
to use the higher actual expense method repetitively or on a
continuing basis in a particular area, the contractor must
obtain advance approval from the contracting officer.
(iv) Documentation to support actual costs incurred
shall be in accordance with the contractor’s established practices, subject to paragraph (a)(7) of this subsection, and provided that a receipt is required for each expenditure of $75.00
or more. The approved justification required by
paragraph (a)(3)(ii) and, if applicable, paragraph (a)(3)(iii) of
this subsection must be retained.
(4) Paragraphs (a)(2) and (a)(3) of this subsection do
not incorporate the regulations cited in subdivisions (a)(2)(i),
(ii), and (iii) of this subsection in their entirety. Only the maximum per diem rates, the definitions of lodging, meals, and
incidental expenses, and the regulatory coverage dealing with
special or unusual situations are incorporated herein.
(5) An advance agreement (see 31.109) with respect to
compliance with paragraphs (a)(2) and (a)(3) of this subsection may be useful and desirable.
(6) The maximum per diem rates referenced in
paragraph (a)(2) of this subsection generally would not constitute a reasonable daily charge—
(i) When no lodging costs are incurred; and/or
(ii) On partial travel days (e.g., day of departure and
return).
Appropriate downward adjustments from the maximum per
diem rates would normally be required under these circumstances. While these adjustments need not be calculated in
accordance with the Federal Travel Regulation or Joint Travel
Regulations, they must result in a reasonable charge.
(7) Costs shall be allowable only if the following information is documented—
(i) Date and place (city, town, or other similar designation) of the expenses;
(ii) Purpose of the trip; and
(iii) Name of person on trip and that person’s title or
relationship to the contractor.
(b) Airfare costs in excess of the lowest customary standard, coach, or equivalent airfare offered during normal business hours are unallowable except when such
accommodations require circuitous routing, require travel
during unreasonable hours, excessively prolong travel, result
in increased cost that would offset transportation savings, are
not reasonably adequate for the physical or medical needs of
the traveler, or are not reasonably available to meet mission
requirements. However, in order for airfare costs in excess of
the above standard airfare to be allowable, the applicable condition(s) set forth above must be documented and justified.
(c)(1) “Cost of travel by contractor-owned, -leased, or
-chartered aircraft,” as used in this paragraph, includes the
cost of lease, charter, operation (including personnel), maintenance, depreciation, insurance, and other related costs.
31.2-26

(FAC 2005–06)

(2) The costs of travel by contractor-owned, -leased, or
-chartered aircraft are limited to the standard airfare described
in paragraph (b) of this subsection for the flight destination
unless travel by such aircraft is specifically required by contract specification, term, or condition, or a higher amount is
approved by the contracting officer. A higher amount may be
agreed to when one or more of the circumstances for justifying
higher than standard airfare listed in paragraph (b) of this subsection are applicable, or when an advance agreement under
paragraph (c)(3) of this subsection has been executed. In all
cases, travel by contractor-owned, -leased, or -chartered aircraft must be fully documented and justified. For each contractor-owned, -leased, or -chartered aircraft used for any
business purpose which is charged or allocated, directly or
indirectly, to a Government contract, the contractor must
maintain and make available manifest/logs for all flights on
such company aircraft. As a minimum, the manifest/log shall
indicate—
(i) Date, time, and points of departure;
(ii) Destination, date, and time of arrival;
(iii) Name of each passenger and relationship to the
contractor;
(iv) Authorization for trip; and
(v) Purpose of trip.
(3) Where an advance agreement is proposed (see
31.109), consideration may be given to the following:
(i) Whether scheduled commercial airlines or other
suitable, less costly, travel facilities are available at reasonable
times, with reasonable frequency, and serve the required destinations conveniently.
(ii) Whether increased flexibility in scheduling
results in time savings and more effective use of personnel
that would outweigh additional travel costs.
(d) Costs of contractor-owned or -leased automobiles, as
used in this paragraph, include the costs of lease, operation
(including personnel), maintenance, depreciation, insurance,
etc. These costs are allowable, if reasonable, to the extent that
the automobiles are used for company business. That portion
of the cost of company-furnished automobiles that relates to
personal use by employees (including transportation to and
from work) is compensation for personal services and is unallowable as stated in 31.205-6(m)(2).
31.205-47 Costs related to legal and other proceedings.
(a) Definitions. As used in this subpart—
“Costs” include, but are not limited to, administrative and
clerical expenses; the costs of legal services, whether performed by in-house or private counsel; the costs of the services of accountants, consultants, or others retained by the
contractor to assist it; costs of employees, officers, and directors; and any similar costs incurred before, during, and after
commencement of a judicial or administrative proceeding
which bears a direct relationship to the proceeding.