[Federal Register Volume 60, Number 161 (Monday, August 21, 1995)]
[Proposed Rules]
[Pages 43508-43509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20613]



-----------------------------------------------------------------------


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.

-----------------------------------------------------------------------

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 

[[Page 43509]]
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]
BILLING CODE 6820-EP-M