But these rates don't just apply to federal employees. They also represent caps on what the Government is willing to reimburse contractors for their travel costs charged to Government contracts. Not only are they limits on what the Government will reimburse contractors under cost-type contract but also represent limits on what the Government will consider when negotiating fixed-price contracts.
These limitations or caps are found in FAR (Federal Acquisition Regulations) 31.205-46, Travel:
... costs incurred for lodging, meals, and incidental expenses (as defined in the [Federal Travel Regulations] 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 ...Those same regulations also provide examples of extenuating circumstances when those rates may be exceeded.
The 2020 rates did not change significantly from the 2019 rates. The standard rate for lodging increased by $2 per night, from $94 to $96. The standard rate for meals and incidental expenses remains the same at $55. However, the standard rates are rarely used because most cities, therefore most locations where contractor employees will travel to, have higher rates. The lodging rate for Los Angeles, for instance will be $181 (up from $180 per night in 2019) and the lodging rate for Washington DC ranges from $169 to $256 per night, depending upon the month of travel.
Contractors need to prepare to implement the new rate schedule beginning October 1st. To view the new per diem rates, go to the GSA website.