Thursday, April 14, 2011

Private Schooling for Contractor Employee Dependents Overseas

There are a lot of contracting opportunities requiring deployment of contracting personnel to overseas locations. Often these positions are specifically designated as unaccompanied tours meaning that the employees may not bring family members (e.g. Iraq and Afghanistan). However, there are other locations where contractor employees commonly bring family members along (e.g. Germany, Japan, and Korea).

When considering overseas employment, the question of education for under aged dependents invariably arises. Will the Government reimburse contractors for the cost of private schools in an overseas location?

The answer is "maybe". FAR 31.205-44(e) provides that:
"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."

Therefore, under certain circumstances, the cost of private education is reimbursable. However, we recommend that contractors faced with this situation, enter into an advanced agreement with the contracting officer as provided for in FAR 31.109. This might preclude arguments later on as to whether available public education is "suitable" or not.

Of course, the cost must also meet all of the other allowability tests in FAR 31.201-2(a)(1)-(4);
  • Reasonable
  • Allocable
  • GAAP and CAS compliant
  • Terms of the contract



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