Wednesday, April 10, 2013

Army, Navy, and Air Force Associations

The Association of the United States Army, Army Aviation Association of America, Navy League of the United States, Air Force Association, and other nonprofit associations with similar objectives have for many years offered memberships to Government contractors.

These associations are primarily concerned with fostering and preserving the images and efficiencies of the Army, Navy, and Air Force. They operate outside Government channels in an endeavor to preserve a spirit of fellowship among former and present Service members and to inform and arouse the interests of the public in activities and achievements of their respective military services.

Generally, memberships are offered to contractors that wish to support the objectives of these associations. The membership dues often include a subscription to publications issued periodically. For example, the Association of the United States Army publishes a monthly magazine entitled ARMY. In includes numerous articles primarily designed to enhance Army personnel programs and to promote manpower and combat readiness.

In addition, these organizations hold periodic conventions and meetings at which contractors frequently exhibit their products. Occasionally, these conventions or meetings will be sponsored by a contractor or group of contractors. These conventions or meetings are usually held to focus the attention of the public on the activities of a particular military service that contribute to national defense programs.

Sometimes, contractors have claimed costs associated with these organizations as allowable "Trade, Business, Technical, and Professional Activity Costs" as defined and discussed in FAR 31.205-43 because they consider these associations to be professional organizations. However, back in 1973, the ASBCA (Armed Services Board of Contract Appeals) ruled in an appeal by Boeing that membership dues paid to the Navy League, the Army Aviation Association of America, the Air Force Association and the Association of the U.S. Army were unallowable because the history of these organizations, their membership, their objectives and activities demonstrated that they are neither trade, business, technical or professional. Thus, Government auditors are certain to question such membership costs.

However, when these Army, Navy, and Air Force organizations hold conventions, conferences, and meetings where the principal purpose is the dissemination of trade, business, technical or professional information or the stimulation of production of improved productivity, costs of organizing, setting up, and sponsoring the gatherings, including rental of meeting facilities, transportation, subsistence, and incidental costs, are allowable.

The key to allowability is in documenting the purpose. If the gathering can be shown to be for dissemination of trade, business, technical, or professional information, contractors should not hesitate to claim the costs.


  • Membership fees - Unallowable
  • Cost related to conventions and conferences - Allowable when purpose meets FAR 31.205-43 criteria.

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