Is Interviewing Someone at a Restaurant Allowable Recruitment Costs?

We previously discussed the FAR 31.205-34 cost principle concerning recruitment costs. Click here to read that posting. In brief, the cost principle allows six categories of recruitment costs; help-wanted advertising, employment office, operating an aptitude and educational testing program, travel costs of employees engaged in recruiting, travel costs of applicants for interviews, and cost for employment agencies (not in excess of standard commercial rates).

Back in 2011, the ASBCA (Armed Services Board of Contract Appeals) considered whether the cost of meals to discuss recruiting with professional colleagues is allowable. A Government contractor had claimed such costs, the contract auditor questioned them as not meeting the criteria of the FAR cost principle, and the contracting officer upheld the auditors position. The contractor then appealed to the ASBCA.

The contractor's argument focused on two of the six enumerated allowable costs; travel costs of employees engaged in recruiting personnel, and travel costs of applicants for interviews. The Board noted that these two categories, by their terms, are linked to the travel cost principle, which allows costs incurred for lodging, meals, and incidental expenses only to the extent that they do not exceed the maximum per diem rates set forth in Government regulations and those regulations only authorize per diem payments for travel of more than 12 hours. These luncheons and dinners did not meet the 12-hour travel criteria so the Board denied the appeal.

So, if your planning on conducting interviews of prospective employees over a lunch or dinner, do not expect that the cost of those meals will be allowable under Government contracts.