Friday, October 17, 2014

New Limitations on Reimbursing Travelers for "Incidental Expenses"

In yesterday's blog, we reported that the Department of Defense is proposing new limitations on per diem for continuous travel over 30 days and additional limitations on per diem for trips over 180 days. Although contractors might want to consider something like that in their own travel policies and procedures, they would not be bound by such a policy. FAR 31.205-46 provides otherwise.

After we published that article, we were alerted to a change that DoD has already made related to the reimbursement of "incidental expenses"  It became effective October 1st of this year. In this change, DoD has expanded the definition of "incidental expenses" to include other items that were previously reimbursed separately.
In an effort to simplify policy, align with industry practices, and reduce travel costs for the Department, the Incidental Expense policy in Appendix A of the Joint Travel Regulations (JTR) will be revised to expand the definition of incidental expenses to include various miscellaneous reimbursable expenses including CONUS laundry, baggage tips, and ATM fees. As of October 1, 2014, these expenses will now be covered under the incidental expense portion of per diem ... and will no longer be reimbursed as separate miscellaneous expenses.
So, does the new policy apply to Government contractors? Yes, it does but only for travel to Alaska, Hawaii, and outlying ares of the United States. We'll explain.

According to FAR 31.205-46(a)(2), Government contractors are limited to the per diem rates listed in the FTRs (Federal Travel Regulations) for travel in the continental United States, the JTRs (Joint Travel Regulations) for travel in Alaska, Hawaii, and the outlying areas of the United States, and the State Department's Standardized Regulations for foreign travel.

FAR 31.205-46(a)(4) states that contractors are not required to incorporate those regulations into their own travel policies and procedures, they are only required to incorporate "... the maximum per diem rates, the definitions of lodging, meals, and incidental expenses ...",

Already, the definitions of incidental expenses between the FTR and the JTR were different. You can read more about those differences here. Now, the definitions in the FTRs and the JTRs are diverging even further.

This new DoD policy affects only the JTRs at this point - that is travel to Alaska, Hawaii, and outlying ares of the United States. It does not affect travel within the continental United States. Contractors, to the extent their employees travel to Alaska and Hawaii, must take care to adhere to the new definition of "incidental expenses".

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