Thursday, July 27, 2017

Travel Costs in Excess of Federal Travel Regulation Maximums

We are in the process of bringing you synopses of a recent ASBCA decision that decided a number of issues related to DCAA's (Defense Contract Audit Agency) audit of Technology Systems, Inc (TSI) fiscal year 2007 incurred costs, the ACO's subsequent sustention of the DCAA findings and recommendations, and TCI's appeal of the ACO's decision before the ASBCA. Yesterday we discussed the issue of capitalization versus expensing costs. Bottom line on that one is you can't use IRS regulations to justify your capitalization and depreciation practices. Today we will look at TCI's claim for travel expenses that exceeded the JTR (Joint Travel Regulations) maximums for lodging and per diem.

We will be spending the next few days discussing an ASBCA decision involving incurred costs at Technology Systems, Inc. (TSI). DCAA issued a report on incurred cost for fiscal year 2007 noting a number of unallowable costs. The ACO (Administrative Contracting Officer) sustained many of the DCAA findings, issued a final decision, whereupon TCI appealed to the ASBCA.

TSI claimed travel costs in excess of the JTR ceilings for lodging and per diem expenses. There was no dispute on that fact and the ASBCA stated that TSI provided no good reason why the cost should not be challenged. Nevertheless, TSI came up with two arguments as to why this should not matter.

First, TSI argued that the ACO wrongly identified the applicable travel regulations. The ACO referenced the JTR which applies to travel outside of the Continental United States, instead of the FTR, which was truly applicable since all of the challenged travel was within the Continental United States. Second, TSI argue that its general travel policy saved the Government money.

The ASBCA called both arguments unpersuasive. Concerning the FTR/JTR argument, the Board called it a defect of form rather than substance. Concerning the argument that its travel policies saved the Government money, the Board rule it undeveloped and would not excuse it from compliance with travel regulation limits on per diem in any event.

TSI's arguments are rather silly and should never have risen to the ASBCA level.

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