ExitStrategy

ji- All makes sense to me. Thank you for the clarity! Exit Makes sense to me.

Seems like an age old question but was unable to find anything specific on these similar topics archives or otherwise: 1) If a government contract requires a contractor employee to obtain a specific clearance to perform work, and the clearance process requires specific "during work" actions (e.g. full-scope poly), is the time to perform said action an allowable cost (either indirect or direct)? Presume employee works on only one contract (for now). 2) Further, is time spent by employee to complete paperwork (or e-QIP for example) in pursuit of obtaining a required clearance allowable or is there an expectation that this type of activity is to be performed during non-work hours? 3) Likewise, requirements to complete EOD is considered allowable? Could it be considered a direct charge to the contract? Cumbersome in that in some instances, these tasks may be required during a "precontract" phase. Thinking I am far from the first to encounter such issues. Thank you

H2H and Retread, Interesting point of view. I'll take it under advisement and look at the relo potential. Thanks again all for weighing in. valuable insight. ES

Retread, A good summation of the salient points and I agree with the notion of reasonableness citing " cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person in the conduct of competitive business ". Pertaining to 31.201-3, employee has unique skill set and was hired to work on this contract and has only worked on this contract. Presumably, should travel reimbursement be discontinued, it would be a significant impact to employee and might result in employee seeking employment elsewhere (speculation). However, to H2H's point, I still am concerned with the IRS perspective. Although the IRS language addresses the issue of "deductibility", is not the potential issue whether the employees reimbursement should be considered taxable income (which it has not). That determination in part relies upon whether employee's "movement" from point A (residence) to Point B ("mostly" work station) is travel or commute. If it is commute, is it a legit contract expense? Seems not. Found IRS language as follows: Topic 511 - Business Travel Expenses Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals or lodging in Milwaukee because that is your tax home. Your travel on weekends to your family home in Chicago is not for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located. In determining your main place of business, take into account the length of time you normally need to spend at each location for business purposes, the degree of business activity in each area, and the relative significance of the financial return from each area. However, the most important consideration is the length of time you spend at each location. You can deduct travel expenses paid or incurred in connection with a temporary work assignment away from home. However, you cannot deduct travel expenses paid in connection with an indefinite work assignment. Any work assignment in excess of one year is considered indefinite. Also, you may not deduct travel expenses at a work location if you realistically expect that you will work there for more than one year, whether or not you actually work there that long.

So, thoughtful dialogue occurring here in this post and thanks to all who have contributed. I think there can be debate on whether contractor's policies have been followed or not. Interesting side note, contractor (previously referred to as client) is debating whether a change in policy is warranted given language that "use of JTR is NOT appropriate" by contractors (see response to question 3 at https://www.defensetravel.dod.mil/site/faqctr.cfm) To me, regardless of the regulation applied, the question comes to the application and/or definition of PDS (and therefore TDY). I have researched the JTR and FTR and find no clear threshold for determination of PDS (such as greater than 50% of work time). Under definitions of PDS for Civilian Employees in JTR, there is, "The employee/invitational traveler's permanent work assignment location. For the purpose of determining PCS travel allowances, a PDS is the building or other place (base, military post, or activity) where an employee regularly reports for duty." Looking for other resources where PDS might be defined, I have found the FTR's use of "Official Duty Station" which is, "An area defined by the agency that includes the location where the employee regularly performs his or her duties or an invitational traveler’s home or regular place of business (see 301-1.2). The area may be a mileage radius around a particular point, a geographic boundary, or any other definite domain, provided no part of the area is more than 50 miles from where the employee regularly performs his or her duties or from an invitational traveler’s home or regular place of business. If the employee’s work involves recurring travel or varies on a recurring basis, the location where the work activities of the employee’s position of record are based is considered the regular place of work." Continuing down the rabbit hole, I then looked to the IRS (which brings into question commuting cost reimbursed to be declared as taxable income) which uses the term "Tax Home" defined as, “your regular place of business or post of duty, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located.” If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. You also cannot deduct the cost of meals and lodging while at your tax home." The IRS further defines Temporary and Indefinite Assignments as follows: "The employer must determine whether an assignment is realistically expected to last less than one year when the assignment begins. An assignment is generally considered temporary if it is realistically expected to be, and does in fact last, one year or less. Reimbursements of expenses for "indefinite" travel are taxable. Reimbursements of travel expenses for "temporary" assignments away from the tax home are generally not taxable to the employee. If the assignment is "indefinite," the employee is considered to have moved his/her tax home to the new work location. An assignment is generally considered indefinite if it is realistically expected to last, and does in fact last, for more than one year. The above are the general rules. All relevant facts must be considered to determine whether the travel assignment was intended to be temporary or indefinite." Again, to me, the crux of the matter is the definition of PDS, Official Duty Station and Tax Home. Given the above, an employee reporting to work at a location 3-4 days/week for multiple years, the location should be considered the PDS, Official Duty Station or Tax Home. Therefore, the reimbursement should be discontinued or if continued, be considered taxable income to the employee and not be a contract expense. Thoughts on those statements? Thx

Client is a government contractor. Has both T&M and CPFF subcontracts w/ large system integrator which are under defense prime contract. Employee travels from residence (distance > 100 mi) on a regular and consistent basis for 3-4 days/week for an extended period (greater than 24mos) and stays in hotel. Employee submits each week, M&IE and Lodging for the 3-4 days and Client has reimbursed employee citing TDY assignment. This is employee's only work place other than residence. Client invoices SI and SI has paid said expenses-no questions asked. New leadership at client's is questioning policy stating this can't be TDY per JTRs, must be PDS and therefore must stop policy of paying employee M&IE and lodging and accordingly cease billing SI. New leadership states every contractor's travel is governed by JTRs (which I believe is incorrect). Client's travel policy states the company will follow JTRs. SI subcontract clause pertaining to travel states: (a) Travel incurred by SELLER in the performance of this Contract shall not be reimbursed by SI unless such travel is expressly authorized in writing in advance by SI Procurement Representative. (b) When travel is authorized under this Contract, SELLER shall be reimbursed for necessary, reasonable, and actual travel expenses for transportation, lodging, meals and incidental expenses only to the extent that they (1) do not exceed the maximum per diem rate in effect at the time of travel, as set forth in the United States Federal Travel Regulations for the area of travel authorized under this Contract and (2) are otherwise reimbursable pursuant to the Allowable Cost and Payment clause of this Contract. Employee claiming TDY doesn't, in my view, pass the "smell" test. Seems like employee's permanent assignment is SI's workplace. Seems like client isn't necessarily violating SI travel clause (?) but is not following own policy. Questions: 1) Contractors bound by FAR 31.205-46 not JTR in it's entirety. FAR stipulates per diem rates to be followed under JTR, FTR, SR. Correct? 2) Are TDY definitions from JTR applicable to client under subcontract? 3) Client could have issue in that expenses charged may not be considered necessary and reasonable ? Thx

Federal Gov through policy is pushing agencies to use the cloud. This is especially advantageous for s/w development purposes. To be able to use the cloud, agencies must first submit detailed applications to DISA identifying and certifying their capacity and ability to operate, manage and maintain applications on the cloud according to rigid specifications. Once approved, a resulting ATO (Authority To Operate) is provided by DISA along with requisite cloud licenses. My client, an defense contractor providing s/w services for over 10 years, has taken an existing DoD customer through this process successfully using the DoD compliant Amazon Web Services Cloud (AWS has obtained approval for DoD compliant cloud services). In doing so, my client has developed a replicable and defined process which includes the facilitation of the ATO application along with ongoing support and maintenance of cloud application services. Estimated duration of approval effort is 12-15 mos and total cost is between $100K-$200K. Most agencies do not have the knowledge base, resources or bandwidth to attempt this on their own. My client would like to be able to provide these services (i.e. this process) on a "schedule-like" basis to other federal agencies (at least within the DoD for starters). The question is-- What is the best vehicle to offer this service so that other agencies could procure it from my client? Preliminary research points towards GSA Schedule 70, SIN 132.40. Wondering if there are other more suitable vehicles, GWACS, MACS? Also wondering about eBuy, Alliant or GSA Advantage? P.S. Client is a small business not currently on GSA Schedule Any insights greatly appreciated!