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A contractor with a CPAF contract provided a barbeque lunch as a group safety award. According to the cost principles on selected costs at FAR 31.205 some specific costs are unallowable even though certain costs may otherwise meet the other criteria for reimbursement.

Meal costs are specifically addressed at FAR 31.205-43, trade, business, technical and professional activity costs, which reads: ?The following types of costs are allowable: ? © When the principal purpose of a meeting, convention, conference, symposium, or seminar is the dissemination of trade, business, technical or professional information or the stimulation of production or improved productivity -- (1) Costs of organizing, setting up, and sponsoring the meetings, conventions, symposia, etc., including rental of meeting facilities, transportation, subsistence, and incidental costs; ??

Additionally, meals costs are also addressed specifically at FAR 31.205-14, entertainment costs, which reads: ?Costs of amusement, diversions, social activities, and any directly associated costs such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities are unallowable. Costs made specifically unallowable under this cost principle are not allowable under any other cost principle.

If my understanding is correct, the costs for the food are unallowable. However, had they given gift cards for a local restaurant (assuming that they were reasonable) the costs would be allowable.

Thanks for your time and replies.

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I don't see how that could be allowable as a direct cost to a Government contract. It could potentially be allowable to an indirect pool, though, IAW 31.205-13 Employee morale, health, welfare, food service, and dormitory costs and credits.

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George, the costs may be allowable per 31.205-13. Activities intended to promote employee health, morale, productivity, or welfare -- such as safety meetings -- may be allowable. Not sure whether a BBQ meets the reasonableness test, though.

civ_1102, cost allowability does not turn on cost allocability. Costs are allowable, or not, based on FAR cost principles and contract terms. Whether they are charged directly or indirectly does not normally enter into the determination.

Hope this helps.

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So, say I have a CPFF contract and the staff will need to work over-time. Can lunch purchased for the staff working over-time be charged to the contract?

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civ_1102, cost allowability does not turn on cost allocability. Costs are allowable, or not, based on FAR cost principles and contract terms.

Help:

Please explain your statement that cost allowability does not turn on cost allocability. FAR 31.201-2(a) lists five requirements for allowability. The second one is allocability. If a cost is not allocable, it is not allowable. Right?

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If I'm reading 31.201-2 correctly, the costs for the overtime meal incentive would not be allowed because it's not allocable? 31.201-4 (a)- yes, incurred specifically for the contract; (B) benefits contractor and government - yes; © necessary to the overall operation of the business - questionable??? The employees can work w/out the meal??

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Vern,

Really? You are asking me to explain a post made in 2009? Hasn't the Statute of Limitations expired on that one?

*Sigh*

For the record, for a cost to be allowable it of course must be allocable. FAR 31.201-4 discusses allocabilty. civ_1102's April 2009 post stated that a cost could be allowable if indirect but unallowable if direct, which is not correct. Costs are allowable or unallowable, period. Moreover, if you were to take a cost made unallowable by contract terms and conditions, and treat it as an allowable indirect cost, then you would be triggering one of the DOD IG's fraud indicators. Good luck with that.

siwilliams, no you are not reading it correctly. Whether or not meals are provided is governed by the contractor's policies, procedures and practices, which should be consistently followed. Whether employer-provided meals are direct charges or indirect charges will be governed by the contractor's Disclosure Statement (if it has one) else by its policies, procedures and practices, which should be consistently followed regardless of contract type and regardless of customer. Whether employee meals are allowable or not depends on those factors as well as contract terms and conditions, as well as what the FAR has to say regarding reasonableness.

Hope this helps.

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Help:

Forgive me. I saw the new post, but paid no attention to the dates of the old posts. "Sigh" is right. Bob ought to close these threads after they've been dormant for a month or two.

Vern

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Vern,

No worries. It gave me an opportunity to discuss something other than DCAA audit findings for a minute or two. Well worth it.

H2H

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