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Michael11

Amending Travel Policy

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For several reasons, we are considering changing our travel policy for government contracts from a travel cost reimbursement method to a fixed per diem. We are opting to allot M&IE according to per diem and reimburse lodging at actual cost to our client.

Can anyone share their experiences updating their travel policies as Ive described or any potential best practices? In addition to our written company policy, should anything else be updated? For existing/continuing government contracts, where our previous policy was submitted as part of the proposal, do we need consent or a modification to implement this change? We would no longer be submitting detailed receipts with the invoices (for meals but still lodging) but instead using the daily M&IE/lodging.

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Can anyone share... any potential best practices?

In order for people to respond intelligently, shouldn't they get some information about the kind of work your company does and the kind of travel and how much of it your personnel typically do under a typical contract, if there is any such thing as typical? Do they always go to the same place, which would make the costs predictable and the per diem approach less risky to your customer?

Shouldn't people know something about who your customers are, so they can respond based on what they know about those agencies' rules? Are you at all concerned about the pros and cons from the point of view of your customers?

For existing/continuing government contracts, where our previous policy was submitted as part of the proposal, do we need consent or a modification to implement this change?

In order to answer that, wouldn't people need to know what your contract says about travel? For instance, was your proposal incorporated into the contract?

Maybe you want only general answers, without regard to their relevance and practicality. I guess that's it.

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Michael11,

There are many upon many government accounting consultants who will work with you to address your situation. The good ones will read your proposal and the resulting contract, evaluate the potential impact (from both a cost and revenue perspective) of making the change, and will help you sell the change to your customer while educating your employees on the new approach, rewriting your policies/procedures, and enhancing your internal processes.

You would really be better off hiring one of them -- they work cheap compared to most attorneys! -- and getting a good answer, instead of relying on advice here based on your rather vague post.

Best practice: Hire a professional to advise you.

Send me a message and I'll send you a couple of names to interview.

This approach will help.

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Vern and H2H I’m very sorry for the delayed reply I had to travel last minute and only just found time to respond. To answer’s Vern’s questions and provide a more clear picture of our situation – I would consider our travel pretty typical (I think there is such a thing, Vern) and primarily involves domestic travel to attend kick-off meetings, site visits, steering committee meetings, etc. So by no means is it extensive, but can involve a few trips per year for some contracts involving a few people. It’s not always the same destinations so wherever the contract requires us to be we go. I really don’t see any risks to our federal customers because we’ve always used gsa per diem as an estimate in our proposals, but billed based on actual as I described. If anything, I think it would be a good thing for them since they won’t have to sift through pages and pages of receipts. In turn, we won't have the administrative burden either.

I reviewed our contracts and what they say about travel. Most say some combination of “travel costs will be reimbursed in accordance with Federal Travel Regulations and the contractor’s policies”. There are several different wordings but I read them to say the contractor can invoice travel in accordance with their policy so long as it also aligns with FTR. I don’t see anything that indicates any of the proposals are actually incorporated into the contract so based on the contract, I think either way should be allowable and really don’t foresee too much heartburn from the customer. Just didn’t know, given the lack of any restrictive travel language, whether it is recommended to get the govt’s blessing before ceasing to submit travel expenses as we are currently doing. I realize this will have implications with rewriting policies, educating employees, job costing etc. H2H I really appreciate your insights also. We were not expecting to need any outside consulting but I will send you a PM so we can discuss the possibility of going that route

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Michael11,

So your company is a small business and/or otherwise exempt from the requirements of the Cost Accounting Standards (CAS)? None of your current contracts contain any clauses that start with 52.230? Every one of your proposals that resulted in a contract award contained a Section K Representation/Certification that showed your company was claiming an exemption from CAS coverage?

That set of circumstances will certainly make the contemplated change much easier to implement.

Good luck!

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