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joan

Is Lobbying a Non-US Government considered lobbying

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FAR 31.205-22 identifies six expressly unallowable activities associated with lobbying and political activity.

There are four activity numbers: 1, 3, 4, and 6 which specifically identify activity related to federal, state or local governments. Whereas, activity numbers 2 and 5 do not state explicitly federal, state, or local governments.

So do I read it in context of the other four and consider activities 2 and 5 also related to federal state and local governments?

Or do I read as written thereby making activity 2 and 5 equally relatable to foreign governments?

thanks for the assist

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Lobbying is not an unallowable activity.

However, as expressed in FAR 31.205-22, costs associated with some lobbying are unallowable. A company may lobby as it sees fit, just so it segregates its costs and doesn't include lobbying costs in its direct charges or overhead computations for FAR-covered contracts.

Lobbying is an allowed activity. However, some lobbying costs are unallowable.

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Further research: as per 1984 FAR (effective April 1 1984) Lobbying is defined as any activity or communication that is intended or designed to directly influence members of the U.S. Congress or State and local legislatures, their staffs, or the staffs of committees of these bodies....... Which seems to answer part of my question. Lobbying is directed at US Government activities. Lobbying agreed is unallowable.

However the question is would political activities as described in 2 and 5 relate to Non US Government entities?

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Joan,

Federal contractors are permitted to lobby. Lobbying is not prohibited or unallowed by the FAR; rather, the FAR places no limits on lobbying. You cannot look to the FAR to learn what sorts of lobbying are or are not allowed, or to what extent. If there are restrictions on lobbying, those laws and rules do not find place in the FAR but must be found elsewhere.

The FAR only speaks to costs for lobbying activities by federal contractors -- not to lobbying activities. A federal contractor is free to lobby, but must treat most of its lobbying activity costs as unallowable for purposes of its indirect cost rates.

So, I think your question is whether lobbying activity costs are allowable for activities of the sort described in FAR 31.205-22( a )( 2 ) and ( 5 ) when directed to foreign governments. Is that right?

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I would think that the principles in FAR 31.205-22( a )( 1 ) through ( 6 ) would apply everywhere in the world. For example, if a federal contractor wanted to contribute to an organization established for the purpose of influencing the outcome of an election in England, that cost would be unallowable under ( a )( 2 ).

At least, that would be my starting position as a contracting officer being forced to make allowability decisions. FAR 31.204( d ) admits that 31.205 doesn't cover every possible cost, but says that the principles and standards apply to undiscussed costs. So applying the principle of 31.205-22( a )( 2 ), I would say that costs of contributions to an organization established for the purpose of influencing the outcome of an election in England would be unallowable. A disagreeing contractor could file a claim, of course.

Is this helpful?

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Lobbying is a far more complex topic than has been discussed in this thread -- though I agree with what's been posted.

In order to fully understand lobbying you need to review the Internal Revenue Code, the Lobbying Disclosure Act of 1995, and the FAR. They are not congruent even in the sense of defining what is "lobbying".

That said, the one thing that is congruent is the focus on U.S. officials and not foreign officials. That type of activity is covered by other statutes, not the least of which is the Foreign Corrupt Practices Act.

Hope this helps.

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Regarding ji's post #6, many contracting officers are not aware if they disallow a cost based on allowability, the government has the burden of proving that the cost is unallowable. The contractor does not have to prove that the cost is allowable.

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Regarding ji's post #6, many contracting officers are not aware if they disallow a cost based on allowability, the government has the burden of proving that the cost is unallowable. The contractor does not have to prove that the cost is allowable.

But contrast that, very general, assertion with questioning the allowabilty of a cost based upon the reasonableness of the cost, which is an inherent element of allowability of the cost. See, for example, 31.201-2, especially ( a ) and ( d ) ; and 31.201-3.

Of course, the foreign "lobbying" activity must be legal. See, for instance, http://m.acc.com/legalresources/publications/topten/SLD-FCPA-Compliance.cfm?

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Regarding ji's post #6, many contracting officers are not aware if they disallow a cost based on allowability, the government has the burden of proving that the cost is unallowable. The contractor does not have to prove that the cost is allowable.

Not true if the CO determines a cost to be unallowable due to unreasonableness. See FAR 31.201-3(a):

(a) A 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. Reasonableness of specific costs must be examined with particular care in connection with firms or their separate divisions that may not be subject to effective competitive restraints. No presumption of reasonableness shall be attached to the incurrence of costs by a contractor. If an initial review of the facts results in a challenge of a specific cost by the contracting officer or the contracting officer’s representative, the burden of proof shall be upon the contractor to establish that such cost is reasonable. [Emphasis added.]

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