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We have an employee who lives overseas in country A but also works in country A under our DOD prime contract and is eligible to receive HOLA, COLA & DBA under our CPFF contract. The employee has gone on short term disability and will soon go on long term disability. Can the Govt. still be invoiced for HOLA and COLA  & DBA during both short and long term disability absences? or should we, as the prime contractor, pay these costs directly (and not expect reimbursement from the govt?).  How should these allowances be handled and is there any specific guidance for these circumstances ?  

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18 hours ago, ji20874 said:

Are you asking if you can make direct charges under the CPFF contract for an employee who is not doing contract work?

That's a fair question.

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awayforward, in regard to HOLA and COLA, the FAR does not require or address these payments.  Their allowability will be determined by the general principles for compensation found in FAR 31.205-6 and the rules for allowability in 31.201-2, particularly allocability, reasonableness and the terms of your contract.  Because no one at this forum knows all the facts relating to this issue, I do not think anyone here can give you a definitive answer to your question concerning reimbursement of these costs. However, whether you make these payments seems to be a question of company policy and the arrangement you have with the employee.  This is a separate question from whether the payments are reimbursable.

As for DBA payments, again it is not clear what payments you are asking about, e.g., payments of premiums or payments to the individual required by FAR 52.228-3.  If they are the latter, I would say they are allowable because they are incurred specifically as required by the terms of the contract.

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