Jump to content
The Wifcon Forums and Blogs
CHILINVLN

Billable travel outside of primary work hours

Recommended Posts

This question always seems to come up and each time, I get a difference answer from my contracts shop or the Government, so I'd like to try to get some help and/or clarification here.

I have a contract where folks are often required to travel, on weekends in order to be on location by Monday morning to support the Government.  Employees are taking military flights, authorized by the Government, on Sunday's in order to be there by Monday.  The contract is Labor Hour.  Thoughts?  Here is the exchange below.

Email 1 - CO states:
Travel hours outside of work hours are not considered billable.

Email 2 - My response:
Can you please point me to the guidance you are referencing?  It was my understanding based on the Federal Travel Regulations that travel time approved by the government was in fact allowable.

Email 3 - CO response:
The government has not given permission to any vendor to charge for travel after duty hours. The government will reimburse the vendor for all travel expenses incurred. Why does COMPANY think the government should pay for travel during non-working hours? What service is the COMPANY employee providing the government while traveling?

Share this post


Link to post
Share on other sites

You asked for thoughts.  I’ll share mine.  A FAR-based labor-hour contract allows for hourly-rate payment for hours of contract work.  A contractor employee is not performing contract work while eating his breakfast, brushing his teeth, or commuting to the work site.  Whether the contractor pays its employees for this time is its own business, but that time is not billable to the government on a labor-hour contract.

Share this post


Link to post
Share on other sites

My thoughts. 

What does the contract say?

If FAR clause 52.232-7 Payments under Time-and-Materials and Labor-Hour Contracts or FAR clause 52.212-4 Contract Terms and Conditions - Commercial Items (Alternate 1) is in the contract then the payment terms of the contract are clear - payment of the hourly rate of the contract will only be  for direct hours worked.   Noting this then it is left to the contract wording as to what "direct hours" might be. 

You have quoted the Federal Travel Regulations (FTR)  as your position that the travel time should be "direct hours".  However in the Federal government the FTR does not govern the payment to employees for travel outside normal working hours the employment regulations do - therefore making "direct hours" for a Federal employee travel time in some cases.  You can find a fact sheet here that explains the regulations -  https://www.opm.gov/policy-data-oversight/pay-leave/work-schedules/fact-sheets/hours-of-work-for-travel/

So now we are back to the contract - Does it say the "FTR applies regarding travel" or does it say something like "The FTR and Federal regulations regarding payment for hours worked will apply to the contract"? 

I am guessing the former and not the latter and as such direct hours worked is as ji20874 has provided.  But not to beat the drum too much what does your contract actually say and then go from there.

Share this post


Link to post
Share on other sites

The contract requires contractor employees to be on site early Monday morning. To meet this objective, the government has authorized use of military flights (on Sunday) to transport contractor personnel to the desired location(s). The question is whether or not flight time is compensable time, or if it is "normal commute" time.

We don't know any more, so it's not possible to say definitively what is going on here. All we know is that the contractor employees cannot drive or take commercial flights to the government location.

If this were a "normal" situation, I would expect the employees to stay at a hotel, located near the government site, on Sunday so as to be ready to work on Monday morning. If they did so, I would argue that the lodging and per diem cost would be allowable, but not the travel time. In this case, that option does not appear to be feasible.

We don't know how long the flight time is. Is it 2 hours or 8 hours? If the latter, the government is essentially asking the contractor employees to give up their Sunday in order to be ready to work on Monday. That feels as if it should be compensable time to me. In other words, in order to meet the government's needs, the contractor must incur many hours--hours that I would argue are direct hours of the contract, since it is the contract that requires the travel.

My thoughts ...

Share this post


Link to post
Share on other sites

Since this question always seems to come up, it would be easy for the contractor to negotiate for the outcome it seeks before the contract is awarded.

We don’t know whether the contractor is paying its employees for Sunday travel.  If it is, the contractor already knows how to charge those costs to its indirect cost pools — and since the hourly rates in the contract include all indirect costs, the Government is already paying the contractor for the travel time.

Share this post


Link to post
Share on other sites

If this was a T&M contract, the travel would be considered as material.  For a labor hour contract, i agree with Carl, the basic question is what does the contract say about travel.  Also, I agree with H2H, if the travel is necessary for contract performance, it should be compensable.

Share this post


Link to post
Share on other sites

I might add that we do not know the contractors cost structure...by example how does the contractor pay its employees otherwise for such travel and where is that cost captured?  And how do the contractor's practices line up with contract requirements?

Posing the question to the government after contract award in my humble opinion seems to be less than a appropriate practice all the way around.

Share this post


Link to post
Share on other sites
On ‎7‎/‎27‎/‎2019 at 10:11 PM, CHILINVLN said:

Can you please point me to the guidance you are referencing?  It was my understanding based on the Federal Travel Regulations that travel time approved by the government was in fact allowable.

Why are you worrying about what the JTR says on this?  The travel cost principle does not incorporate such coverage in the FAR.  The only parts of the JTR that are a part of the FAR are the sections dealing with lodging and per diem.  See FAR 31.205-46.  The real issue is whether the travel time is considered as direct labor under the terms of the contract.  Unless the contract says otherwise, because the travel is necessary for performance of the contract, it should be compensable.  In this regard, the LH Payments clause does not require that direct hours be performed during any period of the day in order for them to be compensable.  As an alternative, ask the contracting officer if it would be acceptable for the employee to travel during business hours on Friday and charge per diem for Sat and Sun  in order to be available on Monday?

Share this post


Link to post
Share on other sites
22 hours ago, Retreadfed said:

The only parts of the JTR that are a part of the FAR are the sections dealing with lodging and per diem.  See FAR 31.205-46.

Hear, hear!

PepeTheFrog thinks that commute time is quite different from traveling four hours on a plane on a Sunday to get to a government-designated site on Monday. In other words, PepeTheFrog (ignoring what the contract says) would advocate for paying a contractor for this type of travel time.

45 minutes to drive from the trailer park to government shack on Monday morning: don't pay for it

4 hours riding in a hot air balloon on Sunday: pay for it

Share this post


Link to post
Share on other sites

What if the contractor employee is salaried and his or her employer (the contractor) doesn’t pay the employee by the hour?  Would you still insist on paying the contractor for those non-work commute hours?

Share this post


Link to post
Share on other sites

The government now compensates its salaried government employees for travel time outside normal duty hours. Before the late 90’s or early 2000’s, we travelled on weekends and evenings without any compensation. 

But if a contractor doesn’t compensate salaried employees for outside hours, contractor has no costs for such outside hours. 

 

Share this post


Link to post
Share on other sites

Contractors are free to compensate their employees for travel time outside normal working hours.

For those that do, one supposes those costs will be charged to the appropriate indirect charge account, and those costs will be part of the hourly rate the government pays on a labor-hour contract.  

The contract clauses prescribed in the FAR for labor-hour contracts control how the Government pays the contractor, not how the contractor pays its employees.  Contractor employees are not Government employees.    

Share this post


Link to post
Share on other sites
1 hour ago, joel hoffman said:

The government now compensates its salaried government employees for travel time outside normal duty hours. Before the late 90’s or early 2000’s, we travelled on weekends and evenings without any compensation. 

But if a contractor doesn’t compensate salaried employees for outside hours, contractor has no costs for such outside hours. 

 

Not true.  This quote from the OPM document I already referenced in this thread - 

"In limited circumstances, travel time may be considered hours of work. The rules on travel hours of work depend on whether an employee is covered by or exempt from the Fair Labor Standards Act (FLSA). "

Come on folks it's a contract!

Think about it.  Commercial item contract.  Government - Oh shoot we are paying you too much for this we didnt understand so contractor why dont you drop your price for us!   Contractor - Why?  Government because we want you to be nice!

Share this post


Link to post
Share on other sites
1 hour ago, ji20874 said:

What if the contractor employee is salaried and his or her employer (the contractor) doesn’t pay the employee by the hour?  Would you still insist on paying the contractor for those non-work commute hours?

Yes, if it is a labor hours prime contract. 

If it is cost reimbursable, then PepeTheFrog sees your point. 

Share this post


Link to post
Share on other sites
1 hour ago, ji20874 said:

What if the contractor employee is salaried and his or her employer (the contractor) doesn’t pay the employee by the hour?  Would you still insist on paying the contractor for those non-work commute hours?

First, this does not appear to be a commute.  Instead, the contractor employee is in a travel status.  Second, this is a labor hour contract.  What the contractor gets paid for is generally determined by the version of FAR 52.232-7 that is in the contract.  For hours worked, the contractor is entitled to be paid the hourly rate specified in the contract regardless of the cost to provide that hour.  In this regard, see GaN Corp. ASBCA No.57834 (July 13, 2012).

Share this post


Link to post
Share on other sites
1 hour ago, Retreadfed said:

First, this does not appear to be a commute.  Instead, the contractor employee is in a travel status.  Second, this is a labor hour contract.  What the contractor gets paid for is generally determined by the version of FAR 52.232-7 that is in the contract.  For hours worked, the contractor is entitled to be paid the hourly rate specified in the contract regardless of the cost to provide that hour.  In this regard, see GaN Corp. ASBCA No.57834 (July 13, 2012).

Exactly! Some folks in this thread are confusing labor hour distribution, salary/wage distribution, and allowable/billable labor costs. Three things that are not the same.

Share this post


Link to post
Share on other sites
1 hour ago, here_2_help said:

Exactly! Some folks in this thread are confusing labor hour distribution, salary/wage distribution, and allowable/billable labor costs. Three things that are not the same.

This comment leaves too much to the imagination as to whose comments are confusing.  So I will try to get clarity.

Should not the contract dictate what direct labor/cost  is and is not?  Consider for example (D) Other Direct Costs of 52.212-4 Alt 1.

Share this post


Link to post
Share on other sites
9 hours ago, C Culham said:

Not true.  This quote from the OPM document I already referenced in this thread - 

"In limited circumstances, travel time may be considered hours of work. The rules on travel hours of work depend on whether an employee is covered by or exempt from the Fair Labor Standards Act (FLSA). "

Come on folks it's a contract!

Think about it.  Commercial item contract.  Government - Oh shoot we are paying you too much for this we didnt understand so contractor why dont you drop your price for us!   Contractor - Why?  Government because we want you to be nice!

What’s not true? We were compensated by earning comp time off with pay. Our travel  time was charged to the project we were working on at the burdened hourly rates.  After all, it’s paid time off. 

https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/compensatory-time-off-for-travel/

At any rate, my point is that I don’t have a fundamental problem with paying for non-commuting travel time on a Sunday or nights, etc. if the government requires the contractor to travel on nights or weekends, unless the contract forbids it. 

If the trip costs were being negotiated for some reason on a FFP contract and there was no additional cost to the contractor, there was no cost to reimburse. 

Share this post


Link to post
Share on other sites
1 hour ago, C Culham said:

Should not the contract dictate what direct labor/cost  is and is not?  Consider for example (D) Other Direct Costs of 52.212-4 Alt 1.

No. The contractor's practices, consistently applied, determine what is a direct cost and what is not. See the FAR definition of "direct cost".

Share this post


Link to post
Share on other sites

Maybe the contract doesn’t require the contractor employee to travel on Sunday, but merely allows it by offering free transportation?  Would that change anyone’s thought?

Based on the information from the original poster, I remain comfortable in my thought that the contractor employee’s travel time does not qualify for hourly-rate payment under a FAR-based labor-hour contract.  This is based on the facts of a labor-hour contract agreed to by the parties as reflected in the clause at FAR 52.232-7 or FAR 52.212-1 w/Alt. I, whichever is in the contract.  The original poster may have abandoned this thread without providing any additional information that might be helpful.

For the original poster, since this matter “always seems to come up,” you might think about including a term or condition in your next proposal so that an agreement of the parties is reached before the contract is formed.  Then, there will be no confusion.  

Share this post


Link to post
Share on other sites
3 hours ago, ji20874 said:

For the original poster, since this matter “always seems to come up,” you might think about including a term or condition in your next proposal so that an agreement of the parties is reached before the contract is formed.  Then, there will be no confusion.

Good point for a sole source negotiated acquisition. 

But if a proposed term or condition conflicts with another aspect of a competitive government RFP, it may be non-conforming, unawardable without discussions.  

Share this post


Link to post
Share on other sites
15 hours ago, here_2_help said:

No. The contractor's practices, consistently applied, determine what is a direct cost and what is not. See the FAR definition of "direct cost".

Not sure I agree and think you and I are now confusing labor hour distribution, salary/wage distribution, and allowable/billable labor costs together.     Back to the aforementioned clause it states - "The amounts shall be computed by multiplying the appropriate hourly rates prescribed in the contract by the number of direct labor hours performed."   The question is not what a direct cost is, it is what is a direct labor hour.    I believe the government may take steps to define within the contract what a direct labor hour is.

This example runs in my head - Contract for road maintenance services - Labor Hour Contract.   The contract is for federal roads in Oregon.   The contractor that gets award is from Vermont.   The contract provides that any work done under the contract will be performed during normal government hours of 8am to 5pm Monday through Friday.  So by my read of your position if the contractor elects to keep his employees in Vermont on weekends and have them travel on Sunday and return to Vermont on Saturdays to be available on Monday of each week you would pay the contractor for the travel hours for the employees?

Now to the OP's situation.  We have not seen the contract, we do not know if the MAC flights are mandatory and only available on Sundays, noting nothing is being said about return flights, so we do not know what a "direct labor hour" is defined as under the contract.  Bottom line for me is a specific answer depends on the specific requirements of the contract.  

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


×
×
  • Create New...