Navigating the complexities of travel expenses can be a significant undertaking for contractors working with the U.S. federal government. To ensure compliance and proper reimbursement, it’s crucial to understand Federal Travel Regs, or Federal Travel Regulations. These regulations dictate what costs are considered allowable and reasonable when contractors undertake travel on behalf of the government. This guide will delve into the key aspects of these regulations, providing clarity and practical insights for contractors to effectively manage their travel expenses.
Core Principles of Federal Travel Regulations
Federal travel regulations are designed to ensure that taxpayer money is spent responsibly and that travel costs charged to government contracts are fair and justifiable. The regulations cover a range of expenses, primarily focusing on transportation, lodging, meals, and incidental expenses. A fundamental principle underpinning these regulations is that costs must be reasonable.
Allowable Costs: Transportation, Lodging, Meals, Incidentals
Contractors can typically claim costs associated with transportation, lodging, meals, and incidental expenses incurred during official company business. Transportation costs can be calculated based on mileage rates, actual costs, or a combination, provided the chosen method results in a reasonable charge. Similarly, lodging, meals, and incidental expenses can be reimbursed based on per diem rates, actual expenses, or a combination, again, ensuring a reasonable overall cost.
Per Diem Rates: Your Benchmark for Reasonableness
To standardize and simplify the process, federal travel regulations heavily rely on per diem rates. These are pre-determined daily allowances for lodging, meals, and incidental expenses, varying based on location. The federal travel regs specify that costs for lodging, meals, and incidentals are considered reasonable only if they do not exceed the maximum per diem rates in effect at the time of travel.
These rates are published in several key resources:
- Federal Travel Regulations (FTR): Prescribed by the General Services Administration (GSA), these cover travel within the contiguous United States. They are accessible through subscription from the U.S. Government Publishing Office.
- Joint Travel Regulation (JTR), Volume 2, DoD Civilian Personnel, Appendix A: Issued by the Department of Defense (DoD), this regulation applies to travel in Alaska, Hawaii, and U.S. outlying areas. Like the FTR, it’s available via subscription from the U.S. Government Publishing Office.
- Standardized Regulations (Government Civilians, Foreign Areas), Section 925: Set by the Department of State, these regulations dictate maximum per diem allowances for travel in foreign areas not covered by the FTR or JTR. These are also available from the U.S. Government Publishing Office.
Navigating Per Diem Rates and Actual Costs
While per diem rates provide a clear benchmark, understanding how to apply them and when actual costs can be claimed is crucial.
Standard Per Diem Rates
Generally, contractors should adhere to the maximum per diem rates outlined in the relevant federal travel regs for their travel location. These rates are designed to cover typical costs for lodging, meals, and incidental expenses in a given area. Using per diem rates simplifies expense reporting and ensures automatic compliance in most situations.
When Actual Costs Exceed Per Diem
The regulations acknowledge that special or unusual situations may arise where actual costs exceed the standard per diem rates. In such cases, exceeding the per diem is permissible, but it requires careful justification and approval. These higher actual costs must not exceed the amounts authorized for federal civilian employees under similar circumstances, as detailed in the FTR, JTR, or Standardized Regulations.
Justification and Approval for Higher Costs
To claim actual expenses exceeding per diem, contractors must meet specific conditions and obtain proper authorization. These conditions are aligned with those that would warrant the actual expense method for federal employees, as described in the federal travel regs. Crucially, a written justification must be prepared and approved by a designated officer within the contractor’s organization. This internal approval process ensures accountability and prevents misuse. If higher actual expenses become a recurring need in a particular location, advance approval from the contracting officer is required. Detailed documentation supporting all actual costs, including receipts for expenditures of $75.00 or more, is mandatory.
Specific Travel Expense Categories
Beyond the general principles and per diem rates, federal travel regs also address specific categories of travel expenses, including airfare, company-owned aircraft, and automobiles.
Airfare: Finding the Lowest Fare
For air travel, the regulations prioritize cost-effectiveness. Contractors are expected to utilize the lowest priced airfare available during normal business hours. Exceptions are made only under specific, justifiable circumstances, such as when choosing the lowest fare would necessitate circuitous routing, travel during unreasonable hours, excessively prolonged travel time, or result in other increased costs that negate the savings on airfare. Other acceptable reasons include inadequate accommodations for traveler’s physical or medical needs or unavailability of the lowest fare to meet mission requirements. Any deviation from the lowest fare must be thoroughly documented and justified.
Company Aircraft: Regulations and Documentation
Travel using contractor-owned, leased, or chartered aircraft is subject to specific limitations. The allowable cost is generally capped at the equivalent of the lowest priced commercial airfare for the destination, unless using company aircraft is explicitly required by the contract or a higher amount is pre-approved by the contracting officer. Higher costs may be approved if circumstances justifying higher airfare (as mentioned above) exist, or if an advance agreement is in place. Detailed documentation is always required for company aircraft usage, including flight manifests/logs that record dates, times, origins, destinations, passenger names and affiliations, trip authorizations, and trip purposes.
Contractor-Owned Automobiles
Costs associated with contractor-owned or leased automobiles, including lease, operation, maintenance, depreciation, and insurance, are allowable to the extent they are used for company business and are deemed reasonable. However, the portion of automobile costs related to personal use by employees, including commuting to and from work, is considered personal compensation and is not an allowable contract cost.
Documentation Requirements: Essential for Compliance
Regardless of the expense type, proper documentation is paramount for compliance with federal travel regs. For all travel expenses, contractors must document:
- The date and specific location (city, town, etc.) where expenses were incurred.
- The business purpose of the trip.
- The name and title (or relationship to the contractor) of the person traveling.
This detailed record-keeping is essential for justifying costs and ensuring smooth reimbursement.
Conclusion
Understanding and adhering to federal travel regs is crucial for contractors working with the U.S. government. By focusing on the principles of reasonableness, utilizing per diem rates effectively, properly justifying exceptions, and maintaining thorough documentation, contractors can confidently navigate the complexities of travel expenses and ensure compliance with government regulations. This proactive approach fosters transparency, accountability, and ultimately, successful partnerships between contractors and the federal government.
