Federal Travel Regulations (FTR) establish the guidelines for reimbursing travel expenses incurred by contractor personnel. Understanding these regulations is crucial for contractors to ensure compliance and proper reimbursement for costs related to transportation, lodging, meals, and incidental expenses. This article provides a comprehensive overview of the key aspects of federal travel regulations that contractors must adhere to.
Understanding Allowable Travel Costs
For contractor personnel on official company business, certain travel costs are considered allowable, provided they meet specific limitations. These costs generally encompass transportation, lodging, meals, and incidental expenses. Contractors have flexibility in calculating transportation costs, which can be based on mileage rates, actual costs, or a combination, as long as the method yields a reasonable charge. Similarly, lodging, meals, and incidental expenses can be calculated using per diem rates, actual expenses, or a combination, again ensuring a reasonable overall cost.
Per Diem Rates and Their Application
Federal travel regulations stipulate that costs for lodging, meals, and incidental expenses should not exceed the maximum per diem rates in effect at the time of travel. These rates are meticulously outlined in several key publications, depending on the travel location:
- Contiguous United States: The Federal Travel Regulations (FTR), prescribed by the General Services Administration (GSA), dictate per diem rates for travel within the contiguous United States.
- Alaska, Hawaii, and U.S. Outlying Areas: The Joint Travel Regulation (JTR), Volume 2, Appendix A, issued by the Department of Defense (DoD) for Civilian Personnel, governs travel in Alaska, Hawaii, and outlying areas of the U.S.
- Foreign Areas: For travel outside the areas covered by FTR and JTR, the Standardized Regulations (Government Civilians, Foreign Areas), Section 925, “Maximum Travel Per Diem Allowances for Foreign Areas,” established by the Department of State, are applicable.
These regulations are available on a subscription basis from the U.S. Government Publishing Office.
Exceptions for Actual Costs Above Per Diem Rates
While adherence to per diem rates is generally required, federal travel regulations recognize that special or unusual situations may necessitate incurring actual costs that exceed these rates. In such instances, higher actual costs may be deemed allowable, but they must not surpass the maximum amounts authorized for federal civilian employees under the same regulations.
To justify costs exceeding per diem rates, several conditions must be met:
- Valid Justification: One of the conditions justifying the use of the actual expense method, as detailed in the FTR, JTR, or Standardized Regulations, must exist.
- Written Approval: A written justification for using higher amounts must be approved by a designated officer within the contractor’s organization. This ensures proper oversight and prevents misuse.
- Advance Contracting Officer Approval (for Repetitive Use): If the higher actual expense method is required repeatedly or continuously in a specific area, the contractor must obtain advance approval from the contracting officer.
- Detailed Documentation: Documentation supporting actual costs must align with the contractor’s established practices and include receipts for all expenditures of $75.00 or more. The approved justification and any required advance approval must be retained.
It is important to note that only specific aspects of the FTR, JTR, and Standardized Regulations are incorporated into these contractor travel cost guidelines – specifically, the maximum per diem rates, definitions of lodging, meals, and incidental expenses, and the provisions for special or unusual situations.
Advance Agreements and Per Diem Adjustments
Contractors may find it beneficial to establish an advance agreement with the contracting officer regarding compliance with these travel cost regulations. Such agreements can clarify expectations and streamline the reimbursement process.
Furthermore, the maximum per diem rates are generally not considered reasonable daily charges in situations where lodging costs are not incurred or on partial travel days, such as the days of departure and return. In these cases, appropriate downward adjustments from the maximum per diem rates are necessary to ensure a reasonable charge. While the regulations do not mandate a specific calculation method for these adjustments, they must result in a fair and justifiable cost.
Essential Documentation for Travel Expenses
To ensure the allowability of travel costs, contractors must maintain thorough documentation. This documentation must include:
- Date and Location of Expenses: Clearly record the date and place (city, town, or similar designation) where expenses were incurred.
- Purpose of Trip: State the business purpose of the travel.
- Traveler Information: Document the name of the person traveling and their title or relationship to the contractor.
Airfare and Aircraft Travel Regulations
Airfare Costs
Federal travel regulations also address airfare costs, stipulating that airfare costs exceeding the lowest priced airfare available during normal business hours are generally unallowable. Exceptions are made when the lowest fare necessitates circuitous routing, unreasonable travel hours, excessively prolonged travel, increased costs offsetting transportation savings, or is inadequate for the traveler’s physical or medical needs, or is unavailable to meet mission requirements. However, any exception must be thoroughly documented and justified to be considered allowable.
Contractor-Owned, Leased, or Chartered Aircraft
When travel involves contractor-owned, leased, or chartered aircraft, the regulations specify that costs are limited to the allowable airfare for the destination. Higher costs may be approved only if travel by such aircraft is contractually required or justified under the same circumstances that allow for higher airfare. Advance agreements can also be established to address these situations.
For every flight on contractor-owned, leased, or chartered aircraft charged to a government contract, detailed manifests/logs must be maintained. These logs must include:
- Departure Information: Date, time, and points of departure.
- Arrival Information: Destination, date, and time of arrival.
- Passenger Details: Name of each passenger and their relationship to the contractor.
- Trip Authorization: Authorization for the trip.
- Purpose of Trip: The business purpose of the travel.
Regulations for Contractor-Owned or Leased 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, is considered compensation for personal services and is unallowable.
Conclusion
Compliance with federal travel regulations is essential for contractors seeking reimbursement for travel expenses. By understanding the guidelines related to per diem rates, allowable exceptions, documentation requirements, and specific rules for airfare, aircraft, and automobile usage, contractors can ensure they adhere to these regulations and facilitate a smooth reimbursement process. Staying informed and maintaining meticulous records are key to navigating federal travel regulations successfully.
