August 16, 2000
MAXIMUM PER DIEM RATES UNDER THE FEDERAL TRAVEL REGULATIONS (FTR)
PURPOSE: To clarify that the FAR deviation in Procurement Information Circular (PIC) 99-4 permits contractors to choose to satisfy the limitation on allowable travel costs by continuing to use the FTR maximum per diem rates and the definitions of lodging, meals, and incidental expenses in effect on December 31, 1998, or by using the applicable revised FTR rates and definitions that were effective on or after January 1, 1999.
BACKGROUND: FAR 31.205-46(a)(2) limits the allowable costs for contractor employee lodging, meals, and incidental expenses to the maximum per diem rates in effect at the time of travel set forth in the Federal Travel Regulations (FTR); the Joint Travel Regulation (JTR), Volume 2, DOD Civilian Personnel, Appendix A; or the Standard Regulations (Government Civilians, Foreign Areas), Section 925, "Maximum Travel Per Diem Allowances for Foreign Areas." On December 2, 1998, a final rule was issued (63 FR 66674-6676) that significantly changed how the FTR maximum per diem rate limitations are computed, such as lodging taxes being separated from the per diem rates and those costs being allowed instead as a miscellaneous expense. The revised FTR rule went into effect on January 1, 1999. The change in the FTR could result in contractors incurring a significant administrative burden and substantial costs in modifying their systems to comply with the new rule. PIC 99-4 was issued stating that a FAR deviation was being issued to allow contractors to choose to follow the limitation on travel costs in effect on December 31, 1998, or those in effect January 1, 1999. The language "those in effect January 1, 1999" was intended to convey that contractors could choose to follow the travel cost limitations and definitions in effect January 1, 1999, or as revised after that date. That wording was not intended to limit the definitions and cost limitations to only those on January 1, 1999, if the limitations or definitions were revised after that date.
GUIDANCE: For travel costs incurred after December 31, 1998, contracting officers must allow contractors to choose to satisfy the limitation on allowable travel costs by either continuing to use the FTR maximum per diem rates and the definitions of lodging, meals, and incidental expenses in effect on December 31, 1998, or by using the applicable FTR rates and definitions that became effective on or after January 1, 1999.
CANCELLATION: This PIC supersedes PIC 99-4, dated January 15, 1999.
EFFECTIVE DATE: This PIC is effective as dated and shall remain in effect until canceled or superseded.
HEADQUARTERS CONTACT: Joe Le Cren, Code HK, (202) 358-0444, email: firstname.lastname@example.org.
Associate Administrator for Procurement