Navigating the complexities of Federal Travel Regulations (FTR) is crucial for contractors when it comes to claiming travel expenses. These regulations dictate what costs are allowable and under what conditions, ensuring taxpayer money is spent responsibly. This guide breaks down the key aspects of FTR as they pertain to contractor travel costs, providing clarity and ensuring compliance.
Allowable Travel Costs for Contractors Under Federal Guidelines
The cornerstone of FTR for contractors is that travel costs must be reasonable and directly related to official company business. This encompasses transportation, lodging, meals, and incidental expenses. The regulations allow for flexibility in calculating these costs, permitting the use of mileage rates, actual costs, per diem rates, or combinations thereof, provided the method yields a reasonable charge.
Transportation Costs
Contractors can claim transportation costs based on various methods. Whether it’s using personal vehicles and claiming mileage, utilizing public transportation, or incurring actual costs for travel, the key is to ensure the method chosen results in a reasonable and justifiable expense. Detailed records are essential to support these claims.
Lodging, Meals, and Incidental Expenses: Per Diem and Actual Costs
For lodging, meals, and incidental expenses, FTR often points to the concept of per diem rates. These are pre-determined daily allowances set by the government for different locations. The regulations specify that costs for these categories are deemed reasonable only if they do not exceed the maximum per diem rates in effect at the time of travel. These rates are published in:
- Federal Travel Regulations (FTR): For travel within the contiguous United States.
- Joint Travel Regulation (JTR): For travel in Alaska, Hawaii, and outlying US areas.
- Standardized Regulations (Government Civilians, Foreign Areas): For international travel.
These resources, while subscription-based, are vital for contractors to accurately determine allowable per diem rates and ensure compliance with federal travel regulation standards.
When Actual Costs Exceed Per Diem: Special Circumstances
While per diem rates provide a benchmark, FTR acknowledges that special or unusual situations may warrant exceeding these rates. In such cases, actual costs exceeding per diem are allowable, but they must not surpass the higher amounts authorized for federal civilian employees under the same regulations. Strict conditions apply to justify these exceptions:
- Justifying Circumstance: The situation must meet one of the conditions outlined in FTR, JTR, or Standardized Regulations that warrant the use of actual expense methods.
- Written Justification and Approval: A written justification detailing the necessity of exceeding per diem must be approved by a designated officer within the contractor’s organization. This ensures proper oversight and prevents misuse.
- Advance Approval for Repetitive Use: If the need to use actual expenses above per diem becomes frequent in a particular area, advance approval from the contracting officer is mandatory.
- Documentation: Detailed documentation supporting all actual costs is required, adhering to the contractor’s established practices. Receipts are mandatory for expenses of $75.00 or more. The approved justifications must also be retained.
It’s important to note that FTR does not fully incorporate all aspects of the cited regulations. It primarily focuses on maximum per diem rates, definitions of lodging, meals, incidental expenses, and the rules governing special or unusual circumstances.
Adjustments to Per Diem Rates: Partial Travel Days and No Lodging Costs
The maximum per diem rates are generally not considered reasonable in situations like partial travel days (departure and return days) or when no lodging costs are incurred. In these instances, downward adjustments from the maximum per diem are necessary to reflect a reasonable daily charge. While the regulations don’t mandate a specific calculation method for these adjustments, they must result in a reasonable and justifiable amount.
Essential Documentation for Travel Costs
To ensure costs are allowable, contractors must meticulously document the following information for every travel expense:
- Date and Place: Clearly record the date and specific location (city, town) where expenses were incurred.
- Purpose of Trip: State the business purpose of the travel.
- Traveler Information: Document the name of the person who traveled and their title or relationship to the contracting company.
Airfare Costs: Reasonableness and Justification
FTR emphasizes cost-effectiveness in air travel. Airfare costs exceeding the lowest priced airfare available during normal business hours are generally unallowable. Exceptions are made only under specific, justifiable conditions, such as:
- Circuitous routing being necessary.
- Travel during unreasonable hours being required.
- Excessively prolonged travel.
- Increased overall costs outweighing transportation savings.
- Accommodations not being reasonably adequate for the traveler’s physical or medical needs.
- Lack of reasonable availability to meet mission requirements.
However, to claim airfare costs exceeding the lowest fare, contractors must thoroughly document and justify the applicable condition(s).
Contractor-Owned, Leased, or Chartered Aircraft
When travel involves contractor-owned, leased, or chartered aircraft, the allowable costs are typically limited to the standard allowable airfare for the destination. Higher costs can be approved only if the use of such aircraft is contractually required or authorized by the contracting officer. Justifications for higher costs can mirror the exceptions for standard airfare or be based on an advance agreement.
Crucially, all travel using contractor-owned aircraft must be fully documented and justified. Flight manifests or logs are mandatory, detailing:
- Departure date, time, and location.
- Arrival destination, date, and time.
- Passenger names and their relationship to the contractor.
- Trip authorization.
- Purpose of the trip.
Advance agreements regarding aircraft use may consider factors like the availability and suitability of commercial airlines and whether the flexibility of private aircraft leads to time and cost savings.
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, any portion of these costs related to personal use by employees, including commuting, is considered compensation and is unallowable.
Conclusion: Ensuring Compliance with Federal Travel Regulation
Adhering to federal travel regulation is paramount for contractors seeking reimbursement for travel expenses. Understanding the nuances of allowable costs, per diem rates, documentation requirements, and the specific rules for air travel and company-owned vehicles is essential for compliance and accurate cost reporting. By meticulously following these guidelines and maintaining thorough records, contractors can confidently navigate the FTR landscape and ensure their travel expenses are both reasonable and allowable.
