B-224782.5, Aug 6, 1987, Office of General Counsel
Highlights
These are FAR case Nos. 87-18 and 87-19. FAR case No. 87-18 is a proposal to revise paragraph (c) of FAR Sec. 31.205-43 to clarify the circumstances under which costs incurred in connection with meetings. The like are allowable. Our only comment is that the revised cost principle could be improved if it were to contain examples of the classes of individuals. That the term "noncontractor personnel" is intended to encompass. FAR case No. 87-19 is a proposal to amend FAR Sec. 31.205-6 by adding paragraph (1) to provide coverage on special compensation paid to a contractor's employees in connection with changes in management or control of the contractor or its assets. Also proposed is a revision of paragraph (a) of FAR Sec. 31.205-27 that would state that costs incurred in resisting a corporate takeover are unallowable.
B-224782.5, Aug 6, 1987, Office of General Counsel
PROCUREMENT - Contract Management - Federal procurement regulations/laws - Revision - Cost accounting DIGESTS: General Accounting Office comments on a proposal to revise paragraph (c) of Federal Acquisition Regulation Sec. 31.205-43 concerning the allowability of costs incurred in connection with business meetings by suggesting that the revised cost principle provide examples of the classes of individuals intended to be encompassed by the term "noncontractor personnel." General Accounting Office has no objection to a proposal to (1) amend Federal Acquisition Regulation (FAR) Sec. 31.205-6, by adding paragraph (1) to make unallowable the costs of so-called "golden parachutes" and "golden handcuffs" and (2) revise FAR Sec. 31.205 27(a) to make unallowable the costs of resisting a corporate takeover.
Ms. Margaret A. Willis:
This responds to your letter of May 29, 1987, requesting our comments on two proposed changes to the contract cost principles contained in Federal Acquisition Regulation (FAR) Sec. 31.205. These are FAR case Nos. 87-18 and 87-19.
FAR case No. 87-18 is a proposal to revise paragraph (c) of FAR Sec. 31.205-43 to clarify the circumstances under which costs incurred in connection with meetings, conferences, seminars, and the like are allowable. Our only comment is that the revised cost principle could be improved if it were to contain examples of the classes of individuals, such as speakers or technical experts, that the term "noncontractor personnel" is intended to encompass.
FAR case No. 87-19 is a proposal to amend FAR Sec. 31.205-6 by adding paragraph (1) to provide coverage on special compensation paid to a contractor's employees in connection with changes in management or control of the contractor or its assets. Costs incurred pursuant to such compensation agreements, known as "golder parachutes" or "golden handcuffs," would be unallowable. Also proposed is a revision of paragraph (a) of FAR Sec. 31.205-27 that would state that costs incurred in resisting a corporate takeover are unallowable. We have no objection to these proposed changes.