Senators oppose plan to lift contractor per diem cap

Lawmakers lambasted a proposal that would lift limits on federal contractors' travel and relocation expenses in a letter last week to Office of Management and Budget Director Jacob Lew. The Sept. 18 letter from Sens. Tom Harkin, D-Iowa, Jeff Sessions, R-Ala., and Russell Feingold, D-Wis., is the latest in a series of letters from senators to administration officials criticizing a proposal that would allow contractors to bill the government for "reasonable" travel, lodging and relocation costs. In May 1999, the acquisition councils for civilian agencies and the Defense Department announced a proposed rule that would free contractor personnel from the maximum per diem rates under which federal employees operate. Contractors want the restrictions removed because they say hotels often won't give them the discounted rate that federal employees get and because of the paperwork involved in reporting travel expenses. The proposed rule also suggests that removing contractors' per diem limits would reduce some government administrative costs. In June, Sens. Joseph Lieberman, D-Conn., and Richard Durbin, D-Ill., urged OMB's Office of Federal Procurement Policy (OFPP) to drop its plan to free contractors from the per diem cap. Sens. Paul Sarbanes, D-Md., Charles Robb, D-Va., John Warner, R-Va., Barbara Mikulski, D-Md., and Daniel Akaka, D-Hawaii, had written a similar letter in February. In the Sept. 18 letter, Harkin, Sessions and Feingold argued that "the contention that the use of a 'reasonableness' standard for the travel and relocation cost principles would result in reduced administrative costs seems improbable. Lifting the ceilings will instead force already hard-pressed auditors to verify that claims for reimbursement are 'reasonable.' " Prior to 1994, a provision of the Office of Federal Procurement Policy Act required that contractor employees follow federal per diem rates, but the 1994 Federal Acquisition Streamlining Act repealed that provision. The Defense Contract Audit Agency has estimated that the proposed rule would cost the government $130 million annually in contractor relocation reimbursements. The American Federation of Government Employees also opposes what it sees as special treatment for contractors. "AFGE believes these senators have the right idea-no blank check for contractors on travel or relocation," said AFGE spokeswoman Magda Lynn Seymour.
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