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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: May 15, 2002

SUBJECT: Federal Acquisition Regulation (FAR); Training and Education Cost Principle

SOURCE: Federal Register, May 15, 2002, Vol. 67, No. 94, page 34809

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Proposed Rule

SYNOPSIS: It is proposed that FAR 31.205-44, Training and Education Costs, be amended to make it less restrictive by generally allowing the costs associated with training and education.

DATES: Comments on the proposed rule must be submitted by July 15, 2002.

ADDRESSES: Submit comments to General Services Administration, FAR Secretariat (MVP), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405, or by e-mail to farcase.2001-021@gsa.gov. Cite FAR case 2001-021 in all correspondence related to this proposed rule.

FOR FURTHER INFORMATION CONTACT: Jeremy Olson, 202-501-3221.

SUPPLEMENTAL INFORMATION: Currently, FAR 31.205-44 is restrictive in that it differentiates between vocational training, part-time college level education, full-time education, and specialized programs with numerous specific limitations on the allowability of costs associated with each of these categories.

The proposed rule would make the costs associated with training and education allowable, subject to five public policy exceptions that are retained from the current cost principle:

  1. Overtime compensation for training and education.

  2. Costs of tuition, fees, training materials and textbooks, subsistence, salary, and any other emoluments in connection with full-time college level education, including training provided at the contractor's own facilities, at an (a) undergraduate level; or (b) postgraduate level except "where the course or degree pursued is related to the field in which the employee is working or may reasonably be expected to work and is limited to a total period not to exceed two school years or the length of the degree program, whichever is less, for each employee so trained." In addition, the cost of salaries for attending undergraduate or graduate level classes on a part-time basis would be unallowable, "except for attending such classes during working hours where circumstances do not permit attendance at these classes before or after regular working hours."

  3. Grants to educational or training institutions, including the donation of facilities or other properties, scholarships, and fellowships (because they are considered "contributions").

  4. Training or education costs for other than bona fide employees, "except that the costs incurred for educating employee dependents (primary and secondary level studies) when the employee is working in a foreign country where suitable public education is not available may be included in overseas differential pay."

  5. Costs of college plans for employee dependents.

Except for these five expressly unallowable cost exceptions, the reasonableness of specific contractor training and education costs should be determined by referring to FAR 31.201-3, Determining Reasonableness.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2002 by Panoptic Enterprises. All Rights Reserved.

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