Federal Regulation Acquisition writers are asking contractors to weigh in on whether the government-wide cost principle on relocation costs should be revised to expand use of reimbursement of such costs on a lump sum basis.  Currently, FAR 31.205-35 permits the government to reimburse contractors for relocations costs – with the exception of miscellaneous costs – up to the employee’s actual expenses.  For miscellaneous costs, the government may reimburse the contractor a flat or lump- sum amount up to $5,000 (recently increased from $1,000) in lieu of actual costs.  The writers are considering revising the cost principle to give contractors the option to claim relocation costs based on actual costs, a lump sum basis or a combination of the two approaches.  While receipts are not required with a lump sum approach, contractors would still have to show the amount paid are reasonable and appropriate under the circumstances.  Writers want to reduce the administrative costs for contractors and improve employee morale while making sure that permitting lump sum payments in lieu of actual costs do not increase costs to the government.

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