(Pub. L. 111–350, § 3,Jan. 4, 2011, 124 Stat. 3785.)
Historical and Revision Notes
| Revised Section
|| Source (U.S. Code)
|| Source (Statutes at Large)
|June 30, 1949, ch. 288, title III, § 306(e), as added Pub. L. 100–700, § 8(a)(1), Nov. 19, 1988, 102 Stat. 4634; Pub. L. 103–355, title II, § 2151, Oct. 13, 1994, 108 Stat. 3310; Pub. L. 105–85, title VIII, § 808(b)(1), Nov. 18, 1997, 111 Stat. 1836.
Revision of Cost Principle Relating to Entertainment, Gift, and Recreation Costs for Contractor Employees
Pub. L. 103–355
, title II, § 2192,Oct. 13, 1994, 108 Stat. 3315
, provided that:
“(a) Costs Not Allowable.—(1) The costs of gifts or recreation for employees of a contractor or members of their families that are provided by the contractor to improve employee morale or performance or for any other purpose are not allowable under a covered contract unless, within 120 days after the date of the enactment of this Act [Oct. 13, 1994], the Federal Acquisition Regulatory Council prescribes amendments to the Federal Acquisition Regulation specifying circumstances under which such costs are allowable under a covered contract.
“(2) Not later than 90 days after the date of the enactment of this Act, the Federal Acquisition Regulatory Council shall amend the cost principle in the Federal Acquisition Regulation that is set out in section
31.205–14 of title 48, Code of Federal Regulations, relating to unallowability of entertainment costs—
“(A) by inserting in the cost principle a statement that costs made specifically unallowable under that cost principle are not allowable under any other cost principle; and
“(B) by striking out ‘(but see 31.205–1 and 31.205–13)’.
“(b) Definitions.—In this section:
“(1) The term ‘employee’ includes officers and directors of a contractor.
“(2) The term ‘covered contract’ has the meaning given such term in section
, United States Code (as amended by section
[2101(d)]), and section 306(l) of the Federal Property and Administrative Services Act of 1949 (as added by section
2151) [see 41
“(c) Effective Date.—Any amendments to the Federal Acquisition Regulation made pursuant to subsection (a) shall apply with respect to costs incurred after the date on which the amendments made by section
apply (as provided in section
10001 [set out as an Effective Date of 1994 Amendment note under section
, Armed Forces]) or the date on which the amendments made by section
2151 apply (as provided in section
10001), whichever is later.”
Ex. Ord. No. 13494. Economy in Government Contracting
Ex. Ord. No. 13494, Jan. 30, 2009, 74
, as amended by Ex. Ord. No. 13517, § 2, Oct. 30, 2009, 74
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Federal Property and Administrative Services Act, 40
et seq., it is hereby ordered that:
Section 1. To promote economy and efficiency in Government contracting, certain costs that are not directly related to the contractors’ provision of goods and services to the Government shall be unallowable for payment, thereby directly reducing Government expenditures. This order is also consistent with the policy of the United States to remain impartial concerning any labor-management dispute involving Government contractors. This order does not restrict the manner in which recipients of Federal funds may expend those funds.
Sec. 2. It is the policy of the executive branch in procuring goods and services that, to ensure the economical and efficient administration of Government contracts, contracting departments and agencies, when they enter into, receive proposals for, or make disbursements pursuant to a contract as to which certain costs are treated as unallowable, shall treat as unallowable the costs of any activities undertaken to persuade employees—whether employees of the recipient of the Federal disbursements or of any other entity—to exercise or not to exercise, or concerning the manner of exercising, the right to organize and bargain collectively through representatives of the employees’ own choosing. Such unallowable costs shall be excluded from any billing, claim, proposal, or disbursement applicable to any such Federal Government contract.
Sec. 3. Contracting departments and agencies shall treat as allowable costs incurred in maintaining satisfactory relations between the contractor and its employees (other than the costs of any activities undertaken to persuade employees to exercise or not to exercise, or concerning the manner of exercising, the right to organize and bargain collectively), including costs of labor management committees, employee publications, and other related activities. See 48 C.F.R. 31.205–21.
Sec. 4. Examples of costs unallowable under section 2 of this order include the costs of the following activities, when they are undertaken to persuade employees to exercise or not to exercise, or concern the manner of exercising, rights to organize and bargain collectively:
(a) preparing and distributing materials;
(b) hiring or consulting legal counsel or consultants;
(c) holding meetings (including paying the salaries of the attendees at meetings held for this purpose); and
(d) planning or conducting activities by managers, supervisors, or union representatives during work hours.
Sec. 5. Within 150 days of the effective date of this order, the Federal Acquisition Regulatory Council (FAR Council) shall adopt such rules and regulations and issue such orders as are deemed necessary and appropriate to carry out this order. Such rules, regulations, and orders shall minimize the costs of compliance for contractors and shall not interfere with the ability of contractors to engage in advocacy through activities for which they do not claim reimbursement.
Sec. 6. Each contracting department or agency shall cooperate with the FAR Council and provide such information and assistance as the FAR Council may require in the performance of its functions under this order.
Sec. 7. (a) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(b) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Sec. 8. This order shall become effective immediately, and shall apply to contracts resulting from solicitations issued on or after the effective date of the action taken by the FAR Council under section 5 of this order.