DOD Explicitly Disallows Fringe Benefit Costs Contrary to Law, Agreement, or Policy

February 19, 2014

DOD Explicitly Disallows Fringe Benefit Costs Contrary to Law, Agreement, or Policy

On December 6, 2013, the Department of Defense (DOD) issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS). The final rule adds paragraph (m)(1) to DFARS 231.205-6 to explicitly characterize fringe benefit costs contrary to law, employer-employee agreement, or established contractor policy as unallowable. The final rule implements the director of defense’s pricing policy memo, “Unallowable Costs for Ineligible Dependent Health Care Benefits,” but is applicable to all fringe benefits and not just health care benefits. This final rule became effective December 6, 2013. (78 Fed. Reg. 73451, 12/6/2013.)






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