31.205-51
Costs of alcoholic beverages
Costs of alcoholic beverages are strictly unallowable and must never be charged to government contracts.
Overview
- FAR 31.205-51 establishes that any costs incurred for alcoholic beverages are unallowable in government contracts. This means that contractors cannot charge the government for expenses related to the purchase or consumption of alcohol under any circumstances.
Key Rules
- Unallowable Costs
- All costs associated with alcoholic beverages are expressly unallowable and cannot be included in any cost submission, invoice, or reimbursement request to the government.
Responsibilities
- Contracting Officers: Must ensure that no costs for alcoholic beverages are accepted or reimbursed in contract cost submissions.
- Contractors: Must exclude all alcoholic beverage costs from any direct or indirect cost pools charged to government contracts.
- Agencies: Should monitor and audit contractor cost submissions to ensure compliance with this prohibition.
Practical Implications
- This rule exists to prevent the government from subsidizing alcohol consumption, ensuring taxpayer funds are used appropriately.
- Contractors must have internal controls to identify and segregate unallowable costs, including those for alcoholic beverages.
- Common pitfalls include inadvertently including alcohol costs in travel, entertainment, or event expenses—contractors should review expense reports carefully to avoid noncompliance.