Public Relations and Advertising 31.205-1
Allowable or Unallowable: Unallowable, Allowable
Source: FAR
Contents |
Public Relations [1]
Public relations and advertising costs include the costs of media time and space, purchased services performed by outside organizations, as well as the applicable portion of salaries, travel, and fringe benefits of employees engaged in the functions and activities identified in paragraphs (a) and (b) of this subsection.[2]
Definitions
Media Includes
- Cost of conventions,
- Magazines,
- Trade Papers,
- Exhibits,and
- Newspapers.
Allowable Advertising Costs
(1) Specifically required by contract, or that arise from requirements of Government contracts, and that are exclusively for— (i) Acquiring scarce items for contract performance; or (ii) Disposing of scrap or surplus materials acquired for contract performance;
(2) Costs of activities to promote sales of products normally sold to the U.S. Government, including trade shows, which contain a significant effort to promote exports from the United States. These costs cannot be made allowable, if another FAR provision determines them to be unallowable, such as the costs of memorabilia (e.g., models, gifts, and souvenirs), alcoholic beverages, entertainment, and physical facilities that are used primarily for entertainment rather than product promotion; or
(3) Personnel Recuitment. Costs incurred for personnel recruitement for specific positions or jobs and are black and white.
Unallowable Advertising Costs
- Personnel recruitment advertising that does not list specific jobs or categories, and/or it is color.
- Advertising related to sales promotion (promote sale of products)or company enhancement to include logo items, cups, hats, etc.
Allowable public relations costs include the following:
(1) Costs specifically required by contract.
(2) Costs of—
- (i) Responding to inquiries on company policies and activities;
- (ii) Communicating with the public, press, stockholders, creditors, and customers; and (iii) Conducting general liaison with news media and Government public relations officers, to the extent that such activities are limited to communication and liaison necessary to keep the public informed on matters of public concern such as notice of contract awards, plant closings or openings, employee layoffs or rehires, financial information, etc.
(3) Costs of participation in community service activities (e.g., blood bank drives, charity drives, savings bond drives, disaster assistance, etc.)
(4) Costs of plant tours and open houses.
(5) Costs of keel laying, ship launching, commissioning, and roll-out ceremonies, to the extent specifically provided for by contract.
Unallowable public relations and advertising costs include the following [3]
(1) All public relations and advertising costs, other than those specified in paragraphs (d) and (e) of this subsection, whose primary purpose is to promote the sale of products or services by stimulating interest in a product or product line (except for those costs made allowable under 31.205-38(b)(5)), or by disseminating messages calling favorable attention to the contractor for purposes of enhancing the company image to sell the company’s products or services.
(2) All costs of trade shows and other special events which do not contain a significant effort to promote the export sales of products normally sold to the U.S. Government.
(3) Costs of sponsoring meetings, conventions, symposia, seminars, and other special events when the principal purpose of the event is other than dissemination of technical information or stimulation of production.
(4) Costs of ceremonies such as— (i) Corporate celebrations and (ii) New product announcements.
(5) Costs of promotional material, motion pictures, videotapes, brochures, handouts, magazines, and other media that are designed to call favorable attention to the contractor and its activities.
(6) Costs of souvenirs, models, imprinted clothing, buttons, and other mementos provided to customers or the public.
(7) Costs of memberships in civic and community organizations.
(8) Costs associated with the donation of excess food to nonprofit organizations in accordance with the Federal Food Donation Act of 2008 (Pub. L. 110-247) (see FAR Subpart 26.4).
Unallowable Public Relations Costs
- Public relations costs to maintain, protect, and enhance the image of a concern of a company's products,
- Contractor has control over form, content and timing of Public Relations costs.
