Defense Reutilization and Marketing Service Awards

B-270327 Mar 12, 1997 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights We have approved the payment of reasonable ceremonial expenses. The $20 per employee expense limitation set by DRMS in connection with presentation of the awards is not inconsistent with the Incentive Awards Act or implementing regulations. BACKGROUND DRMS is a field activity of the Defense Logistics Agency (DLA). Whose primary mission is to redistribute or sell surplus personal property generated by the Department of Defense. DRMS will host luncheons for all its employees around the world and will provide each employee a specially designed 'Bucks Bunny' and 'Reut Rabbit' t-shirt. The vouchers are annotated as being for refreshments incident to an awards ceremony. Or other party establishment for the luncheon that was described by the DRMS Commander in his December letter. View Decision Matter of: Defense Reutilization and Marketing Service Awards Ceremonies File: B-270327 Date: March 12, 1997 DIGEST DECISION Mr. Richard F. Keevey, Director of the Defense Finance and Accounting Service (DFAS), requests an advance decision regarding the propriety of paying certain vouchers for the expenses of luncheons provided to Defense Reutilization and Marketing Service (DRMS) employees attending awards ceremonies recognizing the accomplishments of DRMS employees around the world. For the reasons set forth below, DFAS may pay these vouchers. BACKGROUND DRMS is a field activity of the Defense Logistics Agency (DLA), whose primary mission is to redistribute or sell surplus personal property generated by the Department of Defense. Prior to fiscal year 1994, DRMS consumed substantially more funds than it generated. For example, in fiscal year 1993, DRMS' expenditures exceeded its deposits by $91.7 million. In an effort to reduce DRMS' operating cost, the Department of Defense designated DRMS as a "Re-invention Laboratory" with a charter to explore new and more business-like practices. For fiscal year 1994, DRMS deposits exceeded its expenditures by $17 million, a swing of nearly $109 million. In recognition of this performance, DRMS granted awards to each of its employees, designated each Defense Reutilization and Marketing Office (DRMO) as "DRMO of the Year," and authorized each DRMO to host luncheons to recognize the accomplishments of its employees. The December 7, 1994 message from the Commander of DRMS announcing the "DRMS Celebration Day" states, in part, as follows: "Since every person on the world-wide DRMS team deserves recognition for these spectacular achievements, 13 January 1995 has been formally designated as 'DRMS Celebration Day.' On that date, DRMS will host luncheons for all its employees around the world and will provide each employee a specially designed 'Bucks Bunny' and 'Reut Rabbit' t-shirt. Upon conclusion of these luncheons, I want each of you to enjoy a well deserved four hours of administrative leave." In addition to the luncheon, tee-shirts, and leave, DRMS paid out over $4.1 million in monetary awards agencywide. Nearly all of DRMS' employees received a monetary award. A December 9, 1994 DRMS message provided guidance for the January 13, 1995 "Awards Recognition Ceremony." The message, which cited our decision at 65 Comp.Gen. 738 (1986), authorized each DRMS location to spend up to $20 per person for accommodations and "incidental refreshments" in connection with the award ceremonies. DFAS described the vouchers submitted to it by DRMS as follows: "In almost all cases, the vouchers are annotated as being for refreshments incident to an awards ceremony. The vouchers generally contain no information concerning the awards ceremony. The receipts supporting the vouchers, however, typically reflect the fact that groups of DRMS employees went to a local restaurant, hotel, or other party establishment for the luncheon that was described by the DRMS Commander in his December letter. In one case, the voucher and supporting receipts is for a luncheon cruise for 135 employees. In another case, DRMS entered into a contract with a Golf Club to host the luncheon for all the employees of the DRMS headquarters." DRMS takes the position that the luncheon expenditures were appropriate "incidental expenditures" to the presentation of awards, and as such are authorized by the Government Employees' Incentive Awards Act (GEIAA or the Act), 5 U.S.C. Secs. 4501-4507 (1994). In its submission to us, DFAS notes that "what constitutes refreshments has not been clearly defined." Accordingly, DFAS asks whether it may consider "payment of full meals for every employee of the agency . . .