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2/7/85 CHAPTER 4. METHODS OF CONTRACTING AND ALLOWABLE COSTS 23. GENERAL. The computation of charges and compensation methods for consultant services are dependent on the type of services required and specific circumstances relating to the individual project. The various types of contracts and methods of compensation are discussed below. Contracts may be negotiated to include a combination of two or more of these methods. 24. PER DIEM. a. Direct personal services are usually charged on a per diem basis. This method is particularly suited to court work or similar efforts involving intermittent personal service. b. When such consulting or expert services are furnished, the consultant is compensated for the time devoted to the work and to travel time. The per diem charge should be based on the complexity of the work involved and the experience of the consultant. In addition to the compensation based on per diem, the consultant is reimbursed for travel and other out-of-pocket expenses incurred while away from the normal place of business provided they are reasonable, allocable, and of a generally allowable nature. c. For services in court or on other engagements in which the consultant appears as an expert, a per diem charge is considered to be earned for each day of such appearance, although the consultant may not be called to testify or, if called, may finish his/her testimony in a fraction of the day. d. On occasions, the urgency of the engagement requires the consultant to work longer than the normal day. In some instancs, this requirement is a necessary feature of the services, and an understanding should be made with the sponsor as to what constitutues a day. In such cases, the per diem rate may be based on the normal number of working hours per day, or the per diem rate may be increased to take into consideration the extended work day. e. For certain kinds of work, compensation based on hourly rates is an equitable arrangement. Compensation for consultant service on an hourly basis demands a higher rate per hour than would be represented in a per diem rate. Also, the hourly rates should apply to time for travel involved plus reimbursement for travel costs, subsistence, and other out-of-pocket expenses. Depending on the duration of the services, compensation on an hourly basis may include an agreement on a preset minimum amount or retainer in addition to the payments based on the hourly rates. f. If preparation of an environmental impact assessment report is involved in the consultant services, determination of the fee for the public hearing portion of the procedures could present a problem since extensive hearings and followup work may be required. In these instances the per diem approach may be considered as an appropriate method of payment for services rendered subsequent to the initial hearing. An estimated upper limit should be set forth in the contract. The contract should provide for renegotiation of the upper limit if unforeseeable conditions are encountered. Chap 2 Par 23 19