(Tab 3.1). The company's 40 guests at the banquet are not identified. the Chief Executives Luncheon was an integral part of the entire program (Tab 15.1b). The company supports this expenditure as being Trade, Business, Technical and Professional Activity Costs under ASPR 15-205.43. (a) Memberships. This category includes costs of The Government resists payment of this and items 14, 15 and 16, infra, on the authority of the Defense Contract Audit Manual published by the Defense Department Audit Agency, Section 11-024 as follows: "Army, Navy and Air Force Associations. The Association and meetings are periodically held by these associations, at which contractors frequently exhibit their products. Occasionally, these conventions or meetings will be sponsored by a contractor or group of contractors. These conventions or meetings are usually held to focus the attention of the public on activities of a particular military service which contribute to national defense programs. In determining the allowability of costs incurred by contractors in connection with these associations the auditor will be guided by the following: (a) Costs related to these associations such as membership fees, exhibit of display costs, and sponsorship expenses do not qualify as allowable under the trade, business, technical or professional activity principle in ASPR 15-205-43." (emphasis added by Government attorney) 14. Air Force Association Convention $500.00 Other The cost here is for 20 tickets (2 tables) for "business associates and customers" at the Honors Night Banquet, a feature of the (20th Anniversary) Annual Convention of the Air Force Association at Dallas, Texas in March 1966 (Tr. 234; Tabs 3.3 and 15.2a). The program featured a master of ceremonies, a guest vocalist, music, presentations, and concluded with three hours of dancing (Tab 15.2a). programmed events throughout the four-day convention were a Board of Directors meeting, an AFA - USAF workshop, opening ceremonies and awards presentation, USAF Command Briefings, reports of committees, an outstanding Airmen dinner, USAF exhibits and static displays, a Chief of Staff luncheon, an anniversary air show, a Vietnam Air War Symposium, an Anniversary luncheon and a Reserve Forces Seminar (Tab 15.2a). The company supports this expenditure under ASPR 15-205.43 (above) and argues, "It is evident that this banquet was an integral part of the business of the convention and not a mere social activity." (Br. p. 69) 15. Association of U. S. Army Annual Meeting $7,125.00 This was the cost of rental space for the same briefing module used at the Air Force Association program described under item 13, above, Tabs 3.4 and 3.5 are supporting business expense reports showing the purpose as display space for the 1966 annual meeting of the Association and the business relationship of individuals or groups involved to be "business associates and potential customers as well as Boeing VIP's (viewers)." The program for this annual meeting (Tab 15.3a) included a sergeant majors' conference, industrial and Army exhibits, a press orientation, a president's report, a president's reception, an ROTC luncheon, sessions devoted to logistic support, fire support for air mobile operations in Vietnam, Medical Support in Vietnam, Status of Training of Selected Reserve Forces, "Making a Man a Soldier," "Other Faces of War," "U. S. Stability Operations in the Dominican Republic," "U. S. Army Border Operations in Germany, awards presentations, chapter delegates and ROTC workshops, and a Memorial Dinner. Resolutions adopted related to Vietnam, Strength of the Army, Status of Reserve Components Units, Defense Against Ballistic Missiles, ROTC Program Development of Youth Leadership, Employment of Retired Military Personnel, Military Pay, Benefits and Retnetion Program and Continuing Resolutions, fourteen in number. In support of allowance, the company's attorneys argue "Boeing's presentation at this meeting used the same facility and was of the same nature as that involved in the AFA development briefings and its purpose was dissemination of technical information - not advertising. As in the case of the AFA, the Association of the U. S. Army is a technical - professional organization and Boeing's rental of space for its technical presentation is again expressly allowable under 15-205.43(c)." (Br., p. 69) 16. Navy League Convention $2,000.00 A brochure of this organization (Tab 4.6d) describes its objectives as follows: "The founders of the Navy League believed then, as we do Boeing is a corporate member of the League. The cost here is identified on a Business Expense Report (Tab 3.6) as "to be used as support to forthcoming convention being held in Santa Monica for business associates and potential customers." The type of activity is stated thereon to be "Cust. Rel." A number of Boeing people attended the convention who were directly interested in Navy business (Tr. 236). The program included the following events (Tab 15.4a): tours of a movie studio, the Naval Ordinance Testing Section, a submarine and a naval station at Long Beach; missile firings, aerial demonstrations and displays at Point Mugu; briefings on current fleet operations; a Marine Corps presentation of a Day in Viet Nam and a Navy/Marine Corps Problems Forum; a Navy Oceanography presentation, all among many other events. Support is claimed for this expenditure under ASPR 15-205.43(c). 17. Society of Experimental Test Pilots Annual Meeting $600.00 This Society explains its genesis, aims and objectives as follows (Tab 15.5a): "The Society of Experimental Test Pilots was conceived in To promote that part of the aeronautical endeavor To promote education of members, of those directly To promote air safety by presenting pilot opinion; to maintain cognizance of new flight equipment already adopted or in development; to exchange ideas, experiences and information regarding airplane escape systems and techniques; and to otherwise aid in the advancement of flight safety. To promote technical advancement by providing for To promote sound aeronautical design and develop- To broaden professional relationships among members; The expenditure here in issue is the cost of 40 seats at the Tenth Annual Symposium and Banquet held in Los Angeles in September 1966 (Tab 3.7). Boeing is a corporate member of the Society and 10 of its test pilots, including its chief test pilot, attended (Tr. 239). The program included presentations on Flight Test Development of the OV-10A, Handling Qualities Evaluation of Seven General Aviation Aircraft, Flight Tests of the First Dual Tandem Ducted Propeller V/STOL (X-22A) and Flight Results with a Non-Aerodynamic, Variable Stability Flying Platform. |