(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.

"15-205.43 Trade, Business, Technical and
Professional Activity Costs

(a) Memberships. This category includes costs of
memberships in trade, business, technical, and
professional organizations. Such costs are allowable.
(b) Subscriptions. This item includes cost of
subscriptions to trade, business, professional, or
technical periodicals. Such costs are allowable.
(c) Meetings and Conferences. This item includes
cost of meals, transportation, rental of facilities
for meetings, and costs incidental thereto, when
the primary purpose of the incurrence of such costs
is the dissemination of technical information or
stimulation of production. Such costs are allowable.

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
of the United States Army, Army Aviation Association of
America, Navy League of the United States, Air Force
Association, and other nonprofit associations with similar
objectives have for many years offered memberships to
contractors. These associations are primarily concerned
with fostering and preserving the images and efficiencies
of the Army, Navy and Air Force. They operate outside
Government channels in an endeavor to preserve a spirit
of fellowship among former and present service members and
to inform and arouse the interests of the public in
activities and achievements of their respective military
services. Generally, memberships are offered to contractors
that wish to support the objectives of these associations.
The membership dues often include a subscription to pub-
lications issued periodically for example, the Association
of the United States Army publishes monthly a magazine
entitled ARMY. It includes numerous articles primarily
designed to enhance Army personnel programs and to promote
manpower and combat readiness. In addition, conventions

These

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.
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 sponsor-
ship 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

The cost here is for 20 tickets (2 tables) for "business associates and customers" at the Honors Night Banquet, 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

Other

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
now, that in order to maintain a sound defense posture
we must have the ability to control the seas in time of
war,
to assure access forour country and our allies to
the sea lanes of the world and, at the same time, deny
them to any enemy. The objectives of the League are
very clearly defined: First, we must foster and main-
tain interest in a strong Navy and Marine Corps as
integral parts of a sound national defense. Second, we
must constantly keep before the American people the
role of seapower in the nuclear age and, in addition,
keep our members informed of the problems which our
defense planners face. Third, we assist the Navy Depart-
ment in every way possible in the fields of public informa-
tion, recruiting and community relations."

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
1955, when a small group of contractor test pilots, who
were then engaged on flight testing projects at Edwards
Air Force Base, met to discuss the desirability of organiz-
ing a professional association that would assist in the
interchange of ideas and experience and promote other
objectives that would enhance the test pilots' contribu-
tions to aeronautical progress. After an arduous series
of successive meetings, the Society was incorporated in
September 1956 with the expanded aims and objectives set
forth, as follows:

To promote that part of the aeronautical endeavor
wherein there lies the moral obligation of the
test pilot to the airplane passenger, the commercial,
private and service pilot, without affecting the com-
petitive structure of industry.

To promote education of members, of those directly
associated with aeronautical problems, and of the
general public concerning those problems peculiar
to the work of the experimental test pilot and other
professional pilots.

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 air-
plane escape systems and techniques; and to other-
wise aid in the advancement of flight safety.

To promote technical advancement by providing for
professional education through lectures, displays
and presentations and by the exchange of informa-
tion for mutual development of improved test
techniques.

To promote sound aeronautical design and develop-
ment; to describe and discuss newly encountered
phenomena in the realm of flight for the mutual
benefit of all, within the bounds of the primary
purpose of this corporation and governmental
security regulations; and to provide a society
where the interchange of ideas, thoughts, and
suggestions concerning the aircraft as it affects
the pilot will ultimately result in aid to the
designer.

To broaden professional relationships among members;
to maintain and increase the prestige, standing
and influence of the test pilot in aeronautical
progress; to assist in the obtaining of new pilot
trainees; to provide scholarships and otherwise
aid the families of deceased members; to provide
scholarships and otherwise aid members in receiving
education and graduate work in flight technique
and safety; and to otherwise contribute to aeronauti-
cal advancement.

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.