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    Can our Federa Contractor under a cost reimbursable contract, allow their employees to go into the community and assist with sand bagging, etc and still claim cost for their salaries as if they were on the job?


    I very much doubt it. The usual response from the Federal government to assist states with natural disasters is to send personnel from federal agencies such as FEMA, and to provide low-cost loans. If anything, FEMA would contract with a disaster recovery company directly to provide employees to help out local communities.  I have never heard of an allowance for employees working on a federal contract to be diverted to disaster relief and get paid under the federal contract, and would astonished to find out that it occurs. Using money appropriated for a specific federal requirement to be spent on an unrelated effort is a violation of federal law, specifically the Misappropriations Act. 

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