Per diem is limited by the IRS to a certain dollar amount per day that is determined by the area you are working in. Ex: When I contracted in Sacramento, CA, I was entitled to less per diem than when I worked in San Francisco.

If you go this route, you may need to explain it to your clients' HR department. I always negotiated a flat rate (say $75/hour), then asked for the first $150 - $200 day as per diem. When necessary, I explained that I worked all of my contracts this way and if they didn't want to play I would expect a larger per hour fee to compensate for the taxes.

Once they realized I was just using a tax break and it didn't actually cost them anything, I was never turned down.

On the other hand, if you get audited, you better have receipts to back up the $200 a day in expenses or expect to pay taxes!