This post in made possible with the kind assistance, and expert review by Krista Pages.
Just to make you all feel better about not knowing all of
these answers off hand, remember this:
In order to compile this information, we have had to comb through the following sources:
In order to compile this information, we have had to comb through the following sources:
- Federal Acquisition Regulations (FAR)
- 2 C.F.R. 200 Uniform Guidance for Grants and Cooperative Agreements
- USAID ADS 303 Mandatory Provisions for US Recipients
- ADS 302 Mandatory References and Additional Help
- AIDAR
- The Office of International Aviation Information Blog
- U.S. Department of State Open Skies Agreements Webpage
- GSA Open Skies Information Page for Fly America application
- GSA Help Desk to answer burning questions about all the “other Open Skies” nobody has an answer to
- Department of Transportation Air Agreements Information
- Federal Registrar for Comptroller General Notices
- DCAA Guidance Webpages
- Federal Travel Regulations and
- Finally USAID Internal Policies and Internal Memos to Contracting and Agreement Officers
Just saying…. How could anyone know (or for that matter: want
to know) that they have to study all these regulations just to find an answer
for every question that arises about whether a certain flight will be allowed
or not?
This blog was created to show the benefit of having common
information and interpretation in one place, which, if done by an official source, would be so helpful for all
the stakeholders - Auditors, Contracting
Officers, Contractors, Grantees and finally tax payers – and save us all so
much money and aggravation!
No pride in ownership – GSA, please take notice, you can do this for the Government wide coverage!
Anyway…. this is a very long blog post because there are a
lot of frequently asked questions and we wanted to put it all in one place for
ease of reference.
The best way to explain the confusing travel cost principle
and Fly America requirements is through the kind of questions that we all face
all the time from our employees, and an answer to which is normally met with an
inevitable “Why? This does not make any
sense!”
We cannot help you with the second part, but perhaps
answering with a link to this blog would alleviate some of the pain:
FLY AMERICA ACT
What is the Fly America Act and
why is my travel subject to this? I can
fly my native Nauru Airline for so much cheaper?
Federal travelers are required by 49 U.S.C. 40118
(International Air Transportation Fair Competitive Practices Act), commonly
referred to as the "Fly America Act," to use United States air
carrier service for all air travel and cargo transportation services funded by
the United States Government.
USAID grantees are bound by Fly America
Act through application of a standard provision at ADS 303 Mandatory Standard
Provisions for US Recipients M-17 “TRAVEL
AND INTERNATIONAL AIR TRANSPORTATION (AUGUST 2013)”
USAID contractors, are bound by Fly America through FAR clause 52.247-63 included in their contracts.
What airlines are qualified to
provide passenger service under Fly America Rules?
In general, all airlines based in the United States qualify.
Specifically, a US flag air carrier is one that holds a certificate under
section 401 of the Federal Aviation Act of 1958. If you have questions on
a particular airline, you can search this database. Some non-US based airlines also qualify
through air transport agreements between foreign carrier and the US Government,
such as the United States-European Union “Open Skies” agreement (www.gsa.gov/openskies ) See more below.
What about code-shares?
Travelers are allowed to fly on code share flights operated
by foreign carriers. A flight qualifies if your ticket identifies the U.S.
carrier. For example: “AA 1234 operated by SAA 567” (AA = American Airlines,
SAA = South African Airways).
How do
I determine if a flight is a code share flight?
Tickets/electronic receipts include the information
necessary to determine if a flight is a qualifying code share. Tickets must use
the code of a U.S. carrier (e.g. NWA, UA, AA) in addition to the foreign
carrier code.
The US Comptroller General issued a decision on September
25, 1991 which states in part:
Travel under a ticket issued by a US-flag air carrier
which leases space on a foreign-flag air carrier under a code-share arrangement
is allowable. The ticket (or documentation for an electronic ticket) must
identify the US-flag air carrier's designator code and flight number. The requirement
that the ticket be issued from U.S.-flag carrier ticket stock is no longer
applicable."
Therefore, the ticket DOES NOT have to be on the US Flag
Carrier stock or issued by the US Flag Carrier but it MUST have the US Flag
Carrier Code for the flight in addition to the foreign carrier code (for
example AA142/SAA207)
What are the exceptions to this
requirement?
Grantees:
ADS 303 Mandatory Standard Provisions for US Recipients M-17 “TRAVEL AND INTERNATIONAL AIR TRANSPORTATION (AUGUST 2013)” lists the following exceptions:
ADS 303 Mandatory Standard Provisions for US Recipients M-17 “TRAVEL AND INTERNATIONAL AIR TRANSPORTATION (AUGUST 2013)” lists the following exceptions:
- Only for a particular leg of a route on which no US Flag Air Carrier provides service on that route;
- For a trip of 3 hours or less, when the use of a US Flag Air Carrier at least doubles the travel time;
- If he US Flag Air Carrier offers direct service, but the use of the US Flag Air Carrier would increase the travel time by more than 24 hours; or
- If the US Flag Air Carrier does not offer direct service and
o
Use of the US Flag Air Carrier increases the
number of aircraft changes by 2 or more,
o
Use of the US Flag Air Carrier extends travel
time by 6 hours or more, or
o
Use of the US Flag Air Carrier requires a
layover at an overseas interchange of 4 hours or more.
- If the carrier is covered by an air transport agreement between the US and a foreign government that allows for the flight route you are taking.
Contractors:
In addition,
when flying between the United States and a foreign location, the following exceptions apply:
If a U.S. flag air carrier offers nonstop or
direct service (no aircraft change) from your origin to your destination, you
must use the U.S. flag air carrier service unless such use would extend your
travel time, including delay at origin, by 24 hours or more.
If a U.S. flag air carrier does not offer nonstop or direct service (no aircraft change) between your origin and your destination, you must use a U.S. flag air carrier on every portion of the route where it provides service unless, when compared to using a foreign air carrier, such use would:
·
Increase the number of aircraft changes you must
make outside of the U.S. by 2 or more; or
· Extend your travel time by at least 6 hours or more; or
· Require a connecting time of 4 hours or more at an overseas interchange point.
When flying between two foreign destinations and U.S. service is available, you may use a foreign air carrier if such use would:
· Increase the number of aircraft changes you must make en route by 2 or more; or
· Extend your travel time by 6 hours or more; or
· Require a connecting time of 4 hours or more at an overseas interchange point
· If use of a foreign air carrier may, in certain circumstances, be deemed necessary for medical or safety reasons,
· Finally, if the carrier is covered by an air transport agreement between the US and a foreign government that allows for the flight route you are taking.
Where does it say we are allowed to fly EU Airline and other non-US carriers?
For USAID Contractors: FAR clause 52.247-63 under its prescription at FAR 47.403-1 "Availability and Unavailability of U.S.-flag air carrier service" includes exceptions to use of US Flag Carrier including:
"Nothing in the guidelines of the Comptroller General (see 47.403) shall preclude, and no penalty shall attend, the use of a foreign-flag air carrier that provides transportation under an air transport agreement between the United States and a foreign government, the terms of which are consistent with the international aviation policy goals at 49 U.S.C. 1502(b) and provide reciprocal rights and benefits".
What countries are included in the EU Open Skies Agreement?
Do all Open Skies Agreements and associated country airlines qualify under Fly America?
No, at this writing only the EU Open Skies Agreement Countries (see above) and Australia, Japan and Switzerland (with restrictions) qualify as exceptions to Fly America Act.
Does purchasing lowest priced airfare mean you should purchase non-refundable tickets?
What is “travel during unreasonable hours”?
What is “circuitous routing”?
If a U.S. flag air carrier does not offer nonstop or direct service (no aircraft change) between your origin and your destination, you must use a U.S. flag air carrier on every portion of the route where it provides service unless, when compared to using a foreign air carrier, such use would:
· Extend your travel time by at least 6 hours or more; or
· Require a connecting time of 4 hours or more at an overseas interchange point.
When flying between two foreign destinations and U.S. service is available, you may use a foreign air carrier if such use would:
· Increase the number of aircraft changes you must make en route by 2 or more; or
· Extend your travel time by 6 hours or more; or
· Require a connecting time of 4 hours or more at an overseas interchange point
· If use of a foreign air carrier may, in certain circumstances, be deemed necessary for medical or safety reasons,
· Finally, if the carrier is covered by an air transport agreement between the US and a foreign government that allows for the flight route you are taking.
Where does it say we are allowed to fly EU Airline and other non-US carriers?
USAID grantees in
the same standard provision at ADS 303 Mandatory Standard Provisions for US
Recipients M-17 “TRAVEL
AND INTERNATIONAL AIR TRANSPORTATION (AUGUST 2013)”, under paragraph (c)
(2) (i) and (ii) the following exception:
The recipient [ is exempt] if it
uses a European Union (EU) flag air carrier, which is an airline operating from an EU country that
has signed the US-EU “Open Skies” agreement
Or
(ii) Travel to or from one of the following
countries on an airline of that country when no city pair fare is in effect for
that leg (see 07/21/2014 Partial Revision GSA Open Skies):
a. Australia on an Australian
airline,
b. Switzerland on a Swiss airline,
or
c. Japan on a Japanese airline
For USAID Contractors: FAR clause 52.247-63 under its prescription at FAR 47.403-1 "Availability and Unavailability of U.S.-flag air carrier service" includes exceptions to use of US Flag Carrier including:
"Nothing in the guidelines of the Comptroller General (see 47.403) shall preclude, and no penalty shall attend, the use of a foreign-flag air carrier that provides transportation under an air transport agreement between the United States and a foreign government, the terms of which are consistent with the international aviation policy goals at 49 U.S.C. 1502(b) and provide reciprocal rights and benefits".
Some of the Open
Skies agreements meet the requirements of 49 U.S.C. 1502 (b).
What is Open Skies Air
Transportation Agreement?
The Office of International Aviation and the U.S. Department
of State negotiate bilateral and multilateral air service agreements with the
United States’ foreign aviation partners. Such agreements provide the
basis for airlines of the countries involved to provide international air
services for passengers, cargo and mail. Through air service agreements,
the United States develops a procompetitive operating environment for U.S.
airline services between the United States and foreign countries.
Since 1992, The Office of International Aviation and the
U.S. Department of State and have
pursued an “open-skies” policy designed to eliminate government involvement in
airline decision-making about routes, capacity, and pricing in international
markets. Open-Skies agreements also contain provisions governing
commercial opportunities, safety, and security. The United States has
negotiated open-skies agreements with more than 100 aviation partners.
Which Open Skies Agreements
provide an Exception to Fly America Act?
The biggest exception to the Fly America Act is the Open
Skies Agreement with the European Union as amended.
The United States and European Union (EU) “Open Skies” Air
Transport Agreement published here Open Skies Agreements
qualifies under the exception to Fly America Act, which means that all the
airlines of the countries listed in the agreement can be substituted for
US-Flag Carries on international flights taken by USAID contractors and
Grantees. As of June 2011, Iceland and Norway are also included
in the EU Open Skies agreement and qualify under Fly America as well.
There are also Open Skies Travel Agreements with Australia, Japan and Switzerland, which
qualify as exceptions under Fly American Act, but they carry additional
restrictions as to the exact routes and city-pair limitations explained
further.
All other Open Skies Agreements are more restrictive and do
not qualify as an exception under Fly America Act.
Here are the details of qualifying agreements under Fly
America exception:
European Union
Airlines and Free Trade Association (EFTA) member states Norway and Iceland:
You can use US Flag or an EU airline when traveling to a
destination serviced by a European Union airline included in Open Skies
Agreement (this means all destinations serviced by EU airlines, including
between two points outside the US and also from and to US from EU or any other
foreign point serviced by the qualifying EU airline).
Australia:
Travelers using federal dollars can use an Australian
airline only if a point of origin/destination is either the US or Australia and
there is no city-pair contract flight between the two points (origin and
destination).
Switzerland
Travelers using federal dollars can use a Swiss airline only
if a point of origin/destination is either the US or Switzerland and there is
no city-pair contract flight between the two points (origin and destination).\
Japan
Travelers using federal dollars can use a Japanese airline
only if a point of origin/destination is either the US or Japan and there is no
city-pair contract flight between the two points (origin and destination).
What countries are included in the EU Open Skies Agreement?
Austria (1995)
Belgium (1952)
Bulgaria (2007)
Croatia (2013)
Cyprus (2004)
Czech
Republic (2004)
Denmark (1973)
Estonia (2004)
Finland (1995)
France (1952)
Germany (1952)
Greece (1981)
Hungary (2004)
Ireland (1973)
Italy (1952)
Latvia (2004)
Lithuania (2004)
Luxembourg (1952)
Malta (2004)
Netherlands (1952)
Poland (2004)
Portugal (1986)
Romania (2007)
Slovakia (2004)
Slovenia (2004)
Spain (1986)
Sweden (1995)
United
Kingdom (1973)
and
Norway
Iceland (June 2011)
Do all Open Skies Agreements and associated country airlines qualify under Fly America?
No, at this writing only the EU Open Skies Agreement Countries (see above) and Australia, Japan and Switzerland (with restrictions) qualify as exceptions to Fly America Act.
Do you have to fly only to EU
destinations on an EU Open Skies listed airline for the flight to qualify as an
exception to the Fly America Act?
No, that restriction was lifted on June 24, 2010 when the
U.S. – EU Open Skies Agreement was amended (see GSA Federal Travel Regulation
Bulletin 11-02 issued October 6, 2010). Now contractors/grantees can fly to any
destination served by the qualifying EU airline under the Open Skies Agreement,
including flights originating, arriving or stopping in the EU (for example from
Miami to Munich to Ankara or from Atlanta to Mexico City on a flight that
operates from Frankfurt to Atlanta to Mexico City).
Do I have to check city-pairs
fare to qualify for Open Skies?
No - for airlines under the EU Open Skies Agreement (this requirement
was removed in the June 2010 amendment to EU Open Skies Agreement). Yes - for flights on Japan, Australia or
Switzerland airlines.
City- Pairs are set fares available to US Government
personnel and not available to contractors, however the contractors/grantees
still have to check if such fares are available before they are able to use the
exception to Fly America when using Australia, Japan and Switzerland airlines.
ALLOWABLE AIRFARES
What class of travel is allowable
under the FAR Cost Principles?
FAR 31.2205-46(b) and 2 CFR 200.474 generally limits the
allowable cost for air travel to the lowest priced airfare available to the
contractor (after consideration of any negotiated discounts, rebates, or other
cost savings.)
Are there any exceptions to the
lowest priced airfare available requirement?
Costs in excess of cheapest available airfare during regular
business hours are not allowable, however, if the costs are documented and
justified and fall within one or more of the exceptions contained in the
rule, they should be allowable.
Once the baseline airfare cost is established (cheapest
airfare available during regular business hours), a higher cost fare is
nonetheless allowable if certain conditions are met.
For both Contractors and Grantees the conditions are the
same:
FAR 31.205-46(b):
Airfare costs in excess of the lowest priced airfare
available to the contractor during normal business hours are unallowable except
when such accommodations require circuitous routing, require travel during
unreasonable hours, excessively prolong travel, result in increased cost that
would offset transportation savings, are not reasonably adequate for the
physical or medical needs of the traveler, or are not reasonably available to
meet mission requirements. However, in order for airfare costs in excess of the
above airfare to be allowable, the applicable condition(s) set forth above must
be documented and justified.
2 CFR 200.474 (d)
Commercial air travel. (1) Airfare costs in
excess of the basic least expensive unrestricted accommodations class offered
by commercial airlines are unallowable except when such accommodations would:
(i) Require circuitous routing;
(ii) Require travel during unreasonable hours;
(iii) Excessively prolong travel;
(iv) Result in additional costs that would offset the
transportation savings; or
(v) Offer accommodations not reasonably adequate for the
traveler's medical needs. The non-Federal entity must justify and document
these conditions on a case-by-case basis in order for the use of first-class or
business-class airfare to be allowable in such cases.
What do the exceptions to “lowest
priced airfare” mean and how can the exceptions be applied practically to
international travel under USAID programs?
Below I break
down some of the commonly asked questions that get to the exceptions.
Does purchasing lowest priced airfare mean you should purchase non-refundable tickets?
Yes, in response to public comments on the revised cost
principle, the FAR Councils affirmed that applying the “lowest priced airfare”
could mean purchasing non-refundable tickets and the cost for changing such
tickets or cancellation surcharges would be allowable costs. See comments and responses here: Revised
Travel Cost Principle Public Comments
However, see DCAA guidance on documentation of airfare discussed
further below
Can I book any refundable or non-refundable ticket in economy and not the cheapest one available so that I can upgrade it with miles or additional payment?
Can I book any refundable or non-refundable ticket in economy and not the cheapest one available so that I can upgrade it with miles or additional payment?
No, you must always buy the lowest
priced airfare available for travel during business hours, unless any of the
exceptions discussed further apply.
What does “normal business hours” mean when traveling internationally?
What does “normal business hours” mean when traveling internationally?
Ideally, normal business hours will be defined by your
company’s hand-book. Hours outside 8:00
am and 7:00 pm would probably not be “normal business hours,” unless the employee
works an unusual workday. If any of the travel extends outside of normal
business hours, you can justify something beyond the “lowest available fare,”
but should keep records to justify the selected fare and all of the exceptions
it meets to the rule.
Hypothetical: If the only available fare on the date of
travel during the business hours (let’s say at 2 pm) is in business or premium
class, it could be justified even if a lower fare is available at midnight, provided
you show more of the travel is within normal business hours as defined
in your company’s handbook. Allowability
boils down to whether the more expensive fare is reasonable under the circumstances.
What is “travel during unreasonable hours”?
A more expensive fare flight that extends beyond normal business
hours, requires overnight flying, or exceeds a defined maximum reasonable
travel duration set by your company
policy (for example: 14 hours or more –
like USAID travel policy) should be allowable where properly documented. If a 4 pm flight arrives at your destination
at least 3 hours earlier, limiting the time you travel outside normal business
hours, and includes “unreasonable” hours (such as an overnight flight), you
could justify premium (let’s say “Economy Plus” or “Premium Economy”) or Business
Class since it affords a more reasonable accommodation for the hardship of
travel during unreasonable hours.
Also, if business class was the only available fare when you
learned the need to travel, you could justify business class fare as the “cheapest”
as long as your travel policies assure pre-planning/pre-booking travel to the
maximum extent possible.
What is “circuitous routing”?
The avoidance of “circuitous routing”
is a justification for taking a more expensive flight, but would not unto itself
justify business class if the total duration of travel was the same or nearly
the same. The example would be if you
there were two flights available on the day that you need to travel and one
flight was direct with one stop over but only available in business class and
the other was cheaper in economy but required you to make additional stop-overs
and change of planes, you would be justified in documenting “circuitous
routing” as the exception to taking a more expensive business class flight.
What is “adequate medical needs of traveler”?
What is “adequate medical needs of traveler”?
The physical needs of travelers, including the need for rest
during extended flights overseas, requires the comfort and accommodations of a
higher class of travel including Business Class. All such medically required needs must be
documented with a copy of physician or other medical professional’s letter
confirming the need for such exception.
No detailed medical information is required and should not
be asked for due to privacy requirements under HIPAA (the HIPAA Privacy Rules established national standards to
protect individuals' medical records and other personal health information and
applies to health plans, health care clearinghouses, and those health care
providers that conduct certain health care transactions electronically.
What is the best way for Contractors to allow consideration of other than economy class travel if circumstances warrant it?
What is the best way for Contractors to allow consideration of other than economy class travel if circumstances warrant it?
In summary, the best practice for invoking exceptions
to the “lowest available airfare” restriction requires a written travel policy
defining “normal business hours” and “reasonable travel duration hours” within
the employee manual and discussing the available alternative travel
arrangements if travel takes place outside such hours or exceeds the duration,
defined as “reasonable”.
It
should be applied equally at all levels of the organization --airfares for executives
traveling in business class need the same justification as the rank and file employees;
otherwise the excess portion of the executive’s business class fare is unallowable.
USAID’s direct employee policy, for example, allows premium
class travel for travel exceeding 14 hours or when it is more expensive to
break up the travel and pay per diem and travel time under a lower fare ticket
than flying business class directly.
What is the downside of the
Contractor’s policy mirroring USAID’s policy for its employees?
The problem with having the same policy as USAID and
mandating business class travel for all trips over 14 hours in duration is the
cost. Since the policy is meant to apply
equally to all employees under all programs, you would not be able to only
offer economy or cheapest fare under the programs that do not have the budget
to cover a more expensive class… That
would not be a fair policy and violate the rule of treating the US Government
fairly when incurring costs.
This in turn will make your company less competitive on the
price and probably result in long arguments during negotiations and potential
loss of work.
USAID confirms and recognizes the same issue in its guidance to its Contracting and Agreement officers codified in ADS 302 Mandatory Reference dated 5/5/2006 - See Guidance to Contracting Staff Regarding Business Class Travel for Contractors
"If you agree to a contract/TO budget that reflects a reasonable number of trips and travelers at standard/ economy airfare that is sufficient to meet the requirements of the work needed in the Statement of Work, then why not let it go at that? Allow the contractor to manage the travel funds in accordance with the terms of the contract, including the relevant cost principle. If a situation arises during performance for which the contractor can document and justify using business class and doing so complies with the cost principle--and doesn't result in any increased cost to the contract--then it's their business decision to do so".
USAID confirms and recognizes the same issue in its guidance to its Contracting and Agreement officers codified in ADS 302 Mandatory Reference dated 5/5/2006 - See Guidance to Contracting Staff Regarding Business Class Travel for Contractors
"If you agree to a contract/TO budget that reflects a reasonable number of trips and travelers at standard/ economy airfare that is sufficient to meet the requirements of the work needed in the Statement of Work, then why not let it go at that? Allow the contractor to manage the travel funds in accordance with the terms of the contract, including the relevant cost principle. If a situation arises during performance for which the contractor can document and justify using business class and doing so complies with the cost principle--and doesn't result in any increased cost to the contract--then it's their business decision to do so".
What is the alternative approach to
allow flexibility?
A better approach may be to have the following exceptions to
your “lowest priced airfare” policy (apart from the medical need, which is
pretty straightforward):
Travel outside of regular business hours – if travel
is required on a certain date and pre-planning has been accomplished to maximum
extent possible, allow the traveler to choose the more expensive fare available
during business hours defied by your company policy vs a cheaper fare available
outside such hours. The more expensive
fare has to be the only available airfare during business hours, and does not
necessarily have to be in business class.
In other words, if you have a choice of fares leaving at 2
pm and midnight, and the airfare leaving at 2 pm is in economy and is more
expensive than the same class airfare leaving at midnight, you can choose the 2
pm airfare. If the only available
airfare at 2 pm is in business, then it should also be allowable.
Travel Duration – “Unreasonable hours”
Once you define what “unreasonable hours of travel”
represent for your company (USAID defines it as 14 hours, IRS defines their at
12), to keep the costs low, your policy could
break down what options are available:
1) Option One - break up the trip into increments with
associated costs for per diem and hotel and extra pay for travel time (unless
the combined cost of such increments is more expensive than flying a premium
class airfare) or
2) Allow the next available premium class fare: Economy Plus or Business Class
You may want to split it and say that personnel permanently relocating
(Long Term Personnel and Dependents), and travelling over 14 hours, have the
right for Option 1) and split the trip
and stay overnight but will only fly cheapest airfare available (again unless
the additional cost of splitting the trip will make it more expensive than
direct premium class fare).
Short Term personnel who are required to report to work
right away and have no time to recuperate and have to travel 14 hours or more
can get the Option 2) and get Economy Plus or Business Class Fare – with
Economy Plus being the default unless only Business is available.
This will keep the costs more competitive than simply
allowing the next comfort class for all 14 hour trips.
Does travel by employees charging to
indirect cost – not under a specific Government contract -- require the same
rules be followed?
See the answer to this question in the previous blog post at
Indirect Cost Restrictions Fly America Act
What documentation does DCAA
require?
All of the above exceptions to the class of travel or the
use of non -US Flag Carrier airlines must be justified and documented in
writing, citing the correct exception BEFORE travel occurs.
Additionally, DCAA published audit guidelines on March 22,
2010 that require specific documentation to exceptions of the cheapest
available airfare. First, the audit
guidance asserts that in order to comply with the revised travel cost
principle, “the contractor’s policies and procedures should provide for advance
planning of travel to assure that the lowest priced airfare available to the
contractor for flights during normal business hours is documented and utilized
as the baseline for allowable airfare costs”.
Second, it states that “documentation substantiating the lowest airfare
available takes the form of quotations from competing airlines or travel
service from which the lowest priced airfare can be selected; giving proper
consideration to any potential discount or credits to the contractor’s
cost”. This means the lowest airfare
should consider existence of special agreements between contractors and
airlines or travel services offering discounted fares compared to publicly
available airfares for the same travel route.
The audit guidance also advises auditors to consider
questioning contractor’s policies and procedures if there are frequent
instances in which a single quotation is obtained, however it acknowledges that
there may be instances where only one flight is available for the mission.
The guidance also advises auditors that contractors can
choose refundable tickets over non-refundable tickets when the contractor’s
data shows that its experience with cancelling non-refundable tickets results
in increased costs as compared to refundable tickets.
Thanks for this great post! I have a question about city pairs. Why do we (contractors/grantees) have to check their availability? They're patently not available (to us), whether or not they exist for gov. employees. So why check them? I'd love to hear your thinking on this.
ReplyDeleteHi Don, I do not think there is a logical answer to this. The simple answer is that we really should not be checking this, but it is part of the Open Skies Agreement and hence the rule. It was part of the EU agreement for a while and then after writing a lot of letters to the Department of Transportation and DoS, they removed the requirement in 2010. I am not sure why they did not do the same for the remaining 3 agreements. I understand the part about USG employees checking those, since it has to do with discounted rates and saving money, but there is no reason I can think of the city-pair restriction should apply to contractors.
DeleteMoreover, when GSA was asked to extend the city pair fares to contractors, they tried but all of the major airlines have made it clear to GSA that, because the city pair contract rates are so low and the terms so favorable (on average 57% less than regular fares), the airlines would drop out of the City Pair Program (CPP) rather than extend the city pair contract rates to contractors.
DeleteGSA has made the business decision not to jeopardize the program, or the over $7 billion savings for taxpayers.
Therefore, once again I think the only explanation is that they have not gotten round to fixing the remaining Open Skies Agreements to remove the city pair checking requirement.
This comment has been removed by the author.
ReplyDeleteCan you comment on the applicability of Fly America to overhead-funded (i.e. non-project-funded) travel? My current understanding is that although a portion of our overhead funding comes from USAID (along with various other donors), those funds lose their USG identity when they go into the overhead pool. But I cannot seem to find any explicit reference addressing this.
ReplyDeleteCost that is not allowable directly is also unallowable indirectly. Funds do not lose their identity in the indirect pool, if you charge your indirect rate to a US Government contract/grant. The pool should only contain costs that allocable to your Government work. If you wish to have a separate pool for non-US Government work, you can then segregate those costs and fly whichever airline you please. DCAA interprets Fly America very broadly as requiring that ALL funded travel changed directly or indirectly comply with restrictions if the overhead pool rate where the costs are parked is allocated to US Government contracts/grants.
DeleteAlso read: http://www.mckennalong.com/media/library/739_FLYAmericaAct_5-15-08.pdf
Delete"The government interprets the FAA’s application broadly to require not only that travel funded by the government as a direct cost to a government contract comply with the restrictions on use of foreign carriers, but that all international contractor travel throughout the entire contractor enterprise must comply. Thus, the government asserts that any corporate funded travel is subject to the FAA to the extent the costs of such travel are allocated as an indirect cost to any government contract. The express regulatory remedy for a violation of the FAA’s requirements, “requires” that the government disallow the travel expense “in the absence of satisfactory proof of the necessity for foreign-flag transportation.” 48 C.F.R. § 52.247-63(b). Some contractors are reporting that government agencies are taking the position that any contractor vouchers or invoices for payment that include costs relating to the contractor’s use of foreign air carriers in violation with the FAA require not only a cost disallowance, but also may be treated as a potential false claim issue because such payment requests represent the contractor’s implied certification of its compliance with the FAA terms included in the relevant government contract(s). Accordingly, it is critical that contractors maintain practices that provide for compliance with the FAA, including practices that result in the routine preparation of contemporaneous documentation at the time of air travel booking reflecting any need to deviate from the use of a domestic air carrier."
Do you have another source for this? The link seems to be broken, and I am looking for confirmation. Sorry for the necromancy but it's been very frustrating looking for an official source on whether indirect costs/overhead expenditures also have to comply with the FAA. Thank you!
DeleteIs R&R travel also required to adhere to FAA requirements? The mandatory standard provisions exclude R&R from the defined "Travel Costs", but we assume they still intend that these flights should be FAA compliant. Is that true?
ReplyDeleteR&R is travel costs in accordance with Cost Principles, so they are subject to the same rules as all International Travel.
DeleteThis consultant is a TCN and is flying from one Latin American country to another. Can we justify not using a U.S. carrier because she doesn't have a U.S visa, and thus cannot fly via the U.S.?
ReplyDeleteI would say yes this is a justification. As long as it is in writing and on file.
DeleteThe ADS is not applicable to cooperative agreements so FAA does not apply. The ADS is USAID's internal regulations applicable to their staff and contractors.
ReplyDeleteUpdate for clarification: although the revised standard mandatory provisions do reference and apply FAA to cooperative agreements under USAID.
DeleteStandard Provisions are part of ADS.
DeleteThis is very helpful, but I still don't have total clarity on whether my flights are acceptable (is there ever total clarity? :))!
ReplyDeleteQuestions:
1) Where must the codeshare be evident? Only on the e-ticket? Or also on the boarding pass?
2) How do I reconcile flying time with cheapest flight? In my example, I need to get from Canada to Africa; flying directly to Europe obviously reduces my connections and travel times (although not necessarily by 2 connections or 6 hours). With the Open Skies, it seems like if the codeshare is one of the acceptable European partners, it would be acceptable. However, it's not the cheapest flight; the cheapest flight adds a stopover (in the US) and a few hours to the total travel time. Is "cheapest flight" only relevant to the specific travel itinerary?
The code share is different from Open Skies. The code share must be evident in the passenger receipt, e-ticket or boarding passes identifying a US carrier's flight ID. Open Skies partners are considered the same as US carriers, so they do not have to be code share with other US carriers. The flight price must be cheapest available, which does not require circuitous routing. If your policy defines circuitous routing as for example, not adding 6 hours or additional stop over, then I would use that as justification.
DeleteHi Tzarina,
ReplyDeleteThese are great posts. As a contracts management professional I am reading these with a lot of interest and find them very useful. May I ask how do you chose the subjects you write about? It seems to me that reg interpretation is a subject of an infinite discussion. I would love to see your interpretation on issues I face when reading FAR and AIDAR.
Radu
Feel free to suggest topics
DeleteHi,
ReplyDeleteThese are great post. I would like to know about some case.
Could you please answer when you free?
We got international travel approval from USAID for like, Mr.A
But in the financial report, Mr.B used it instead of Mr.A
it's fine or not? for USAID fund
please kindly explain and advise me.
Thank you :)
Thanks for the article! I'm still confused, and wonder if anyone might help me out. I need to fly from Chicago, IL, USA to Osaka, Japan. The flight I would like to book is Chicago->Shanghai on American Airlines, Shanghai-> Osaka on Japan Airlines. The flight back is Osaka->Los Angeles on Japan Airlines and Los Angeles ->Chicago on American Airlines. I can book this all through American Airlines, but it is not a code share (the Japan legs show up as JAL). Osaka and Chicago are not city pairs, but Los Angeles and Osaka are. Does where I layover matter, or just the origin/destination? Flying directly or only on American carriers is not impossible (and doesn't add 24 hours to my trip or more than two layovers or anything like that), it just doubles the cost.
ReplyDeleteCity pairs are only relevant if you are a government employee. If you can not US Flag or code share all the way through, you should use to the farthermost point and then use non US/non Code share.
DeleteThis comment has been removed by the author.
ReplyDeletenice article
ReplyDeletePrint Bus Booking
Qantas is an airline company founded in 1920 in Queensland with the name Queensland and Northen Territory Aerial Services Limited (QANTAS). Nowadays Qantas is the largest Australian airline in both domestic and international flights. contact qantas
ReplyDeleteThanks for sharing it
ReplyDeleteI really like it this kind of information..........Great blog post and really helpful...... and your blog are very interesting and inspiring.
Midnightinfo.com
Medicare is a government endorsed scheme that offers payments and services to ensure the good health of Australian residents. It is an operation provided by the Department of Human Services in Australia medicare number
ReplyDeletewww.kapitalgoods.com
ReplyDeleteMen Accessories
Briefcase
Men bags
Cufflinks
Men wallets
Great information to know because we want to make a luxury travel soon, thanks for the help!
ReplyDeleteThis helps the firm to earn higher profits. These profits help the firm to expand and grow. Jumpstart Business Centres Hong Kong
ReplyDeleteTravel Ezy offer cheap flights to Los Angeles, Fly from return including all taxes.Cheap flights to Los Angeles Enquire with us for deals on other cities best airfares.
ReplyDeleteVisit Now - https://travelezy.net.au/flights/los-angeles-flights/
asapaopf;afencing for privacy
ReplyDeleteThis comment has been removed by a blog administrator.
ReplyDelete
ReplyDeleteHello ! Thank you very much for the knowledge. it is very useful. Looking for Cheap Flight Tickets at Lowest Airfare or flights from london to lahore flights..then book with flightsnfare with affordable price .