Difference between revisions of "Fly America Act"

Revision as of 12:39, 8 September 2023

Subject: Freight & Transportation

Source: FAR

FAR Part: FAR 47

DFAR Part:

Policy

The Fly America Act was enacted in 1974. FAR 47.402 implements the policy of the Fly America Act, which states, Federal employees and their dependents, consultants, contractors, grantees, and others must use U.S.-flag air carriers for U.S. Government-financed international air travel and transportation of their personal effects or property, if available (Section 5 of the International Air Transportation Fair Competitive Practices Act of 1974 (49 U.S.C. 40118) (Fly America Act)). In essence, the Fly America Act requires all international air travel paid for with federal funds to be performed by U.S. air carriers to the maximum extent possible.

Under FAR 47.403-1, ) If a U.S.-flag air carrier cannot provide the international air transportation needed or if the use of U.S.-flag air carrier service would not accomplish an agency’s mission, foreign-flag air carrier service may be deemed necessary.

Definitions

Code Sharing Arrangements

Internal flights should be on U.S. air carriers, whenever possible, however, the Act permits flights on foreign air carriers when there is a code sharing arrangement, or as described below as a bilateral or multilateral air agreement. For code sharing agreements, a code-share flight is one in which the air carrier has a code sharing agreement with a foreign based carrier. For instance, United Airlines (UA) may have an agreement with British Airways (BA) or Virgin Atlantic (VA). In this case, the requirements are met if the ticket is designated as a UA flight, although the traveler may actually be traveling on BA. The key is that the designator code identifying the flight, is a U.S. Flag carrier such as UA.

PLEASE NOTE: GENERALLY CODE SHARING ARRANGEMENTS AS WELL AS OPEN SKIES ARE NOT AVAILABLE TO DOD FUNDED ACTIVITIES.

Airline Open Skies Agreements

The Fly America Act does not prohibit travel on carriers associated with nations that have a "bilateral or multilateral agreement" with the United States; however, travelers must complete a declaration that such an agreement exists. Because rapidly expanding [Open Skies][1] agreements are considered qualifying "bilateral or multilateral agreement[s]", the provisions of the Fly America Act are less restrictive than in the past. A full list of Open Skies partners is available from the U.S. State Department [2]

What do you need to do?

First, you need to understand whether or not the contracts awarded to your business contain FAR 52.247-63 which implements the Fly America Act. Understand (see exemptions below) that certain types of procurements and awards will not contain the Fly America Act.

If you are flying internationally charging direct to a contract that contains the contract clause, then you need to ensure that all flights, where possible, are on U.S. air carriers or foreign air carriers that code share with a U.S. air carrier. You must either document that a U.S. air carrier is not available, or that you flew on an air carrier that is a U.S. air carrier, or one that either has a code sharing arrangement, or an airline Open Skies Agreement.

If you are charging to an indirect cost objective, flying internationally, you must be aware that the Cost Principles, FAR 31, (See Travel Costs) requires that you fly the lowest price airfare. This is the principle to follow regarding indirect travel. One needs to look at the requirements under FAR 31 - Cost Principles, and follow those requirements when travel is not specific to a contract which contains the Fly America ontract clause. These are the principles that dictate the allowability of costs that are otherwise not dictated by contract clauses.

FAR Contract Clause that implements the Requirement

FAR_52.247-63_-_Preference_for_U.S.-Flag_Air_Carriers (this is a link) implements the requirements of the Fly America Act. As this is a contract clause, the understanding is this is a contract requirement, and as such applies to direct travel. Please see the link above for the contract clause.

Exemptions

This clause does not apply to contracts awarded using the simplified acquisition procedures in FAR Part 13 or contracts for commercial items (see FAR Part 12). It also does not apply to contracts that were awarded competitevly, as cost and pricing data was not utilized in the award of the contract. A fair and reasonable price is assumed under the concept of competition.

Disallowance of Expenditures

• (a) Agencies shall disallow expenditures for U.S. Government-financed commercial international air transportation on foreign-flag air carriers unless there is attached to the appropriate voucher a memorandum adequately explaining why service by U.S.-flag air carriers was not available, or why it was necessary to use foreign-flag air carriers.

• (b) When the travel is by indirect route or the traveler otherwise fails to use available U.S.-flag air carrier service, the amount to be disallowed against the traveler is based on the loss of revenues suffered by U.S.-flag air carriers as determined under the following formula, which is prescribed and more fully explained in 56 Comp. Gen. 209 (1977):

• (c) The justification requirement is satisfied by the contractor’s use of a statement similar to the one contained in the clause at 52.247-63, Preference for U.S.-Flag Air Carriers. (See 47.405.)

Joint Travel Regulations

http://www.govcwiki.org/index.php?title=File:Joint_Travel_Regulations.PDF