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Allowable costs on a grant/Fly America Act


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Non profit organization, subject to A-122, is 90 percent funded from federal grants. Under the FLy America Act, my indirect employees' travel on a non certified flight be included in computation of the overhead rate.

1. below is the cite from A-122 on travel costs. 2. below is the Fly America Act.

Opinions?

Thanks all

1. General. Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business of the non-profit organization. Such costs may be charged on an actual cost basis, on a per diem or mileage basis in lieu of actual costs incurred, or on a combination of the two, provided the method used is applied to an entire trip and not to selected days of the trip, and results in charges consistent with those normally allowed in like circumstances in the non-profit organization’s non-federally sponsored activities.

  1. Lodging and subsistence. Costs incurred by employees and officers for travel, including costs of lodging, other subsistence, and incidental expenses, shall be considered reasonable and allowable only to the extent such costs do not exceed charges normally allowed by the non-profit organization in its regular operations as the result of the non-profit organization’s written travel policy. In the absence of an acceptable, written non-profit organization policy regarding travel costs, the rates and amounts established under subchapter I of Chapter 57, Title 5, United States Code ("Travel and Subsistence Expenses; Mileage Allowances"), or by the Administrator of General Services, or by the President (or his or her designee) pursuant to any provisions of such subchapter shall apply to travel under Federal awards (48 CFR 31.205-46(a)).
  2. Commercial air travel.

2.

(a) Transportation by Air Carriers Holding Certificates.— A department, agency, or instrumentality of the United States Government shall take necessary steps to ensure that the transportation of passengers and property by air is provided by an air carrier holding a certificate under section 41102 of this title if—

(1)the department, agency, or instrumentality—

(2)the transportation is authorized by the certificate or by regulation or exemption of the Secretary of Transportation; and

(3)the air carrier is—

(A)available, if the transportation is between a place in the United States and a place outside the United States; or

( B )reasonably available, if the transportation is between 2 places outside the United States.

(1) Airfare costs in excess of the customary standard commercial airfare (coach or equivalent), Federal Government contract airfare (where authorized and available), or the lowest commercial discount airfare are unallowable except when such accommodations would: (a) require circuitous routing; ( B ) require travel during unreasonable hours; © excessively prolong travel; (d) result in additional costs that would offset the transportation savings; or (e) offer accommodations not reasonably adequate for the traveler’s medical needs. The non-profit organization must justify and document these conditions on a case-by-case basis in order for the use of first-class airfare to be allowable in such cases.

(2) Unless a pattern of avoidance is detected, the Federal Government will generally not question a non-profit organization's determinations that customary standard airfare or other discount airfare is unavailable for specific trips if the non-profit organization can demonstrate either of the following: (a) that such airfare was not available in the specific case; or ( B ) that it is the non-profit organization’s overall practice to make routine use of such airfare.

  1. Air travel by other than commercial carrier. Costs of travel by non-profit organization-owned, -leased, or -chartered aircraft include the cost of lease, charter, operation (including personnel costs), maintenance, depreciation, insurance, and other related costs. The portion of such costs that exceeds the cost of allowable commercial air travel, as provided for in subparagraph] c., is unallowable.
  2. Foreign travel. Direct charges for foreign travel costs are allowable only when the travel has received prior approval of the awarding agency. Each separate foreign trip must receive such approval. For purposes of this provision, "foreign travel" includes any travel outside Canada, Mexico, the United States, and any United States territories and possessions. However, the term "foreign travel" for a non-profit organization located in a foreign country means travel outside that country.

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My opinion is that your indirect employees need to comply with this requirement if your grant(s) contain the Fly America clause, 52.247-63. or equivalent. (And they should because the statute expressly says the Act is applicable to grants.) Compliance with the requirement should not be that big of a deal.

First, it's a "preference" for certain carriers, and the Act (as well as the associated clause) provides an escape where US-flag carriers are not available. Second, there are a number of international carriers who qualify as US-flag carriers based on international agreement. See the GSA list of "Open Skies" agreement partners http://www.gsa.gov/p.../content/103191

So compliance should not be that big of a deal. But if your indirect people traveled in violation of the Act, I would not claim the associated airfare.

Hope this helps.

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