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One of our subcontractor's trips was canceled by the Government.  It is the policy to buy the cheapest ticket.  The ticket was canceled once the trip was canceled.  The subcontractor waited to see if the FTE could reuse the ticket for another trip.  However, a year passed with no trip, and the credit was forfeited.  The subcontractor wants to bill for the ticket which in turn the prime would want to bill the Government for the ticket.  Is this cost allowable?

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Could the ticket have been immediately exchanged for a refund? Did the subcontractor choose, on its own, to wait one year to see if the ticket could be reused? 

Are there any contract or subcontract terms that require invoicing of travel costs within X number of days?

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Please clarify whether or not the ticket was non-refundable. Those are usually “the cheapest ticket(s)”.

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See FAR 31.205-46.  Travel Costs. Apparently anything more expensive than non-refundable tickets, if they are the “cheapest”, are unallowable, except under certain circumstances with justification. 

“(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.”

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I have found the excess airfare conditions to be a applicable much of the time. In any event, when they are not, the practice might be to bill only for the lowest price airfare that was available and write off the rest as unallowable.  

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I’m waiting for clarification from ElBarz whether the ticket was non-refundable and in response to Pepe’s questions before commenting further. He/she requested a specific answer concerning allowability,  so specific information is necessary.

Edit: I lied about further comment. According to the JTR, the airfare rules for DoD government travellers don’t apply to DoD contractors, unless they be working personal services. It refers one to the cost principles in FAR 31 and to the contract terms and conditions.

https://www.defensetravel.dod.mil/Docs/AP-CTR-01.pdf

I suggest that ElBarz should ask the contracting office. 

No offense intended but, unless one is looking for an independent opinion, I think that contractors should generally ask their government contract office questions like this. I wonder why there is what appears to be a reluctance to communicate directly. 

And if asking for independent opinions, please provide all the facts, if documented reasons are desired.  Two of us asked yesterday for clarifications.

The Original poster is “following” this thread via notifications. 

Thanks. 

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Ticket was non-refundable and non-transferable. The sub waited to see if that person would be able to travel during the time period (when the ticket was valid - 1 year) but no trips after the canceled trip arose.

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I would confirm with the govt but the sub appears to have complied with the cost principles/JTR guidance to buy the ticket and the govt cancelled the meeting. Don’t know if this is DoD contract, or cost type contract. 

The FTR maybe similar in coverage but I didn’t check it. 

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23 hours ago, ElBarz said:

One of our subcontractor's trips was canceled by the Government.  It is the policy to buy the cheapest ticket.  The ticket was canceled once the trip was canceled.  The subcontractor waited to see if the FTE could reuse the ticket for another trip.  However, a year passed with no trip, and the credit was forfeited.  The subcontractor wants to bill for the ticket which in turn the prime would want to bill the Government for the ticket.  Is this cost allowable?

Yes, the cost of the ticket that was not refunded to the subcontractor, and that could not otherwise be used, is an allowable expense. The subcontractor should have billed the cost immediately and not waited to see if the ticket credit could otherwise be used. See the promulgating comments by the FAR Council associated with the regulatory revision that updated the travel cost principle with respect to "lowest-priced available airfare."

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