Working in the greater Washington D.C. area provides us ample opportunity to work with government contractors. Those who are awarded government contracts have unique travel needs. Compliance with the Federal Acquisition Regulation (FAR) and the Fly America Act or understanding the Joint Travel Regulations (JTR) requires thoughtful leadership, experience and patience with government requirements and the ensuing paperwork. We’ve learned that government contract travel requires different strategies versus working with commercial business.
One of the biggest challenges faced by contracted travelers is the myriad of rules and regulations that need to be followed to stay compliant while traveling as a contractor. Working for the U.S. Government involves extensive rules put in place to ensure fairness in the award of contracts that use public funds. In addition, detailed rules on reimbursement are designed to prevent the taxpayer from paying for costs that are against public policy.
First, a brief explanation of terms:
Federal Acquisition Regulation (FAR) is the principal set of rules in the Federal Acquisition Regulations System. The FAR System governs the “acquisition process” by which the United States federal governments purchases goods and services. FAR and its parts and sub-parts related to travel are complex and include operational, contractual and financial factors.
For any government contracts, travelers need to comply with the rules of the Fly America Act, which states that federal travelers are required to use United States air carrier service for all air travel and cargo transportation services funded by the United States Government. The Fly American Act is incorporated into FAR and is therefore applicable to all U.S. Government contracts.
The Joint Travel Regulation offers the per diem structure for contractors while working, and is critical in understanding expense and reimbursement policy with government contracting.
There’s a great deal of detail that comes with government contract travel. With all of the required documentation and complexity in working with government contract travel, our group of experts has developed the following highlights that can help you stay compliant while travelling as a government contractor.
Allow for a multi-faceted approach to your travel policy
If government contracting is becoming a large part of your company’s business, your travel policy will naturally become more complex. The unique needs of the government may require that your policy is “per-contract” instead of a one-size-fits-all. Different contracts will have different specific requirements and objectives, and your travel policy and enforcement solutions need to be in compliance with, and specific to, that contract.
Discussing a proactive approach to handle the inevitable variations that come with government contracts is essential for your travel policy. Your business may already have an overall policy in place – and if you don’t this should be an immediate first step. Your business’ overall policy, combined with additional automated tools and a dedicated travel expert will keep your government contract travel policies intact.
In a post earlier this year we spoke about seven imperatives for government contractor travel management, and all point to including a very strong contractor travel policy. This is important for everyone in your business to understand, but especially your travel manager, travel management company (TMC), and most importantly your travelling employees.
It’s important to note that failure to comply with the rules and regulations that come with government contracts can result in non-payment or reimbursement of your travel expenses.
Determine your Fly America Act compliance requirement
It is imperative to make sure you understand the Fly America Act requirements and in turn share them with travelers. We highly recommend working with a travel management company that is familiar with and can interpret the act, as the particulars are sometimes confusing and require interpretation. Address the details of the regulation - what carriers can be used, what are the exceptions – and then have a system in place that makes sure the travel confirmation is compliant with the contract obligations.
Using a TMC’s access to supplier agreements with U.S. airlines and the experience that is required for contract travel, can also save your business money. We’ve found that our average ticket costs consistently beat the national averages by between 10-30%. And let’s not forget the potential for non-reimbursement if you’re out of compliance, as mentioned above.
Document compliance in case of an audit
Communicating the compliance guidelines with your travelers is incredibly important as a government contractor. The collection of travel data including expense reports, traveler itinerary and why and how travel decisions are made are crucial for compliance – especially if your business is faced with an audit.
One area where we see documentation as critical refers to the Fly America Act requirement. The law’s requirement to use a U.S. air carrier can be waived depending on a number of factors including where you’ll be traveling, additional bilateral or multilateral transportation agreements or the time spent in the air. The needs of your traveler and/or your client may require changes in the original itinerary. This makes it critical to know your options and to document interpretation of the rules and how the fares selected comply with the act in case of an audit.
The opportunities for government contracting are out there. According to Inc. online magazine, “There are currently at least 31,000 federal contacting opportunities listed on the government's clearinghouse website...” The success of starting and then continuing to work as a government contractor depends on ensuring that your contracted travelers are compliant.
At MacNair Travel Management, we offer the expertise and tools that are needed to be successful in the government contract arena to ensure value, support, control and productivity – delivering what we call “Travel Leadership.” We’d love to start this conversation with you if you’re interested in learning more about the travel-side of government contracting. Our experts are here to help!