Monday, July 20, 2015

Fly America Act

Since 1974, the Fly America Act has required federal employees and their dependents, consultants, Government contractors, grantees, and others must use U.S. flag carriers (i.e. an air carrier holding a certificate under section 401 of the Federal Aviation Act of 1958) for U.S. Government-financed international air travel and transportation of the personal effects or property, if available (see FAR 47.402).

The term "must use" is pretty straight-forward. The term "if available" is where contractors have sometimes run afoul of Government oversight.

A U.S.-flag air carrier is considered "available" even if it cost more than a foreign-flag air carrier. Cost seems to be no object here. Its also considered "available" if the foreign-flag carrier is more convenient for the agency or traveler. That gets in to some circuitous routing issues.

FAR 47.403-1(c) includes some scheduling principles to follow unless the application would result in the last or first leg of travel to or from the US being performed by a foreign-flag carrier:

  1. U.S.-flag carrier service available at point of origin shall be used to destination or, in the absence of direct or through service, to the farthest interchange point on a usually traveled route.
  2. When an origin or interchange point is not served by a U.S.-flag air carrier, foreign-flag air carrier service shall be used only to the nearest interchange point on a usually traveled route to connect with U.S.-flag carrier service.
  3. When a U.S.-flag air carrier involuntarily reroutes the traveler via a foreign-flag air carrier, the foreign-flag air carrier may be used notwithstanding the availability of alternative U.S.-flag carrier service.

There are a couple of exceptions such as if the foreign-flag carrier can get the traveler to the destination 24 hours earlier than a U.S.-flag carrier, it is okay to use the foreign-flag carrier. Also, if the U.S.-flag carrier requires a six-hour (or more) layover somewhere in route, it is permissible to use a foreign flag carrier. Refer to FAR 47.403-1(d) and (e) for more specifics on these exceptions.

The penalties for not using U.S.-flag carriers, when available can be fairly steep. FAR 47.403-3 contains a formula for disallowance which is based on the loss of revenues suffered by U.S.-flag air carriers.

FAR 52.247-63, Preference for U.S.-Flag Air Carriers requires contractors who select a carrier other than a U.S.-flag air carrier for international air transportation to include a statement on vouchers involving such transportation, essentially as follows:
Statement of Unavailability of U.S.-Flag Air Carriers
International air transportation of persons (and their personal effects) or property by U.S.-flag air carrier was not available or it was necessary to use foreign-flag air carrier service for the following reasons (state reason).
This contract clause does not apply to contracts awarded using the simplified acquisition procedures (see FAR Part 13) or contracts for commercial items (see FAR Part 12).

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