Creating a Travel Policy for Government Contractors

» Posted by on Jul 17, 2014 in Travel Professional Resources | 0 comments

US Government business is often very different from commercial business, largely due to the extensive rules in place to ensure fairness in the award of contracts that use public funds.  Not only is the Government the customer it also acts at the overseer of contracts.

Detailed rules on reimbursement are designed to prevent the taxpayer from paying for costs that are against public policy.

For Government Contractors the creation of a Travel Policy is not only a resource for cost effective travel it also incorporates laws that must be followed in order to perform travel for the Federal Government.  Two of the most important documents that must be included in the Travel Policy are the Federal Acquisition Regulation (FAR) and Federal Travel Regulation (FTR).  These documents contain the basic framework contractors need to follow.

The following document is an example of a Travel Policy for Government Contractors.  Information from the FAR and FTR are highlighted in the document in addition to other government documents/ web pages used in the creation of this policy example:

Government Contractor Travel Policy

This document includes broad United States Federal Travel policy guidelines necessary to comply with Federal regulations. This provides the employee with helpful data and resources in order to ensure travel costs are allocated in a responsible manner.  This document may be more restrictive than the company’s Travel and Entertainment Policy; and while it covers the most important and most frequented applications of the governing Federal Travel Regulations, please defer to your travel counselor when arranging travel for any nuances or changes to policies and procedures.

Federal Travel Regulation (FTR) Compliance
General Requirement of the Fly America Act

This Act requires that foreign air travel funded with Federal dollars be performed on US flag air carriers or on foreign air carriers that code share with a US flag carrier. If there is no U.S. carrier to your destination, you must travel on aU.S. carrier as far as possible. Additional cost for U.S. carrier flights is NOT sufficient justification to fly on foreign carriers.

Below is a list of the US flag air carriers:

  • Alaska Airlines (AS)
  • American Airlines (AA)
  • Continental Airlines (CO)
  • Northwest Airlines (NW)
  • United Airlines (UA)
  • US Airways (US)
  • Delta Airlines (DL)

Additional information on airline code share alliances is available on:

Reminder – A code share flight must be documented with the U.S. flag carrier airline code.

For Domestic Travel and Travel to Canada:

  • Airtran Airways (FL)
  • Alaska Airlines (AS)
  • America West Airlines (HP)
  • American Airlines (AA)
  • American Trans Air (TZ)
  • Continental Airlines (CO)
  • Delta Airlines (DL)
  • Frontier Airlines (F9)
  • Hawaiian Airlines (HA)
  • Jet Blue (B6)
  • Midwest Express (YX)
  • Northwest Airlines (NW)
  • Southwest Airlines (WN)
  • Spirit Airlines (NK)
  • United Airlines (UA)
  • US Airways (US)
  • Virgin America (VX)

Note:  *Air Canada is NOT a US flag air carrier*.


There are acceptable reasons to not use a US flag carrier.  These exceptions are listed below:

  • a U.S. flag carrier does not provide service on a particular leg of your trip
  • there is no U.S. flag carrier available for a particular leg
  • the use of a U.S. carrier will unreasonably delay your travel time by three hours
  • travel costs are reimbursed in full by a third party, such as a foreign government or international agency
  • you are involuntarily rerouted
  • medical or safety reasons

Booking Travel

The company’s preferred travel agency, XXX, have agents that are well versed in the Fly America Act. If you advise them that your trip is federally funded, they will provide flight options that comply with the Act and will provide certification of that compliance for you.



Per Diem Policy             Employees will be reimbursed on an actual expense basis. However, to ensure reasonable reimbursement per diems are used, the Accounts Payable accountant will refer to government rates on the website
Allowable cost Allowable cost as per Federal regulations are defined as follows:•           Must be a reasonable cost

•           Must be allocable to the sponsored program

•           Must be treated consistently, through the application of generally accepted accounting principals

•           Must be within the limitations specifically defined in the particular contract or agreement, in terms of the type of cost item and dollar amount charged

Accordingly, cost may be billed to a United States Government (USG) program for example, only if they meet all of the above requirements.

Unallowable Cost All costs which do not fulfill the conditions in allowable cost above shall be treated as unallowable for the purposes of directly or indirectly (as part of the rates) billable to a UScontract.Examples of unallowable expenses would include :

•         Alcoholic Beverages

•           Shoe shine or Dry Cleaning (except for extended in excess of six (6) consecutive days)

•         Movies or personal entertainment

•         Airline or Travel Lounge Clubs

•         Donations or Contributions

•         Personal living expenses

•           Tickets to theatres, movies, sports events, social affairs e.g. golf outing, etc.

Exceptions may be made the company may, for business reasons, reimburse an employee for these expenses.

 Business Meals and Entertainment

General Purpose This serves to communicate the company’s policy on utilization of and reimbursement of cost for business related meals and entertainment. Business related meals and entertainment assist in meeting organizational goals, but must be used productively and with efficiency of cost expenditure, while maintaining a commitment to standards of conduct business ethics as defined by the federal government.
Application This policy amendment covers all company activities, locations, employees, consultants, and contractors within the Business Group, particularly those individuals that may entertain on behalf of the Company.

Business meal expense reimbursements outside of normal travel expenses are only authorized for those employees of the company who fall within executive leadership, own responsibility for a billable contract or P&L account, or sit at the head of a professional services department. The above management personnel may delegate this authority to only those individuals given the responsibility, by the nature of their job function, to strategically drive the business through new customer generation and/or in the preservation of existing customer relationships. (E.g. Business Development, Operations, and Project Management)

Approval outside the above mentioned parameters may be authorized by a VP, or other member of executive management, or can be delegated to the director

Level at the discretion of that director’s VP on a case by case basis.

As a member of an organization which emphasizes the value of integrity, each employee must pledge to uphold the Company’s reputation in keeping compliant with all applicable federal laws regulating procurement with the USgovernment. As a component of our company’s standardization in compliance, employees are prohibited from offering or providing, or being perceived to offer or provide, entertainment to government officials or employees and employees of government contractors or subcontractors. Employees finding themselves in a position to question the appropriateness of their actions, in providing entertainment to any individual, must seek the advice of the Company’s Compliance department and/or the Company’s legal counsel, prior to taking any action. Employees should refer to the Company’s Code of Business Ethics and Conduct for additional detail about contacting the Compliance department.

Policy On those occasions where, in the interest of business, facilitation of a meal and/or some form of entertainment is required, The company will cover costs by allowing for the reimbursement of business meals or entertainment as they relate to fair and lawful expenses that are solely in pursuit of profitability for the Company. The Company expressly forbids any business meal or entertainment event sponsored by, or with the knowledge of, an employee that is, or is perceived to be, with the intent of gaining influence in procurement of a government contract.

Allowable Costs Provisions     

Business Meals: Those meals taken for obvious business purpose and where business is the primary reason for the meal as it falls before, during, or after a business meeting with partners, clients, potential clients, or co-workers where discussion supports a progressive advantage to the company. Excluding all government officials, or individuals representing a government agency, and with no suggestion, or appearance of attempting to influence those individuals involved in the contract decision making process.

Entertainment: Expenses incurred in conjunction with a Company social event where participants include a non-governmental company partner, client, prospective client, or employee, where the main purpose of the event is business, and where such discussion takes place prior to, during or after the event. The entertainment of such partners, clients, or employees is dependent upon the promotion of a business relationship that is advantageous for the company. Entertainment is to include such items as light refreshments, space rental cost, flowers, decoration or the like.

Reasonableness: Employees are to use sound judgment in determining what qualifies as a sensible or not excessive for entertainment, whether it is in the extent or the disposition of cost.





Expense Guidelines

Documentation to support actual costs expended may be made in accordance with Company’s established practice. The United States Federal Government provides a structured definition around allowable cost on billable expenditures, and any expenses not meeting the government’s standards for allowed cost will become the responsibility of the company.  Please see FAR 3.1205-46 for additional information.

Submitting Reimbursements


Business meal and entertainment expense reimbursement requests are to be process and submitted as follow:


  1. Each relative expense is to be itemized in sequential order by date, on the Expense Statement form.  (When an online tool is available this should be used in lieu of the expense form)
    1. The form must be completed in full, with the appropriate charge codes
    2. The form must be signed by the individual submitting the request.
    3. The form requires the approval signatures from the next level manager and/or department VP.


  1. Each receipt included in the expense is to be taped to a standard 8.5 x 11” sheet of paper, depending on the size multiple receipts can be applied to one sheet, in order to promote ease of scanning the document.  The sheets of paper with attached receipts are to be placed behind the Expense Statement Form in sequential order by date.


  1. A written statement of purpose is to be included for each individual event, and attached behind the receipts providing:
    1. A brief summary of the business purpose
    2. Who attended the event by organization/employer (includes last/first and business title)
    3. The date of the expense, name and location (City, State/City, Country) of the place where the event took place.
  1. Those employees requiring pre-approval for hosting an event on behalf of the Company are to attach as the last page, written authorization from the member of the executive management, a VP or their designee.


  1. A copy of the request should be kept by the employee for the employees personal files; all above documentation is to be submitted to Accounts Payable as designated by the Finance department.


Responsibility and Administration Compliance and administration of this policy is the responsibility of every employee.  The interpretation of this policy shall be the responsibility of the Vice President of Human Resources.  The Vice President of Human Resources, or their designee, shall be available for the consultation with supervisors and managers when and where appropriate.The policy should be read in conjunction with all applicable policies of the company, including and not limited to, the company’s Code of Business Ethics and Conduct Policy.


          Federal Government Travel related Web sites

1.      GSA – U.S. General Services Administration Site for an overview of the FTR

2.      CAS-Cost Accounting Standards

3.      FTR-Federal Travel Regulation per diem rates

4.      Standard Regulations- State Department foreign per diem rates

5.               FAR 3.1205-46-this specific section defines allowable travel costs:

Important Definitions Associated with Government Travel 

1. DCAA- Defense Contract Audit Agency.

The DCAA is the audit agency of the Defense Department. All

Costs incurred by Agility DGS are subject to audit by the DCAA.

2. CAS- Cost Accounting Standards.

The CAS contains various accounting standards that were designed to provide uniformity and consistency in the measurement, assignment and allocation of costs to government contracts.

3. Fly America Act

An Act instituted by the United States Government requiring that all travelers flying on government business, funded by the US government, must travel on a US flag carrier to the farthest possible point; regardless if a non-US carrier can be confirmed for a lower price.

4. GTR- Government Travel Regulations.

This term shall refer collectively to the following three separate Government travel regulations.

a.       FTR-Federal Travel Regulations-These regulations implements statutory requirements for travel for those authorized to travel with Federal funds.

b.      JTR-Joint Travel Regulations, volume 2, DOD Civilian Personnel.

Prescribed by the Department of Defense and governs travel in Alaska, Hawaii and outlying areas of theUnited States to include, but not limited to, Guam, Puerto Rico and American Samoa.

  1. Standardized Regulations (Government Civilians, Foreign Areas), Section 925, “Maximum Travel Per Diem Allowance for Foreign Areas” prescribed by the Department of State.

By: Maruca Malloy






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