48 CFR § 47.403-3 - Disallowance of expenditures.

47.403-3 Disallowance of expenditures.

(a) Agencies shall disallow expenditures for U.S. Government-financed commercial international air transportation on foreign-flag air carriers unless there is attached to the appropriate voucher a memorandum adequately explaining why service by U.S.-flag air carriers was not available, or why it was necessary to use foreign-flag air carriers.

(b) When the travel is by indirect route or the traveler otherwise fails to use available U.S.-flag air carrier service, the amount to be disallowed against the traveler is based on the loss of revenues suffered by U.S.-flag air carriers as determined under the following formula, which is prescribed and more fully explained in 56 Comp. Gen. 209 (1977):

$\frac{\begin{array}{c}\text{Sum of U.S. flag carrier}\\ \text{segment mileage,}\\ \text{authorized}\end{array}}{\begin{array}{c}\text{Sum of all segment}\\ \text{mileage, authorized}\end{array}}×\begin{array}{c}\text{Fare payable}\\ \text{by Government}\end{array}$

$\frac{\begin{array}{c}\text{MINUS}\\ \text{}\\ \text{Sum of U.S. flag carrier}\\ \text{segment mileage,}\\ \text{traveled}\end{array}}{\begin{array}{c}\text{Sum of all segment}\\ \text{mileage, traveled}\end{array}}×\begin{array}{c}\text{Through fare}\\ \text{payed}\end{array}$

(c) The justification requirement is satisfied by the contractor's use of a statement similar to the one contained in the clause at 52.247-63, Preference for U.S.-Flag Air Carriers. (See 47.405.)

[48 FR 42424, Sept. 19, 1983, as amended at 62 FR 237, Jan. 2, 1997]