Q: A government contractor has asked our travel agency to book air tickets, hotels and car rentals at government rates for its employees' business travel while working on government contracts. Are we allowed to do that? Does it make any difference if the government is going to reimburse the contractor for the travel? Does it make any difference if the contractor works at a government location, side by side with government employees? Does it make any difference if our agency has a General Services Administration travel contract? If this kind of booking is not allowed, what trouble could we get into if we did it anyway?
A: Government airfares can be used only by federal government employees traveling on official business. Contractors cannot use them, and it makes no difference whether the contractor's travel expenses are reimbursed by the government, whether the contractor's employees work at government facilities, or whether you are one of the 38 travel agencies holding GSA travel contracts under the Travel Services Solutions program.
If you book a contractor employee at the government fare, you could get a debit memo for the difference between that fare and the full coach fare. Those fare differences can be enormous. For example, between Washington Reagan and New York LaGuardia airports, the lowest one-way government fare is a mere $52, whereas the full Y fare is now about $300.
In addition to getting a debit memo, you could conceivably be the subject of criminal prosecution for helping the contractor submit a false claim for reimbursement. In one case, an agency owner went to jail for various activities involving abuse of government airfares.
Nevertheless, I believe some agencies are breaking the rules inadvertently because contractor purchasing officials have convinced them that this activity is allowed.
If you own or manage such an agency, you should tell your client that you cannot legally provide government airfares to the client's travelers. If the purchasing manager does not believe you, show him or her a copy of this column or the Defense Department's Web page at www.defensetravel.dod.mil/perdiem/faqcitypairfair.html.
On the other hand, some hotel chains and car rental companies allow government contractors to use government hotel and car rates, either as a matter of policy or because the frontline staff has not been adequately trained to tell the difference between government employees and contractor employees at check-in. For example, Holiday Inn and InterContinental Hotels allow government contractors to use the hotels' government rates, while Marriott's website states that contractor employees are not eligible to use government hotel rates.
Car rentals are similar: For example, Alamo has a government-rate program for government contractors, but Avis does not.
Although you cannot offer government airfares to government contractors, you can provide expert assistance to help them comply with the myriad regulations applicable to airfare reimbursements. Those rules have recently become even more complex, opening up an interesting opportunity for you to provide contractors with a valuable service for which you might be able to charge a larger fee per transaction, as I will cover in a future column.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at [email protected].