In general, yes. You are free to use your own miles/certificates to upgrade, but the Government generally books you at a refundable, coach fare.

There are exceptions. I am most familiar with the Joint Travel Regulation that covers DoD. I have long suspected that the rules are different for some parts of the Government, such as State, but for DoD you can get booked in business class if the flight time is over 14 hours, you have to work the day you land, and you do the ton of paperwork to get it approved. In over 35 years of traveling for DoD I have only ever been booked in business once, and I've done a number of 14+ hour flights.

There are also exceptions for medical reasons and concerns about safety and sanitation.

http://www.defensetravel.dod.mil/Doc...es.pdf#page=81