Travel agents who do business with the government are taking on the General Services Administration in a battle that could change the federal travel contracting landscape.
In late October, the Society of Travel Agents in Government (STAG), the trade group of travel agencies with government contracts, filed suit against GSA in the U.S. District Court for the District of Columbia.
STAG takes issue with a GSA policy of funding its operations by requiring travel agents to pay the agency mandatory rebates of just under 1 percent of gross sales on contracts. "GSA has no right to impose a tax on vendors just to fund itself," says Barry Roberts, STAG's general counsel.
But STAG has set its sights higher. It wants an end to other rebates, such as those vendors give to client agencies, as well. Ultimately, the group hopes to have existing contracts with travel agencies declared invalid, and perhaps force GSA out of the business altogether, according to Roberts.
STAG is on the warpath because GSA "gave the industry a cold shoulder," says Roberts, after airlines cut travel agent commissions from 10 percent to 8 percent of ticket prices in September. STAG and some of its member firms approached GSA about renegotiating contracts, but they were rebuffed.
"GSA has become totally uncooperative and we don't care if they go out of business," says Roberts.
GSA declined comment on the issue because it is in litigation. The court is currently awaiting GSA's response to the STAG suit.
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