Contractors eat up DOE's travel budget

Contractors for the Energy Department are draining the agency's travel budget even as their funding is reduced, according to a new General Accounting Office report.

DOE contractors' travel costs have increased every year since 1995, when the agency achieved a one-time savings of $38 million. The increases have occurred despite a five-year plan implemented in 1995 to reduce contractor travel costs by $30 million per year, the report said.

DOE relies on 34 major contractors for a number of management and support operations. Contractors ensure the safe treatment, storage and disposal of radioactive wastes, and maintain the U.S. nuclear weapons stockpile, among other duties. Contractors' business-related travel, which includes trips to and from field sites and conferences, costs the agency hundreds of millions of dollars each year, according to the report, "DOE Management: Opportunities for Saving Millions in Contractor Travel Costs" (RCED-99-107).

DOE attempted to get contractor travel costs under control in 1995 as part of a strategic realignment and downsizing initiative. DOE said it would cut its travel costs by $175 million over five years, with most of the savings coming from contractor travel. Instead, contractor costs increased 12 percent from 1996 to 1998, GAO said, even though overall contractor funding was down slightly during that period.

GAO auditors concluded that DOE contractors aren't doing their part to reduce travel costs and the department isn't forcing them to. They noted that DOE is still on track to meet its overall five-year travel cost reduction goal, but only because federal travel costs savings are making up for contractor increases. "DOE contractors were aware of the targets, but many did not translate this into an overall strategy or plan," the report said.

Contractor travel to and from Washington is a big part of the problem, GAO said. A 1997 DOE inspector general report found that more than 800 field contractors assigned temporarily or permanently in Washington cost the department $76 million per year in living allowances, salary and relocation costs.

GAO also found that from 1996 to 1998, DOE contractors' foreign travel costs increased by more than 50 percent. While foreign destinations only account for 4 percent of contractor travel, they account for nearly 11 percent of travel spending. Contractor officials attribute the increase to frequent trips to Russia in support of nuclear nonproliferation efforts.

According to the report, travel costs could be reduced if a few simple steps were taken on a consistent basis, such as reducing the number of trips, buying cheaper flights, and reducing other allowable costs, such as hotels, meals and rental cars.

"In our view, it is difficult to justify why some contractors allow their staff to stay in high-priced hotels, purchase higher-priced airline tickets, or charge higher meal costs when others take stronger actions to minimize such costs," GAO said.

The report recommended DOE establish cost targets for each contractor and set standards for allowable costs similar to the per diem rates federal travelers abide by. DOE generally concurred with GAO's recommendations and said it will look into setting spending limits.