GSA requires agencies to pay for travel services

Federal agencies will begin paying fees for travel services under new contracts negotiated by the General Services Administration, GSA officials announced this week.

GSA negotiates contracts with travel agents and then allows agencies to place task orders against the contracts. Under the new contracts, fee-for-service arrangements will help replace the commissions that travel agents used to rely on for revenue.

In recent years, airlines have cut travel agents' commissions by half. In October, for example, ticket sales commissions were slashed from 8 percent to 5 percent. To compensate, travel agents will now charge agencies for their services each month, minus any commissions they earn.

"Obviously, given the change in commissions, costs will be higher then they would have been with an 8 percent commission. It's a business reality: the flow of money has shifted," said Susan May, GSA's director of travel management.

The travel service fees are ceiling prices, and agencies will be able to negotiate below the ceilings based on volume of sales and other factors, May said. For example, if agencies reduce the labor costs of the travel agent by making arrangements via fax or e-mail, they may be able to negotiate lower fees.

The new way of paying for travel services "most likely will result in federal agencies taking a closer look at how they do business," May said.

Ceiling fees range from $14 to $49.50 for domestic travel and $14 to $98.50 for international trips. Contract provisions include allowing the use of the Internet or agency intranets for booking travel should those services become available, May said.

The 46 new contracts will be rolled out starting in December and through the fall of 2000, depending on when contracts that are currently in place end.

Information on price ceilings and service providers is available on GSA's travel management Web site.