Agencies Fight to Stay Within Budgets

n 1995 and early 1996, federal travel received a lot of press, most of it bad. General Accounting Office officials testified before Congress that the federal government spends up to 12 times more than private sector companies on travel-related administrative processes. The Commerce Department inspector general revealed that some Commerce employees had been using their government travel cards to buy jewelry, liquor and flowers. The House Appropriations Committee chairman charged that the Transportation department frequently sends too many employees on government business trips and lets them travel for too long. Cabinet secretaries, most famously Energy Secretary Hazel O'Leary, were accused of taking an excessive number of trips to foreign locales.

Does federal travel deserve its growing reputation as a hotbed of abuse of tax dollars? Not when you look at the big picture. Government Executive's Top 200 Federal Contractors data sketches a picture of agencies making an effort to stick to their travel budgets.

Federal spending on travel in fiscal 1995 totaled $7.77 billion, roughly matching what the Office of Management and Budget had reported a year earlier that agencies would spend. Of the 19 agencies with the largest travel budgets, only two of the government's financial regulatory institutions, the Federal Deposit Insurance Corp. and the Resolution Trust Corp., exceeded their travel spending estimates for fiscal 1995. Some components of RTC have been absorbed by FDIC, and OMB is projecting that spending on travel in the combined agency will decrease by more than 40 percent in fiscal 1997.

Some agencies, such as the Energy Department, have identified travel spending as an area of their budget that they can cut back by instituting more efficient travel procedures. Other agencies, who've shut field offices to reach federal workforce reduction goals, are finding that their travel budgets have to increase as headquarters-based staff take more trips into the field.

The reality for many federal employees is that they must travel in order for their agencies to accomplish their missions. Many agencies learned this the hard way during the federal shutdowns in October 1995 and January 1996, when they curtailed travel spending in response to the budget crisis. Some Environmental Protection Agency offices cut back inspection of hazardous waste storage and treatment sites by 50 percent; employees at the National Institute of Standards and Technology were unable to participate in international conferences where participants set trade standards; and Occupational Safety and Health Administration inspectors were unable to travel to training centers to receive instruction in safety and health issues, Federal Times reported.

Until fiscal 1995, the travel spending chart was typically dominated by the same five agencies: the departments of Defense, Transportation, Treasury, Justice and Agriculture. In 1995, the Veterans Affairs Department knocked the Agriculture department out of the top five. Travel sending at the VA increased 13 percent from fiscal 1994 to fiscal 1995 while Agriculture Department spending decreased 28 percent. In fact, the travel budgets of all of the five top-spending agencies decreased from 1994 to 1995. Even the Transportation Department, whose travel budget jumped from the fifth largest to the second largest in government over the year, spent $10 million less on travel in fiscal 1995 than it did in fiscal 1994.

Bucking the downward trend, some agencies are anticipating large increases in their travel budgets over the next two years. They include the Social Security Administration (67 percent), the General Services Administration (33 percent), the Justice Department (26 percent) and the Environmental Protection Agency (24 percent). All these agencies say the increases will come as a result of the expansion of agency programs.

In spite of many civilian agencies anticipated increases in travel spending, the Office of Management and budget expects overall federal spending on travel to decline by 6 percent by fiscal 1997. This is due mostly to a projected 12 percent drop in DoD's travel budget.

Procurement Practices Change

In fiscal 1996, GSA, along with a few other agencies, decided to simplify its procurement of travel agency services by "bundling" travel management center (TMC) contracts. Instead of contracting with 30 different TMCs as it had in the past, the agency looked for one travel agency contractor that could take care of all GSA units nationwide. The agency stipulated that their TMC contractor must be able to maintain five on-site locations and have a "presence"-a regional office or a travel agency subcontractor hired by the TMC-in six other cities. Some local travel agencies that had served GSA the year before were thus knocked out of the bidding because they were too small. But the agency assessed that their decision to bundle contracts negatively impacted only one percent of the TMCs that handled the agency's travel during the previous year. GSA let its contract to Sato Travel.

Now, it seems that everyone is getting on the bandwagon. For fiscal 1997, 137 out of the 138 federal agencies based in Washington have elected to solicit nationwide bundled contracts for travel agency services. The Defense Department, for example, has divided the world into 12 regions (10 of which are in the United States) and solicited commercial travel office (CTO) bids for each region.

Lin Goad, chief of GSA's transportation management branch, says that bundling TMC contracts has gained popularity because dealing with a single TMC contractor streamlines an agency's reimbursement process. When GSA bundled its contracts, it was able to consolidate its 67 different charge card travel accounts into 1. He says, "it's much easier to put federal travel policy into effect. If a policy changes, I don't have to go to numerous travel agency contractors to explain the new policy. I just go to one."

Not everyone's a fan. Federal travelers who once could walk into their TMC and discuss their travel plans face-to-face with an agent may now be forced to arrange their travel over the telephone and receive their tickets in the mail. Some small- and mid-sized travel agencies complain that they're being shut out of government contracts.

Not true, say GSA officials. GSA still solicits TMC contractors in three ways: through full and open competition, small business set-asides-contracts worth $5 million or less on which only small travel agencies may bid and 8(a) contracts on which only minority-owned businesses may bid. While the number of contracts available through full and open competition has decreased because of bundling, Goad points out that in most cases, contracts are bundled within, not across, agencies. There are a few exceptions, though. Due to staff cutbacks, GSA's Federal Supply Service has been forced to consolidate contracts for separate agencies that do $1 million or $2 million worth of traveling a year into single contracts that still add up to $5 million or less. The government travel program simply doesn't have the staff to contract TMCs for every agency individually, Goad says. But "we don't want to eliminate the ability of small businesses to bid on contracts," he adds.

This year, GSA also initiated proceedings to restyle its travel charge card program by November 1998. Currently, credit card companies compete for a single contract award, effective for one year with four renewable option years, to provide charge card services for travel. American Express is the travel charge card contractor. Companies also compete for single contracts for GSA's two other credit/charge account programs-the fleet services card and the purchase card. But GSA wants to open up all three of its credit/charge card programs to multiple vendors.

"We're trying to accomplish three things," says Donna Bennett, deputy assistant commissioner for transportation and property management at GSA's Federal Supply Service. "Give more choice to our agency customers. Maximize competition between vendors by allowing competition during the contract, not just in the beginning when they are competing for the contract itself. And we're trying to set a platform for future technological innovation."

Companies that won travel charge card contracts under a multiple-vendor program would have to offer at least the equivalent of services that are offered now by American Express. Some contractors might offer additional services over and above these basic services, perhaps slanted to a particular type of travel or region. Agencies would be able to choose the charge card contractor best equipped to provide for their particular travel needs. GSA has proposed moving to multiple-vendor contracts because the number of government card holders and the amount of money charged on the cards has increased dramatically over recent years, says Bennett.

GSA officials are spending the summer and fall discussing proposed changes with agency customers and travel industry representatives. The agency will begin soliciting bids for the multiple-award contracts in the spring of 1997.