Defense Travel System
Reported Savings Questionable and Implementation Challenges Remain Gao ID: GAO-06-980 September 26, 2006In 1995, the Department of Defense (DOD) began an effort to implement a standard departmentwide travel system. The Defense Travel System (DTS) is envisioned as DOD's standard end-to-end travel system. This report is a follow-up to GAO's January 2006, report which highlighted DTS implementation problems. Because of continued congressional interest in DTS, GAO initiated this follow-up audit under the Comptroller General's statutory authority. GAO determined whether (1) two key assumptions made in the September 2003 economic analysis were reasonable, (2) DOD is taking action to ensure full utilization of DTS and gathering the data needed to monitor DTS utilization, and (3) DOD has resolved the previously identified problems with DTS flight information. To address the above objectives, GAO (1) reviewed the September 2003 DTS economic analysis, (2) analyzed DTS utilization data, and (3) analyzed DTS flight information.
GAO's analysis of the September 2003 DTS economic analysis found that the two key assumptions used to estimate annual net savings were not based on reliable information. Two cost components represent the majority of the over $56 million in estimated net savings--personnel savings and reduced commercial travel office (CTO) fees. In regard to the personnel savings, GAO's analysis found that the $24.2 million of personnel savings related to the Air Force and the Navy was not supported. Air Force and Navy DTS program officials stated that they did not anticipate a reduction in the number of personnel, but rather the shifting of staff from the travel function to other functions. The Naval Cost Analysis Division stated that the Navy will not realize any tangible personnel cost savings from the implementation of DTS. In regard to the CTO fees, the economic analysis assumed that 70 percent of all DTS airline tickets would either require no intervention or minimal intervention from the CTOs, resulting in an estimated annual net savings of $31 million. However, the sole support provided by the DTS program office was an article in a trade industry publication. The article was not based on information related to DTS, but rather on the experience of one private sector company. Furthermore, the economic analysis was not prepared in accordance with guidance prescribed by OMB and DOD. DOD guidance stated that the life-cycle cost estimates should be verified by an independent party, but this did not occur. The economic analysis did not undertake an assessment of the effects of the uncertainty inherent in the estimates of benefits and costs. Because an economic analysis uses estimates and assumptions, it is critical that the imprecision in both the underlying data and assumptions be understood. Such an assessment is referred to as a sensitivity analysis. DOD acknowledged that DTS is not being used to the fullest extent possible, but lacks comprehensive data to effectively monitor its utilization. DOD's utilization data are based on a model that was developed in calendar year 2003. However, the model has not been completely updated to reflect actual DTS usage. The lack of accurate utilization data hinders management's ability to monitor progress toward the DOD vision of DTS as the standard travel system. GAO also found that the military services have initiated actions that are aimed at increasing the utilization of DTS. Finally, GAO found that DTS still has not addressed the underlying problems associated with weak requirement management and system testing. While DOD has acted to address concerns GAO previously raised, GAO found that DTS's requirements are still ambiguous and conflicting. For example, DTS displaying up to 25 flights for each inquiry is questionable because it is unclear whether this is a valid requirement. Until DOD improves DTS's requirement management practices, the department will not have reasonable assurance that DTS can provide the intended functionality.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-06-980, Defense Travel System: Reported Savings Questionable and Implementation Challenges Remain
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Report to Congressional Addressees:
United States Government Accountability Office:
GAO:
September 2006:
Defense Travel System:
Reported Savings Questionable and Implementation Challenges Remain:
Defense Travel System:
GAO-06-980:
GAO Highlights:
Highlights of GAO-06-980, a report to congressional addressees
Why GAO Did This Study:
In 1995, the Department of Defense (DOD) began an effort to implement a
standard departmentwide travel system. The Defense Travel System (DTS)
is envisioned as DOD‘s standard end-to-end travel system. This report
is a follow-up to GAO‘s January 2006, report which highlighted DTS
implementation problems. Because of continued congressional interest in
DTS, GAO initiated this follow-up audit under the Comptroller General‘s
statutory authority. GAO determined whether (1) two key assumptions
made in the September 2003 economic analysis were reasonable, (2) DOD
is taking action to ensure full utilization of DTS and gathering the
data needed to monitor DTS utilization, and (3) DOD has resolved the
previously identified problems with DTS flight information. To address
the above objectives, GAO (1) reviewed the September 2003 DTS economic
analysis, (2) analyzed DTS utilization data, and (3) analyzed DTS
flight information.
What GAO Found:
GAO‘s analysis of the September 2003 DTS economic analysis found that
the two key assumptions used to estimate annual net savings were not
based on reliable information. Two cost components represent the
majority of the over $56 million in estimated net savings”personnel
savings and reduced commercial travel office (CTO) fees. In regard to
the personnel savings, GAO‘s analysis found that the $24.2 million of
personnel savings related to the Air Force and the Navy was not
supported.
* Air Force and Navy DTS program officials stated that they did not
anticipate a reduction in the number of personnel, but rather the
shifting of staff from the travel function to other functions.
* The Naval Cost Analysis Division stated that the Navy will not
realize any tangible personnel cost savings from the implementation of
DTS.
In regard to the CTO fees, the economic analysis assumed that 70
percent of all DTS airline tickets would either require no intervention
or minimal intervention from the CTOs, resulting in an estimated annual
net savings of $31 million. However, the sole support provided by the
DTS program office was an article in a trade industry publication. The
article was not based on information related to DTS, but rather on the
experience of one private sector company. Furthermore, the economic
analysis was not prepared in accordance with guidance prescribed by OMB
and DOD.
* DOD guidance stated that the life-cycle cost estimates should be
verified by an independent party, but this did not occur.
* The economic analysis did not undertake an assessment of the effects
of the uncertainty inherent in the estimates of benefits and costs.
Because an economic analysis uses estimates and assumptions, it is
critical that the imprecision in both the underlying data and
assumptions be understood. Such an assessment is referred to as a
sensitivity analysis.
DOD acknowledged that DTS is not being used to the fullest extent
possible, but lacks comprehensive data to effectively monitor its
utilization. DOD‘s utilization data are based on a model that was
developed in calendar year 2003. However, the model has not been
completely updated to reflect actual DTS usage. The lack of accurate
utilization data hinders management‘s ability to monitor progress
toward the DOD vision of DTS as the standard travel system. GAO also
found that the military services have initiated actions that are aimed
at increasing the utilization of DTS.
Finally, GAO found that DTS still has not addressed the underlying
problems associated with weak requirement management and system
testing. While DOD has acted to address concerns GAO previously raised,
GAO found that DTS‘s requirements are still ambiguous and conflicting.
For example, DTS displaying up to 25 flights for each inquiry is
questionable because it is unclear whether this is a valid requirement.
Until DOD improves DTS‘s requirement management practices, the
department will not have reasonable assurance that DTS can provide the
intended functionality.
What GAO Recommends:
GAO is making four recommendations to DOD aimed at improving the
management oversight of DTS including periodic reports on DTS
utilization and resolution of inconsistencies in DTS‘s requirements.
DOD generally agreed with the recommendations and described its efforts
to address them. DOD also strongly objected to a finding that the
reported personnel savings were unrealistic.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-980].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact McCoy Williams at (202)
512-9095 or Keith Rhodes at (202) 512-6412.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
Validity of DTS Economic Analysis Questionable:
DTS Remains Underutilized by the Military Services:
Previously Reported DTS Requirements Management and Testing
Deficiencies Have Not Been Resolved:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Defense:
Appendix III: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: Summary of DTS Estimated Annual Net Savings Reported in the
September 2003 Economic Analysis:
Table 2: Summary of Estimated Annual Personnel Savings:
Table 3: DTS Reported Utilization Percentage for the Period October
2005 through April 2006:
Figure:
Figure 1: March 2006 DTS Display of Flights between Santiago, Chile,
and San Antonio, Texas:
Abbreviations:
BTA: Business Transformation Agency:
CTO: commercial travel office:
DFAS: Defense Finance and Accounting Service:
DOD: Department of Defense:
DTS: Defense Travel System:
FTR: Federal Travel Regulation:
GDS: Global Distribution System:
GSA: General Services Administration:
IOC: Initial Operating Capability:
NCAD: Naval Cost Analysis Division:
OMB: Office of Management and Budget:
PMO-DTS: Program Management Office--Defense Travel System:
RTS: Reserve Travel System:
TDY: temporary duty:
United States Government Accountability Office:
Washington, DC 20548:
September 26, 2006:
Congressional Addressees:
In 1995, the Department of Defense (DOD) embarked upon the daunting
challenge of implementing a standard, departmentwide travel system in
response to a report by the DOD Task Force to Reengineer
Travel.[Footnote 1] The report pinpointed three principal causes for
DOD's inefficient travel system: (1) travel policies and programs were
focused on compliance with rigid rules rather than mission performance,
(2) travel practices did not keep pace with travel management
improvements implemented by industry, and (3) the various existing
travel systems were not integrated. To address these concerns, DOD
established the Program Management Office--Defense Travel System (PMO-
DTS) to acquire travel services that would be used DOD-wide. The
department launched this program with the goal of replacing existing
travel systems with a single departmentwide system to more effectively
support nonintegrated travel processes and procedures across its
component organizations. The Defense Travel System (DTS) is envisioned
as being the department's standard end-to-end travel system.[Footnote
2]
The department estimates that DTS will be fully deployed at all 11,000
intended locations during fiscal year 2007.[Footnote 3] The September
2003 economic analysis noted that DTS, when fully implemented, would
result in annual net savings of over $56 million. The economic analysis
noted that savings would be realized by the department during fiscal
years 2009-2016. In December 2003, the department's Chief Information
Officer approved a DTS funding level of approximately $564 million. Of
this amount, the contract for the design, development, and deployment
of DTS was for about $264 million. The remaining costs are associated
with areas such as the operation and maintenance of DTS, operation of
the PMO-DTS, the voucher payment process, and management and oversight
of the numerous contracted commercial travel offices (CTO).
This report is a follow-up to our September 2005 testimony and January
2006 report in which we highlighted problems encountered by the
department in its efforts to successfully implement DTS.[Footnote 4]
One of our major findings was that DOD did not have reasonable
assurance that flight information was properly displayed for DOD
travelers because the department failed to properly test the system
interfaces through which the data are accessed for display. We further
noted that the continued use of the existing legacy travel systems at
locations where DTS has been deployed results in underutilization of
DTS and reduces the envisioned savings.
The objectives of this audit were to determine whether (1) two key
assumptions related to the estimated cost savings in the September 2003
economic analysis were reasonable, (2) DOD is taking action to ensure
full utilization of DTS and gathering the data needed to monitor DTS
utilization, and (3) DOD has resolved the previously identified
problems with properly displaying DTS flight information. To address
the first objective, we obtained and reviewed the September 2003
economic analysis to (1) ascertain if the economic analysis was
prepared in accordance with criteria prescribed by the Office of
Management and Budget (OMB) and DOD; (2) analyze two key assumptions on
which the majority of the estimated savings were predicated--personnel
savings and reduced CTO fees; and (3) analyze the underlying supporting
documentation related to these two assumptions. In addition, we
interviewed PMO-DTS and military service officials to obtain an
understanding of the basis they used to compute the reported annual net
savings of over $56 million.[Footnote 5]
To address the second objective, we obtained and analyzed DTS
utilization data from the PMO-DTS. We also met with military service
officials to obtain an understanding of the efforts they have underway
to help ensure the full utilization of DTS. Further, we obtained from
the military services an understanding of the data they used to monitor
DTS utilization. Finally, to address the third objective, we analyzed
246 U.S. General Services Administration (GSA) city pair flights to
determine if the information being displayed to the traveler was
consistent with DTS's stated requirement. We also met with PMO-DTS and
contractor officials.
Because of the continued widespread congressional interest in DTS, this
assignment was performed at our initiative under the statutory
authority provided to the Comptroller General of the United States. Our
work focused on the validity of the assumptions that were the principal
drivers of the net annual estimated savings of over $56 million. We
determined that the data were sufficiently reliable for this purpose.
We did not review the accuracy and reliability of the specific dollar
amounts shown in the September 2003 economic analysis. Our work was
performed from October 2005 through July 2006 in accordance with U.S.
generally accepted government auditing standards. Details on our scope
and methodology are included in appendix I. We requested comments on a
draft of this report from the Secretary of Defense or his designee. We
received written comments from the Under Secretary of Defense
(Personnel and Readiness), which are reprinted in appendix II.
Results in Brief:
Our analysis of the September 2003 DTS economic analysis found that two
key assumptions used to estimate cost savings were not based on
reliable information. Two primary areas represented the majority of the
over $56 million of estimated annual net savings DTS was expected to
realize--personnel savings of $24.2 million and reduced CTO fees of $31
million. The $24.2 million estimated annual personnel savings were
attributed to the Air Force and Navy.[Footnote 6] However, the Naval
Cost Analysis Division has stated that the Navy will not realize any
tangible personnel cost savings from the implementation of DTS. In
regard to the estimated annual savings of $31 million attributed to
lower CTO fees, we requested, but the PMO-DTS could not provide, any
analysis of travel data to support the assumption that 70 percent of
all airline tickets would be considered "no touch"--meaning that there
would be no or minimal intervention by the CTO, thereby resulting in
lower CTO fees. We found that the 70 percent assumption was based
solely upon an article that appeared in a travel industry trade
publication.
In addition, the economic analysis was not prepared in accordance with
guidance prescribed by OMB and DOD. Both sets of guidance require that
an economic analysis be based on facts and data and be explicit about
the underlying assumptions used to arrive at future benefits and costs.
DOD guidance also states that life-cycle cost estimates should be
independently validated. An independent review is intended, in part, to
provide program management some degree of assurance that the life-cycle
cost estimates are reasonable and the cost estimates are built on
realistic program assumptions. However, an independent validation was
not performed.
Based on these factors, the estimated annual net savings of over $56
million included in the 2003 economic analysis is highly questionable.
While the reliability of the economic analysis is questionable, the
department's system acquisition criteria do not require that a new
economic analysis be prepared because DTS has already completed all of
the major milestones related to a major automated system. However, the
department's business system investment management guidance stipulates
that all business systems must be reviewed annually and provides an
opportunity for DOD management to assess whether DTS is meeting its
planned cost, schedule, and functionality goals.
Our analysis also found that the department did not have quantitative
metrics to measure the extent to which DTS is actually being used. The
reported DTS utilization rates were based on a methodology that was
developed using estimated data, and PMO-DTS program officials
acknowledged that the model had not been completely updated with actual
data as DTS continued to be implemented at the 11,000 sites. As a
result, the PMO-DTS continues to rely on outdated information in
calculating DTS utilization rates that are reported to DOD management
and the Congress. Additionally, while the military services have
initiated actions to help increase the utilization of DTS, they pointed
out that ineffective DTS training is a contributing factor to the lower
than expected usage rate by the military services.
Finally, DOD still has not addressed the several functional problems
associated with weak requirements management and system testing.
Requirements represent the blueprint that system developers and program
managers use to design, develop, test, and implement a system. Because
requirements provide the foundation for system testing, they must be
complete, clear, and well documented to design and implement an
effective testing program. Our February 2006 analysis disclosed that
DOD still did not have reasonable assurance that the flight information
was being properly displayed to DOD travelers. We identified 246 unique
GSA city pair flights that should have been identified on one or more
DTS flight displays according to the DOD requirements. However, 87 of
these flights did not appear on one or more of the required listings.
We also identified instances in which DTS displayed flights for
selection that did not appear to comply with the Fly America
Act.[Footnote 7] By not displaying flights in accordance with the Fly
America Act's criteria, DTS places the traveler who purchases a ticket
or the individual authorizing, certifying, or disbursing a payment made
when a ticket is paid for directly by DOD through a centrally billed
account at unnecessary risk of personal liability, because the
travelers can be held accountable for the cost of the trip. While the
PMO-DTS has taken action to address our concerns, these actions do not
fully address the fundamental problems we found during this audit and
on which we have previously reported.[Footnote 8] For example, the DTS
requirements we reviewed were still ambiguous and conflicting.
Adequately defined and tested requirements are one of the key elements
to help reduce a project's risks to acceptable levels.[Footnote 9]
We are making four recommendations to the Secretary of Defense aimed at
improving the department's management and oversight of DTS. More
specifically, we recommend that the Secretary of Defense (1) evaluate
the cost effectiveness of the Navy continuing with the CTO management
fee structure, (2) update the DTS Voucher Analysis Model to report DTS
actual utilization rates, (3) require the PMO-DTS to provide periodic
reports on the utilization of DTS, and (4) resolve inconsistencies in
DTS requirements.
In written comments on a draft of this report, DOD agreed with three
and partially agreed with one of the recommendations. For those
recommendations the department agreed with, the comments briefly
outlined its actions for addressing two of them, but did not comment on
the third. In regard to the recommendations to which it responded, the
department's planned actions are in keeping with the intent of our
recommendations.
DOD disagreed with our finding that the estimated personnel savings are
unrealistic. DOD stated that recognizing fiscal constraints, the
department continues to identify efficiencies and eliminate
redundancies to help leverage available funds. As noted in our report,
DOD officials responsible for reviewing economic analyses stated that
while shifting personnel to other functions is considered a benefit, it
should be considered an intangible benefit rather than tangible dollar
savings since the shifting of personnel does not result in a reduction
of DOD expenditures. Because none of the military services could
validate an actual reduction in the number of personnel as a result of
DTS implementation, we continue to believe that the estimated annual
personnel savings of $54.1 million is unrealistic. The Agency Comments
and Our Evaluation section of this report provides a more detailed
discussion of the department's comments. We have reprinted DOD's
written comments in appendix II.
Background:
In September 1993, the National Performance Review recommended an
overhaul of DOD's temporary duty (TDY) travel system. In response, DOD
created the DOD Task Force to Reengineer Travel to examine the travel
process. The task force found that the current process was expensive to
administer and was neither customer nor mission oriented with the net
result being a travel process that was costly, inefficient, fragmented,
and did not support DOD's needs. On December 13, 1995, the Under
Secretary of Defense for Acquisition and Technology and the Under
Secretary of Defense (Comptroller)/Chief Financial Officer issued a
memorandum, "Reengineering Travel Initiative," establishing the PMO-
DTS to acquire travel services that would be used DOD-wide.
Additionally, in a 1997 report to Congress, the DOD Comptroller pointed
out that the existing DOD TDY travel system was never designed to be an
integrated system.[Footnote 10] The report stated that because there
was no centralized focus on the department's travel practices, the
travel policies were issued by different offices and the process had
become fragmented and "stovepiped." The report further noted that there
was no vehicle in the current structure to overcome these deficiencies,
as no one individual within the department had specific responsibility
for management control of DOD TDY travel.
DOD management and oversight of the DTS program has varied over the
years. DTS was designated a "Special Interest" program in 1995. It
retained this status until May 2002 when it was designated a major
automated information system,[Footnote 11] with the Defense Finance and
Accounting Service (DFAS) being designated as the lead component for
the program. This meant that DFAS was responsible for the management
oversight of DTS program acquisition, including DTS compliance with the
required DOD acquisition guidance.
In September 2003, DOD finalized its economic analysis for DTS in
preparation for a milestone decision review.[Footnote 12] The
highlights of the economic analysis are shown in table 1. In December
2003, the DOD Chief Information Officer granted approval for DTS to
proceed with full implementation throughout the department.
Table 1: Summary of DTS Estimated Annual Net Savings Reported in the
September 2003 Economic Analysis:
Constant fiscal year 2003 dollars in millions.
Cost Components: Records management;
Estimated annual net savings: $19.8.
Cost Components: Centrally billed accounts;
Estimated annual net savings: 1.7.
Cost Components: CTO acquisition and administration;
Estimated annual net savings: 2.4.
Cost Components: CTO services;
Estimated annual net savings: 31.0.
Cost Components: Voucher process and compute;
Estimated annual net savings: 54.1.
Cost Components: Voucher pay;
Estimated annual net savings: 0.
Cost Components: Legacy systems;
Estimated annual net savings: 14.5.
Cost Components: PMO;
Estimated annual net savings: (8.8).
Cost Components: Help desk/DTA;
Estimated annual net savings: (36.8).
Cost Components: System operations;
Estimated annual net savings: (21.5).
Cost Components: Total net savings;
Estimated annual net savings: $56.4.
Source: September 2003 economic analysis provided by the PMO-DTS.
Note: In arriving at the estimated annual net savings of over $56
million, the economic analysis took into consideration the estimated
costs of over $2.1 billion, which covers fiscal years 2003-2016. The
estimated costs included the costs that are estimated to be incurred by
the PMO-DTS, the Army, the Navy, the Air Force, and the defense
agencies.
[End of table]
In October 2005, DOD established the Business Transformation Agency
(BTA) to advance DOD-wide business transformation efforts, particularly
with regard to business systems modernization. DOD believes it can
better address managing defensewide business transformation, which
includes planning, management, organizational structures, and processes
related to all key business areas, by first transforming business
operations to support the warfighter, while also enabling financial
accountability across DOD. BTA operates under the authority, direction,
and control of the Under Secretary of Defense for Acquisition,
Technology, and Logistics, who is the vice chair of the Defense
Business Systems Management Committee--which serves as the highest
ranking governing body for business systems modernization activities.
Among other things, BTA includes a Defense Business Systems Acquisition
Executive who is responsible for centrally managing 28 DOD- wide
business projects, programs, systems, and initiatives--one of which is
DTS.[Footnote 13] In October 2004, responsibility for the policies and
procedures related to the management of commercial travel throughout
DOD transferred to the Office of the Under Secretary of Defense
(Personnel and Readiness).
Validity of DTS Economic Analysis Questionable:
Our analysis of the September 2003 DTS economic analysis found that two
key assumptions used to estimate cost savings were not based on
reliable information. Consequently, the economic analysis did not serve
to help ensure that the funds invested in DTS were used in an efficient
and effective manner. Two primary areas represented the majority of the
over $56 million of estimated annual net savings DTS was expected to
realize--personnel savings and reduced CTO fees. However, the estimates
used to generate these savings were unreliable. Further, DOD did not
effectively implement the policies relating to developing economic
analyses for programs such as DTS. Effective implementation of these
policies should have highlighted the problems that we found and allowed
for appropriate adjustments so that the economic analysis could have
served as a useful management tool in making funding decisions related
to DTS--which is the primary purpose of this analysis. While the
department's system acquisition criteria do not require that a new
economic analysis be prepared, the department's business system
investment management structure provides an opportunity for DOD
management to assess whether DTS is meeting its planned cost, schedule,
and functionality goals.
Personnel Savings Are Unrealistic:
The economic analysis estimated that the annual personnel savings was
over $54 million,[Footnote 14] as shown in table 2.
Table 2: Summary of Estimated Annual Personnel Savings:
Constant fiscal year 2003 dollars in millions.
DOD component: Army;
Estimated annual savings: $16.0.
DOD component: Navy;
Estimated annual savings: 12.9.
DOD component: Air Force;
Estimated annual savings: 11.3.
DOD component: Marine Corps;
Estimated annual savings: 5.8.
DOD component: Defense agencies;
Estimated annual savings: 6.3.
DOD component: Permanent change of station;
Estimated annual savings: 1.8.
DOD component: Total savings;
Estimated annual savings: $54.1.
Source: September 2003 economic analysis provided by the PMO-DTS.
[End of table]
As shown in table 2, approximately 45 percent of the estimated savings,
or $24.2 million was attributable to the Air Force and Navy. The
assumption behind the personnel savings computation was that there
would be less manual intervention in the processing of travel vouchers
for payment, and therefore fewer staff would be needed. However, based
on our discussions with Air Force and Navy DTS program officials, it is
questionable as to how the estimated savings will be achieved. Air
Force and Navy DTS program officials stated that they did not
anticipate a reduction in the number of personnel with the full
implementation of DTS, but rather the shifting of staff to other
functions. According to DOD officials responsible for reviewing
economic analyses, while shifting personnel to other functions is
considered a benefit, it should be considered an intangible benefit
rather than tangible dollar savings since the shifting of personnel
does not result in a reduction of DOD expenditures. Also, as part of
the Navy's overall evaluation of the economic analysis, program
officials stated that "the Navy has not identified, and conceivably
will not recommend, any personnel billets for reduction." Finally, the
Naval Cost Analysis Division (NCAD) October 2003 report on the economic
analysis noted that it could not validate approximately 40 percent of
the Navy's total costs, including personnel costs, in the DTS life-
cycle cost estimates because credible supporting documentation was
lacking. The report also noted that the PMO-DTS used unsound
methodologies in preparing the DTS economic analysis.
The extent of personnel savings for the Army and defense agencies,
which are reported as $16 million and $6.3 million respectively, is
also unclear. The Army and many defense agencies use DFAS to process
their travel vouchers, so the personnel savings for the Army and the
defense agencies were primarily related to reductions in DFAS's costs.
In discussions with DFAS officials, they were unable to estimate the
actual personnel savings that would result since they did not know (1)
the number of personnel, like those at the Air Force and Navy, that
would simply be transferred to other DFAS functions or (2) the number
of personnel that could be used to avoid additional hiring. For
example, DFAS expects that some of the individuals assigned to support
the travel function could be moved to support its ePayroll program.
Since these positions would need to be filled regardless of whether the
travel function is reduced, transferring personnel from travel to
ePayroll would reduce DOD's overall costs since DFAS would not have to
hire additional individuals.
Savings Associated with Reduction of CTO Fees Are Unknown:
According to the September 2003 economic analysis, DOD expected to
realize annual net savings of $31 million through reduced fees paid to
the CTOs because the successful implementation of DTS would enable the
majority of airline tickets to be acquired with either no or minimal
intervention by the CTOs. These are commonly referred to as "no touch"
transactions. However, DOD did not have a sufficient basis to estimate
the number of transactions that would be considered "no touch" since
(1) the estimated percentage of transactions that can be processed
using the "no touch" was not supported and (2) the analysis did not
properly consider the effects of components that use management fees,
rather than transaction fees, to compensate the CTOs for services
provided. The weaknesses we identified with the estimating process
raise serious questions as to whether DOD will realize substantial
portions of the estimated annual net savings of $31 million.
"No Touch" Transaction Volume Estimates Are Not Supported:
DOD arrived at the $31 million of annual savings in CTO fees by
estimating that 70 percent of all DTS airline tickets would be
considered "no touch" and then multiplying these tickets by the savings
per ticket in CTO fees. However, a fundamental flaw in this analysis
was that the 70 percent assumption had no solid basis. We requested,
but the PMO-DTS could not provide, any analysis of travel data to
support the assertion. Rather, the sole support provided by the PMO-DTS
was an article in a travel industry trade publication.[Footnote 15] The
article was not based on information related to DTS, but rather on the
experience of one private sector company.
The economic analysis assumed that DOD could save about $13.50 per "no
touch" ticket. Since that analysis, DOD has awarded one contract that
specifically prices transactions using the same model as that
envisioned by the economic analysis. This contract applies to the
Defense Travel Region 6 travel area.[Footnote 16] During calendar year
2005, the difference in fees for "no touch" transactions and the
transactions supported by the current process averaged between $10 and
$12, depending on when the fees were incurred because the contract
rates changed during 2005.[Footnote 17] In analyzing travel voucher
data for Region 6 for calendar year 2005, we found that the reported
"no touch" rate was, at best 47 percent--far less than the 70 percent
envisioned in the economic analysis.
PMO-DTS program officials stated they are uncertain as to why the
anticipated 70 percent "no touch" was not being achieved. According to
PMO-DTS program officials, this could be attributed, in part, to the
DOD travelers being uncomfortable with the system and making
reservations without using a CTO. Although this may be one reason,
other factors may also affect the expected "no touch" fee. For example,
we were informed that determining the airline availability and making
the associated reservation can be accomplished, in most cases, rather
easily. However, obtaining information related to hotels and rental
cars and making the associated reservation can be more problematic
because of the limitations in the data that DTS is able to obtain from
its commercial sources. Accordingly, while a traveler may be able to
make a "no touch" reservation for the airline portion of the trip, the
individual may need to contact the CTO in order to make hotel or rental
car reservations. When this occurs, rather than paying a "no touch" fee
to the CTO, DOD ends up paying a higher fee, which eliminates the
savings estimated in the economic analysis.
The economic analysis assumed that (1) DOD would be able to modify the
existing CTO contracts to achieve a substantial reduction in fees paid
to a CTO when DTS was fully implemented across the department and (2)
all services would use the fee structure called for in the new CTO
contracts. The first part of the assumption is supported by results of
the CTO contract for DOD Region 6 travel. The fees for the DTS "no
touch" transactions were at least $10 less than if a CTO was involved
in the transactions. However, to date, the department has experienced
difficulty in awarding new contracts with the lower fee structure. On
May 10, 2006, the department announced the cancellation of the
solicitation for a new contract. According to the department, it
decided that the solicitation needed to be rewritten based on feedback
from travel industry representatives at a March 28, 2006, conference.
The department acknowledged that the "DTS office realized its
solicitation didn't reflect what travel agency services it actually
needed."[Footnote 18] The department would not say how the solicitation
would be refined, citing the sensitivity of the procurement process.
The department also noted that the new solicitation would be released
soon, but provided no specific date.
Navy Impact of CTO Management Fees Not Adequately Considered:
The economic analysis assumed that the Navy would save about $7.5
million, almost 25 percent, of the total savings related to CTO fees
once DTS is fully deployed. The economic analysis averaged the CTO fees
paid by the Army, the Air Force, and the Marine Corps--which amounted
to about $18.71 per transaction--to compute the savings in Navy CTO
fees. Using these data, the assumption was made in the economic
analysis that a fee of $5.25 would be assessed for each ticket,
resulting in an average savings of $13.46 per ticket for the Navy
($18.71 minus $5.25).[Footnote 19] While this approach may be valid for
the organizations that pay individual CTO fees, it may not be
representative for organizations such as the Navy that pay a management
fee. The management fee charged the Navy is the same regardless of the
involvement of the CTO--therefore, the reduced "no touch" fee would not
apply.
We were informed by Navy DTS program officials that they were
considering continuing the use of management fees after DTS is fully
implemented. According to Navy DTS program officials, they paid about
$14.5 million during fiscal year 2005 for CTO management fees, almost
$19 per ticket for approximately 762,700 tickets issued. Accordingly,
even if the department arrives at a new CTO contract containing the new
fee structure or fees similar to those of Region 6, the estimated
savings related to CTO fees for the Navy will not be realized if the
Navy continues to use the management fee concept.
Effective Implementation of Existing Policies Should Have Identified
Problems with the Economic Analysis:
Effective implementation of DOD guidance would have detected the types
of problems discussed above and resulted in an economic analysis that
would have accomplished the stated objective of the process--to help
ensure that the funds invested in DTS were used efficiently and
effectively. DOD policy[Footnote 20] and OMB guidance[Footnote 21]
require that an economic analysis be based on facts and data and be
explicit about the underlying assumptions used to arrive at estimates
of future benefits and costs. Since an economic analysis deals with
costs and benefits occurring in the future, assumptions must be made to
account for uncertainties. DOD policy recognizes this and provides a
systematic approach to the problem of choosing the best method of
allocating scarce resources to achieve a given objective.
A sound economic analysis recognizes that there are alternative ways to
meet a given objective and that each alternative requires certain
resources and produces certain results. The purpose of the economic
analysis is to give the decision maker insight into economic factors
bearing on accomplishing the objectives. Therefore, it is important to
identify factors, such as cost and performance risks and drivers, which
can be used to establish and defend priorities and resource
allocations. The DTS economic analysis did not comply with the DOD
policy, and the weaknesses we found should have been detected had the
DOD policy been effectively implemented. The PMO-DTS had adequate
warning signs of the potential problems associated with not following
the OMB and DOD guidance for developing an effective economic analysis.
For example, as noted earlier, the Air Force and Navy provided comments
when the economic analysis was being developed that the expected
benefits being claimed were unrealistic. Just removing the benefits
associated with personnel savings from the Air Force and Navy would
have reduced the overall estimated program cost savings by almost 45
percent. This would have put increased pressure on the credibility of
using a 70 percent "no touch" utilization rate. The following are
examples of failures to effectively implement the DOD policy on
conducting economic analyses and the adverse effects on the DTS
economic analysis.
* The DTS life-cycle cost estimates portion of the economic analysis
was not independently validated as specified in DOD's
guidance.[Footnote 22] PMO-DTS officials acknowledged that there was
not an independent assessment of the DTS life-cycle cost estimates.
However, they noted that the department's Office of Program Analysis
and Evaluation had provided comments on the economic analysis.[Footnote
23] Program Analysis and Evaluation officials informed us that they did
not perform an independent assessment of the DTS economic analysis
because the data were not available to validate the reliability of that
analysis. Program Analysis and Evaluation officials also noted that
they had raised similar concerns about the July 2003 economic analysis,
but those issues had not been resolved when the September 2003 economic
analysis was provided for their review. Because the September 2003 DTS
life-cycle cost estimates were not independently assessed, the
department did not have reasonable assurance that the reported
estimates were realistic, that the assumptions on which the analysis
was based were valid, or that the estimated rate of return on the
investment could reasonably be expected to be realized.
* The September 2003 DTS economic analysis did not undertake an
assessment of the effects of the uncertainty inherent in the estimates
of benefits and costs, as required by DOD and OMB guidance.[Footnote
24] Because an economic analysis uses estimates and assumptions, it is
critical that a sensitivity analysis be performed to understand the
effects of the imprecision in both underlying data and modeling
assumptions. This analysis is required since the estimates of future
benefits and costs are subject to varying degrees of uncertainty. For
example, according to DOD officials, the number of travel transactions
has remained relatively stable over the years. On the other hand, as
discussed previously, the number of transactions that can be processed
as "no touch" is unknown. Sensitivity analysis refers to changing the
value of a given variable in a model to gauge the effect of change on
model results. More importantly, it identifies key elements--data and
assumptions--as discussed above--and varies a single element while
holding the others constant to determine what amount of change in that
element is required to raise or lower the resulting dominant benefit
and cost elements by a set amount. In this way, data and assumptions
can be risk-ranked for decisionmaking and auditing. In the case of DTS,
we requested that the PMO-DTS determine the effects of a change in "no
touch" transaction percentage. With all other factors remaining the
same, DTS would have to achieve a 35 percent "no touch" transaction
rate just to break even--where tangible costs and benefits are equal.
Had DOD performed such an analysis, it would have understood that
depending solely on an industry trade publication as its support for
the "no touch" transaction percentage had major implications on the
potential savings.
New Economic Analysis Not Required by DOD Criteria:
Although the September 2003 economic analysis was not based on
supportable data, the department's criteria do not require that a new
economic analysis be prepared. DTS has already completed all of the
major milestones related to a major automated system, which require
that an economic analysis be prepared or at least updated to reflect
the current assumptions and the related costs and benefits. However,
the fiscal year 2005 defense authorization act[Footnote 25] requires
the periodic review, but not less than annually, of every defense
business system investment. Further, the department's April 2006
guidance[Footnote 26] notes that the annual review process "provides
follow-up assurance that information technology investments, which have
been previously approved and certified, are managed properly, and that
promised capabilities are delivered on time and within budget." If
effectively implemented, this annual review process provides an
excellent opportunity for DOD management to assess whether DTS is
meeting its planned cost, schedule, and functionality goals. Going
forward, such a review could serve as a useful management tool in
making funding and other management decisions related to DTS.
DTS Remains Underutilized by the Military Services:
Our September 2005 testimony and January 2006 report[Footnote 27] noted
the challenge facing the department in attaining the anticipated DTS's
utilization. While DOD has acknowledged the underutilization, we found
that across DOD, the department does not have reasonable quantitative
metrics to measure the extent to which DTS is actually being used.
Presently, the reported DTS utilization is based on a DTS Voucher
Analysis Model[Footnote 28] that was developed in calendar year 2003
using estimated data, but over the years has not been completely
updated with actual data. While the military services have initiated
actions to help increase the utilization of DTS, they pointed out that
ineffective DTS training is a contributing factor to the lower than
expected usage rate by the military services.
Metrics to Measure DTS Utilization Are Inadequate:
The DTS Voucher Analysis Model was prepared in calendar year 2003 and
based on airline ticket and voucher count data that were reported by
the military services and defense agencies, but the data were not
verified or validated. Furthermore, PMO-DTS officials acknowledged that
the model has not been completely updated with actual data as DTS
continues to be implemented at the 11,000 sites. We found that the Air
Force is the only military service that submits monthly metrics to the
PMO-DTS officials for their use in updating the DTS Voucher Analysis
Model. Rather than reporting utilization based on individual site
system utilization data, the PMO-DTS continues to rely on outdated
information in the reporting of DTS utilization to DOD management and
Congress. We have previously reported[Footnote 29] that best business
practices indicate that a key factor of project management and
oversight is the ability to effectively monitor and evaluate a
project's actual performance against what was planned.
In order to perform this critical task, best business practices require
the adoption of quantitative metrics to help measure the effectiveness
of a business system implementation and to continually measure and
monitor results, such as system utilization. This lack of accurate and
pertinent utilization data hinders management's ability to monitor its
progress toward the DOD vision of DTS as the standard travel system, as
well as to provide consistent and accurate data to Congress. With the
shift of the DTS program to BTA, which now makes DTS an enterprisewide
endeavor, improved metrics and training are essential if DTS is to be
DOD's standard, integrated, end-to-end travel system for business
travel.
Table 3 presents DTS's reported percentage of utilization during the
period October 2005 through April 2006. PMO-DTS officials calculated
these utilization percentages by comparing the actual number of travel
vouchers processed through DTS to the outdated universe of travel
transaction data per the model, as described previously. Because the
PMO-DTS was not able to identify the total number of travel vouchers
that should have been processed through DTS (total universe of travel
vouchers), the utilization percentages shown in table 3 may be over-or
understated.
Table 3: DTS Reported Utilization Percentage for the Period October
2005 through April 2006:
Month: October 2005;
Army: 46;
Navy: 28;
Air Force: 33.
Month: November 2005;
Army: 59;
Navy: 32;
Air Force: 48.
Month: December 2005;
Army: 50;
Navy: 27;
Air Force: 38.
Month: January 2006;
Army: 40;
Navy: 20;
Air Force: 29.
Month: February 2006;
Army: 54;
Navy: 30;
Air Force: 40.
Month: March 2006;
Army: 66;
Navy: 39;
Air Force: 47.
Month: April 2006;
Army: 59;
Navy: 35;
Air Force: 40.
Month: Average;
Army: 53;
Navy: 30;
Air Force: 39.
Source: PMO-DTS.
[End of table]
PMO-DTS program officials confirmed that the reported utilization data
were not based on complete data because the department did not have
comprehensive information to identify the universe or the total number
of travel vouchers that should be processed through DTS. PMO-DTS
program and DTS military service officials agreed that the actual DTS
utilization rate should be calculated by comparing actual vouchers
being processed in DTS to the total universe of vouchers that should be
processed in DTS. The universe would exclude those travel vouchers that
cannot be processed through DTS, such as those related to permanent
change of station travel.
The Air Force was the only military service that attempted to obtain
data on (1) the actual travel vouchers processed through DTS and (2)
those travel vouchers eligible to be processed through DTS, but were
not. These data were site specific. For example, during the month of
December 2005, the PMO-DTS reported that at Wright-Patterson Air Force
Base, 2,880 travel vouchers were processed by DTS, and the Air Force
reported that another 2,307 vouchers were processed through the legacy
system--the Reserve Travel System (RTS). Of those processed through
RTS, Air Force DTS program officials stated that 338 travel vouchers
should have been processed through DTS. DTS Air Force program officials
further stated that they submitted to the PMO-DTS the number of travel
vouchers processed through RTS each month. These data are used by the
PMO-DTS to update the DTS Voucher Analysis Model. However, neither the
Air Force nor the PMO-DTS have verified the accuracy and reliability of
the data. Therefore, the accuracy of the utilization rates reported for
the Air Force by the PMO-DTS is not known. As shown in table 3, PMO-DTS
officials reported utilization data for the Air Force from a low of 29
percent (January 2006) to a high of 48 percent (November 2005) during
the 7-month period ending April 2006.
Because Army and Navy DTS program officials did not have the
information to identify the travel transactions that should have been
processed through DTS, the Army and Navy did not have a basis for
evaluating DTS utilization at their respective military locations and
activities. Furthermore, Navy DTS program officials indicated that the
utilization data that the PMO-DTS program officials reported for the
Navy were not accurate. According to Navy DTS program officials, the
Navy's primary source of utilization data was the monthly metrics
reports provided by the PMO-DTS, but Navy DTS program officials
questioned the accuracy of the Navy utilization reports provided by the
PMO-DTS.
* For example, the Navy PMO-DTS utilization site report has a site name
of Ballston, Va; however, Ballston, Va. is not listed on the map site
names on the DTS contractor's database. As a result, the PMO-DTS Navy
utilization report for this location indicates no usage every month.
Our analysis indicated that this was 1 of at least 33 similar instances
where no usage was reported for a nonexistent location. Navy DTS
program officials stated that an effort is underway to "re-map" all
Navy organizations to the correct site name, but as of June 2006 this
effort had not been completed.
* Another example indicates the inconsistencies that exist in the
different information used by the Navy and the PMO-DTS program
officials to report utilization rates for the Navy. The PMO-DTS program
officials reported that the Navy had a total of 9,400 signed, original
vouchers processed through DTS during December 2005; however, this is
less than the 10,523 reported by the DTS contractor for the same month.
According to Navy DTS program officials, they have not been able to
confirm whether either figure is correct. Since the number of DTS
vouchers is required to calculate utilization, the Navy is unable to
determine the accuracy of the utilization metrics reported by the PMO-
DTS officials, as shown in table 3.
DOD Has Taken Steps to Improve DTS Utilization, but Further Action Is
Needed:
While the military services have issued various memorandums that direct
or mandate the use of DTS to the fullest extent possible at those sites
where DTS has been deployed, resistance still exists. As highlighted
below, deployed sites are still using non-DTS systems, or legacy
systems, to process TDY travel.
* The Army issued a memorandum in September 2004 directing each Army
installation to fully disseminate DTS to all travelers within 90 to 180
days after Initial Operating Capability[Footnote 30] (IOC) at each
installation.[Footnote 31] Subsequently in September 2005, DFAS
officials reported that 390,388 travel vouchers were processed through
the Army's legacy system--the Windows Integrated Automated Travel
System, but DFAS officials could not provide a breakout of how many of
the 390,388 travel vouchers should have been processed through DTS.
* The Air Force issued a memorandum in November 2004 that stressed the
importance of using DTS once it was implemented at an installation. The
Air Force memorandum specifically stated that business, local, and
group travel vouchers should be electronically processed through DTS
and that travel claims should not be submitted to the local finance
office for processing. However, we found that Air Force travelers
continued to process travel claims through legacy systems, such as RTS.
For example, during the month of November 2005, the Air Force reported
that 3,277 business vouchers, 1,875 local vouchers, and 1,815 group
vouchers were processed through RTS that should have been processed
through DTS. Additionally, a DFAS internal review[Footnote 32] analyzed
Air Force vouchers during the period January 2005 through June 2005, at
locations where DTS was deployed, and found that Air Force travelers
used legacy systems to process 79 percent of all routine TDY
transactions.
* The Navy issued a memorandum in May 2005 that directed the use of DTS
to generate travel orders throughout all Navy locations. Navy DTS
program officials reported in an April 2006 briefing that 18,300 travel
vouchers were processed in DTS during the month of March 2006, but that
over 90,000 travel vouchers were still being processed monthly through
the Integrated Automated Travel System--a legacy system.
Thus, despite memoranda issued by the military services, it appears
that DTS continues to be underutilized by the military services. As
discussed in our September 2005 testimony and January 2006
report,[Footnote 33] the unnecessary continued use of the legacy travel
systems results in the inefficient use of funds because the department
is paying to operate and maintain duplicative systems that perform the
same function--travel.
Besides the memorandums, DOD is taking other actions to increase DTS
utilization as the following examples illustrate.
* The Assistant Secretary of the Army for Financial Management
(Financial & Accounting Oversight Directorate) holds monthly Senior
Focus Group meetings with the installation leadership of major commands
to discuss DTS utilization issues and possible corrective actions.
* The Navy conducts quarterly video and telephone conferences with
major commands and contacts commands with low usage to determine the
causes for low DTS usage.
* The PMO-DTS conducts monthly working group meetings with the military
service and defense agency DTS program officials to discuss DTS
functionality issues and concerns, DTS usage, and other related DTS
issues.
Although the military services have issued various memorandums aimed at
increasing the utilization of DTS, the military service DTS program
officials all pointed to ineffective training as a primary cause of DTS
not being utilized to a far greater extent. The following examples
highlight the concerns raised by the military service officials.
* Army DTS program officials emphasized that the DTS system is complex
and the design presents usability challenges for users--especially for
first-time or infrequent users. They added that a major concern is that
there is no PMO-DTS training for existing DTS users as new
functionality is added to DTS. These officials stated that the PMO-DTS
does not do a good job of informing users about functionality changes
made to the system. We inquired if the Help Desk was able to resolve
the users' problems, and the Army DTS officials simply stated "no." The
Army officials further pointed out that it would be beneficial if the
PMO-DTS improved the electronic training on the DTS Web site and made
the training documentation easier to understand. Also, improved
training would help infrequent users adapt to system changes. The Army
officials noted that without some of these improvements to resolve
usability concerns, DTS will continue to be extremely frustrating and
cumbersome for travelers.
* Navy DTS program officials stated that DTS lacks adequate user/
traveler training. The train-the-trainer concept of training system
administrators who could then effectively train all their travelers has
been largely unsuccessful. According to Navy officials, this has
resulted in many travelers and users attempting to use DTS with no or
insufficient training. The effect has frustrated users at each step of
the travel process and has discouraged use of DTS.
* Air Force officials stated that new DTS system releases are
implemented with known problems, but the sites are not informed of the
problems. Workarounds are not provided until after the sites begin
encountering problems. Air Force DTS program officials stated that DTS
releases did not appear to be well tested prior to implementation. Air
Force officials also stated that there was insufficient training on new
functionality. PMO-DTS and DTS contractor program officials believed
that conference calls to discuss new functionality with the sites were
acceptable training, but Air Force officials did not agree. The Air
Force finance office was expected to fully comprehend the information
received from those conference calls and provide training on the new
functionality to users/approvers, but these officials stated that this
was an unrealistic expectation.
Previously Reported DTS Requirements Management and Testing
Deficiencies Have Not Been Resolved:
Our September 2005 testimony and January 2006[Footnote 34] report noted
problems with DTS's ability to properly display flight information and
traced those problems to inadequate requirements management and
testing. DOD stated that it had addressed those deficiencies and in
February 2006, we again tested the system to determine whether the
stated weaknesses had been addressed. We found that similar problems
continue to exist. We also identified additional deficiencies in DTS's
ability to display flights that comply with the Fly America
Act.[Footnote 35] DTS's inability to display flights that comply with
the Fly America Act places the traveler who purchases a ticket or the
individual authorizing, certifying, or disbursing a payment made when a
ticket is paid for directly by DOD through a centrally billed account
at unnecessary risk of personal liability. Once again, these problems
can be traced to ineffective requirements management and testing
processes. Properly defined requirements are a key element in systems
that meet their cost, schedule, and performance goals since they define
(1) the functionality that is expected to be provided by the system and
(2) the quantitative measures by which to determine through testing
whether that functionality is operating as expected.
We briefed PMO-DTS officials on the results of our tests and in May
2006 the officials agreed that our continued concerns about the proper
display of flight information and compliance with the Fly America Act
were valid. PMO-DTS officials stated that the DTS technology refresh,
which is to be completed in September 2006, should address some of our
concerns. While these actions are a positive step forward, they do not
address the fundamental problem that DTS's requirements are still
ambiguous and conflicting--a primary cause of the previous problems.
Until a viable requirements management process is developed and
effectively implemented, the department (1) cannot develop an effective
testing process and (2) will not have reasonable assurance the project
risks have been reduced to acceptable levels.
Providing Complete Flight Information Has Been a Continuing Problem:
In our earlier testimony and report,[Footnote 36] we noted that DOD did
not have reasonable assurance that the flights displayed met the stated
DOD requirements. Although DOD stated in each case that our concerns
had been addressed, subsequent tests found that the problems had not
been corrected. Requirements represent the blueprint that system
developers and program managers use to design, develop, and acquire a
system. Requirements should be consistent with one another, verifiable,
and directly traceable[Footnote 37] to higher-level business or
functional requirements. It is critical that requirements be carefully
defined and that they flow directly from the organization's concept of
operations (how the organization's day-to-day operations are or will be
carried out to meet mission needs). Improperly defined or incomplete
requirements have been commonly identified as a cause of system failure
and systems that do not meet their cost, schedule, or performance
goals.
Requirements represent the foundation on which the system should be
developed and implemented. As we have noted in previous
reports,[Footnote 38] because requirements provide the foundation for
system testing, significant defects in the requirements management
process preclude an entity from implementing a disciplined testing
process. That is, requirements must be complete, clear, and well
documented to design and implement an effective testing program. Absent
this, an organization is taking a significant risk that its testing
efforts will not detect significant defects until after the system is
placed into production. Our February 2006 analysis of selected flight
information disclosed that DOD still did not have reasonable assurance
that DTS displayed flights in accordance with its stated requirements.
We analyzed 15 U.S. General Services Administration (GSA) city
pairs,[Footnote 39] which should have translated into 246 GSA city pair
flights for the departure times selected. However, we identified 87
flights that did not appear on one or more of the required listings
based on the DTS requirements. For instance, our analysis identified 44
flights appearing on other DTS listings or airline sites that did not
appear on the 9:00 am DTS listing even though those flights (1) met the
12-hour flight window[Footnote 40] and (2) were considered GSA city
pair flights--two of the key DTS requirements the system was expected
to meet.
After briefing PMO officials on the results of our analysis in February
2006, the PMO-DTS employed the services of a contractor to review DTS
to determine the specific cause of the problems and recommend
solutions. In a March 2006 briefing, the PMO-DTS acknowledged the
existence of the problems, and identified two primary causes. First,
part of the problem was attributed to the methodology used by DTS to
obtain flights from the Global Distribution System (GDS). The PMO-DTS
stated that DTS was programmed to obtain a "limited" amount of data
from GDS in order to reduce the costs associated with accessing GDS.
This helps to explain why flight queries we reviewed did not produce
the expected results. To resolve this particular problem, the PMO-DTS
proposed increasing the amount of data obtained from GDS. Second, the
PMO-DTS acknowledged that the system testing performed by the
contractor responsible for developing and operating DTS was inadequate
and, therefore, there was no assurance that DTS would provide the data
in conformance with the stated requirements. This weakness was not new,
but rather reconfirms the concerns discussed in our September 2005
testimony and January 2006 report[Footnote 41] related to the testing
of DTS.
Our analysis also found that DOD did not have reasonable assurance that
the system displayed flights in compliance with the requirements of the
Fly America Act. In 1996, Congress assigned the Administrator, GSA, the
responsibility[Footnote 42] to determine the situations for which
appropriated funds could be used consistent with the Fly America Act,
and GSA has published its rules in the Federal Travel Regulation
(FTR).[Footnote 43] Within the basic guidelines that GSA publishes,
agencies must establish "internal procedures" to ensure that agency
reimbursements with federal funds for travelers' air carrier expenses
are made only in compliance with the Fly America Act and the FTR rules.
As a result, DTS places the traveler who purchases a ticket or the
individual authorizing, certifying, or disbursing a payment made when a
ticket is paid for directly by DOD--such as those tickets purchased
using a centrally billed account--at unnecessary risk of personal
liability. DOD guidance expressly states that for code-sharing[Footnote
44] airline tickets related to foreign travel (1) the entire airline
ticket must be issued by and on the U.S.-flag carrier (not necessarily
the carrier operating the aircraft) and (2) the flight must be between
a centennial United States and a foreign destination. If these
conditions are not met, DOD requires a determination that a U.S.-flag
carrier is not available or use of a non-U.S.-flag carrier is
necessary.[Footnote 45] These requirements are commonly referred to as
the Fly America Act requirements. According to PMO-DTS officials, DTS's
requirements are intended to comply with the Fly America Act. However,
our analysis of March 2006 flight display data identified several
instances in which flights were displayed to the DOD traveler that did
not meet the requirements of the Fly America Act. For example, six of
the first seven flights displayed between Santiago, Chile, and San
Antonio, Texas, did not appear to comply with the Fly America Act
requirements since they did not involve a U.S.-flag carrier. More
importantly, several flights that appeared later in the listing and
involved U.S.-flag carriers were more advantageous to the traveler
because they required less actual travel time. Figure 1 shows the DTS
display of flights.
Figure 1: March 2006 DTS Display of Flights between Santiago, Chile,
and San Antonio, Texas:
[See PDF for image]
Source: DTS image from 3/24/2006.
[End of figure]
According to DTS program officials, after our discussions relating to
the flight displays and compliance with the Fly America Act, they did a
"requirements scrub" to define the requirements that should be used to
display flights, including those requirements relating to displaying
flights that comply with the Fly America Act. The previous requirement
stated that "DTS shall examine international trip records for
compliance with DOD policy on the use of non-U.S.-flag carriers." The
revised requirement relating to international flights stated that the
system should display flights that are (1) part of the GSA city pair
program or (2) offered by U.S. carriers. If the system cannot find
flights that meet these criteria, then the system is expected to
instruct the user to contact their CTO to arrange the flight. According
to PMO-DTS officials, this change has been incorporated into the
production system. We conducted a limited nonstatistical test to
determine if the examples of flights not complying with the Fly America
Act identified in our earlier tests had been eliminated and found that
these flights no longer appeared on the DTS displayed flights. However,
as we noted, the DOD policy is compliant with the Fly America Act
requirements and this was a DTS requirement in effect when we
identified the examples of flight displays not complying with the Fly
America Act. In effect, this is another example of (1) inadequate
testing by the DTS contractor and (2) DOD's inability to ensure the
system is meeting its requirements. Until DOD effectively analyzes and
properly documents the functionality it desires, it has little
assurance that the proper requirements have been defined.
DOD's Planned Corrective Actions Will Not Address Fundamental
Requirements Management Problems:
While DOD's planned actions, if effectively implemented, should address
several of the specific weaknesses we identified related to flight
displays and the Fly America Act, they fall short of addressing the
fundamental problems that caused those weaknesses--inadequate
requirements management. DTS's requirements continue to be ambiguous.
For example, a system requirement was changed to "display," that is,
show the fares relating to the full GSA city pair fare only if the GSA
city pair fare with capacity limits[Footnote 46] was not available.
Based upon information provided by PMO-DTS officials, after the
requirement was supposed to have been implemented, both fare types were
shown on the DTS display screen. PMO-DTS officials stated that although
both fares were shown, DTS was still expected to book the lower fare
and that the requirement was really designed to ensure that the lower
fare was booked. This requirement is ambiguous because it is not clear
what the word "display" means in this context. Based upon the stated
requirement, the most common interpretation would be that the word
display implies information that is provided (or shown) to the DOD
traveler. However, based on the PMO-DTS official's explanation, the
word display, in fact, means the fare that is booked. This type of
ambiguity was one cause of problems we noted in the past where testing
did not identify system defects and DTS did not properly display the
proper flight information to the user.
Furthermore, DOD is currently undergoing a technology upgrade of DTS
that is scheduled for completion by September 30, 2006. This technology
upgrade is expected to provide additional functionality; however, DOD
still has not adequately defined the requirements that are needed to
define flight displays for DOD travelers. According to DTS program
officials and the contractor responsible for the technology upgrade,
the upgrade is intended to do the following:
* Replace the current display of up to 25 flights on one page in a
predetermined order[Footnote 47] and separate the 25 flights into three
categories--GSA city pair flights, Other Government Fares, and Other
Unrestricted Flights--and then sort the flights by additional criteria
such as elapsed travel time (rather than the current flight time), time
difference from the requested departure time, number of stops, and
whether the flight is considered a direct flight. This approach, if
effectively implemented, addresses one problem we noted with the
current process where flight time[Footnote 48] rather than elapsed
travel time is used as one of the sorting criteria. It will also
present flights that have the shortest duration in relation to the
requested departure time at the top of the listing.
* Display the prices on all flights returned to the traveler. The
current system displays the prices for the GSA city pair flights and
allows the traveler to request prices for up to 10 additional flights
at a time. This significantly improves the ability of the system to
present information to the traveler that can be used to select the best
flight for the government and allows the system to help ensure that the
lowest cost flights are selected by the user.[Footnote 49] This is
especially true when a GSA city pair fare is not available. According
to DOD officials, it is cost prohibitive to obtain the pricing
information for non-GSA city pair flights using the current
technology.[Footnote 50]
Although these planned improvements should provide the DOD traveler
with better travel information, they still fall short of adequately
defining the requirements that should be used for displaying flights.
For example, DOD has retained a requirement to display 25 flights for
each inquiry. However, it has not determined (1) whether the rationale
for that requirement is valid and (2) under what conditions flights
that are not part of the GSA city pair program should be displayed. For
example, we found that several DTS flights displayed to the user
"overlap"[Footnote 51] other flights. Properly validating the
requirements would allow DOD to obtain reasonable assurance that its
requirements properly define the functionality needed and the business
rules necessary to properly implement that functionality. As previously
noted, requirements that are unambiguous and consistent are fundamental
to providing reasonable assurance that a system will provide the
desired functionality. Until DOD improves DTS requirement management
practices, it will not have this assurance.
Conclusions:
Overhauling the department's antiquated travel management practices and
systems has been a daunting challenge for DOD. While it was widely
recognized that this was a task that needed to be accomplished and
savings could result, the underlying assumptions in support of those
savings are not based on reliable data and therefore it is questionable
whether the anticipated savings will materialize. Even though the
overall savings are questionable, the successful implementation of DTS
is critical to reducing the number of stovepiped, duplicative travel
systems throughout the department. We have reported on numerous
occasions that reducing the number of business systems within DOD can
translate into savings that can be used for other mission needs.
Furthermore, the shift of DTS to BTA, which makes DTS an enterprisewide
endeavor, should help in making DTS the standard integrated, end-to-end
travel system for business travel. Management oversight is essential
for this to become a reality. Equally important, however, will be the
department's ability to resolve the long-standing difficulties that DTS
has encountered with its requirements management and system testing.
Until these issues are resolved, more complete utilization of DTS will
be problematic.
Recommendations for Executive Action:
To improve the department's management and oversight of DTS, which has
been declared a DOD enterprise business system, we recommend that the
Secretary of Defense direct the Under Secretary of Defense (Personnel
and Readiness) and the Director, Business Transformation Agency, to
jointly take the following four actions:
* Evaluate the cost effectiveness of the Navy continuing with the CTO
management fee structure versus adopting the revised CTO fee structure,
once the new contracts have been awarded.
* Develop a process by which the military services develop and use
quantitative data from DTS and their individual legacy systems to
clearly identify the total universe of DTS-eligible transactions on a
monthly basis. At a minimum, these data should be used to update the
DTS Voucher Analysis Model to report DTS actual utilization rates.
* Require the PMO-DTS to provide a periodic report on the utilization
of DTS to the Under Secretary of Defense (Personnel and Readiness) and
the Director, Business Transformation Agency, once accurate data are
available. The report should continue until the department has
reasonable assurance that DTS is operating as intended at all 11,000
locations. The report should identify at a minimum (1) the number of
defense locations at which DTS has been deployed, (2) the extent of DTS
utilization at these sites, (3) steps taken or to be taken by the
department to improve DTS utilization, and (4) any continuing problems
in the implementation and utilization of DTS.
* Resolve inconsistencies in DTS requirements, such as the 25 flight
display, by properly defining the (1) functionality needed and (2)
business rules necessary to properly implement the needed
functionality.
Agency Comments and Our Evaluation:
We received written comments on a draft of this report from the Under
Secretary of Defense (Personnel and Readiness), which are reprinted in
appendix II. DOD concurred with three and partially concurred with one
of the recommendations. In regard to the recommendations with which the
department concurred, it briefly outlined the actions it planned to
take in addressing two of the three recommendations. For example, the
department noted the difficulties in obtaining accurate utilization
data from the existing legacy systems, but stated that the Office of
the Under Secretary of Defense (Personnel and Readiness) and BTA will
evaluate methods for reporting actual DTS utilization.
Additionally, DOD noted that the Defense Travel Management Office
developed and implemented a requirements change management process on
May 1, 2006. In commenting on the report, the department stated that
this process is intended to define requirements and track the entire
life cycle of the requirements development process. As reiterated in
this report, and discussed in our September 2005 testimony and January
2006 report,[Footnote 52] effective requirements management has been an
ongoing concern, and we fully support the department's efforts to
improve its management oversight of DTS's requirements. In this regard,
the department needs to have in place a process that provides DOD
reasonable assurance that (1) requirements are properly documented and
(2) requirements are adequately tested as recommended in our January
2006 report.[Footnote 53] This process should apply to all existing
requirements as well as any new requirements. As discussed in this
report, we reviewed some of the requirements in May 2006, that were to
have followed the new requirements management process, and found
problems similar to those noted in our January 2006 report. While we
did not specifically review the new process, if it does not include an
evaluation of existing requirements, the department may continue to
experience problems similar to those we previously identified.
DOD partially concurred with our recommendation to evaluate the cost
effectiveness of the Navy continuing with the CTO management fee
structure. DOD stated that all military service secretaries should
participate in an evaluation to determine the most cost-effective
payment method to the CTOs. DOD's response indicated that the Defense
Travel Management Office is currently procuring commercial travel
services for DOD worldwide in a manner that will ensure evaluation of
cost effectiveness for all services. If DOD proceeds with the actions
outlined in its comments, it will meet the intent of our
recommendation.
Finally, DOD strongly objected to our finding that the personnel
savings are unrealistic. In its comments, the department stated that
DOD is facing an enormous challenge and the department continues to
identify efficiencies and eliminate redundancies to help leverage
available funds. We fully recognize that the department is attempting
to improve the efficiency and effectiveness of its business operations.
In fact, the Comptroller General of the United States testified in
August 2006 that increased commitment by the department to address
DOD's numerous challenges represents an improvement over past
efforts.[Footnote 54]
The fact remains, however, that the results of an economic analysis are
intended to help management decide if future investments in a given
endeavor are worthwhile. In order to provide management with this
information it is imperative that the underlying assumptions in an
economic analysis be supported by valid assumptions. The September 2003
economic analysis noted that personnel savings of $54.1 million, as
shown in table 2 of this report, would be realized by the department
annually for fiscal years 2009 through 2016. However, based upon our
review and analysis of documentation and discussion with department
personnel we found that the underlying assumptions in support of the
$54.1 million were not valid.
Furthermore, as noted in the report Air Force and Navy DTS program
officials stated that they did not anticipate a reduction in the number
of personnel with the full implementation of DTS. Further, as discussed
in the report, the Naval Cost Analysis Division review of the DTS
economic analysis noted that approximately 40 percent of the Navy's
total costs, including personnel costs, in the DTS life-cycle cost
estimates could not be validated because credible supporting
documentation was lacking.
The report does note that Air Force and Navy DTS program officials
noted that while they did not anticipate a reduction in the number of
personnel, there would be a shifting of personnel to other functions.
The report further points out that DOD officials responsible for
reviewing economic analyses stated that while shifting personnel to
other functions is considered a benefit, it should be considered an
intangible benefit rather than tangible dollar savings since the
shifting of personnel does not result in a reduction of DOD
expenditures. Additionally, in its comments the department provided no
new data that was counter to our finding.
We are sending copies of this report to the Secretary of Defense; Under
Secretary of Defense (Comptroller); the Under Secretary of Defense for
Acquisition, Technology, and Logistics; the Under Secretary of Defense
(Personnel and Readiness); the Director, Business Transformation
Agency; and the Director, Office of Management and Budget. Copies of
this report will be made available to others upon request. In addition,
the report is available at no charge on the GAO Web site at [Hyperlink,
http://www.gao.gov].
If you or your staff have any questions on matters discussed in this
report, please contact McCoy Williams at (202) 512-9095 or
williamsm1@gao.gov or Keith A. Rhodes at (202) 512-6412 or
rhodesk@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
report. Key contributors to this report are listed in appendix III.
Signed by:
McCoy Williams:
Director:
Financial Management and Assurance:
Signed by:
Keith A. Rhodes:
Chief Technologist:
Applied Research and Methods Center for Technology and Engineering:
List of Congressional Addressees:
The Honorable John Warner:
Chairman:
The Honorable Carl Levin:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Ted Stevens:
Chairman:
The Honorable Daniel K. Inouye:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable Susan M. Collins:
Chairman:
The Honorable Joseph I. Lieberman:
Ranking Minority Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Duncan L. Hunter:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
The Honorable C. W. Bill Young:
Chairman:
The Honorable John P. Murtha:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
The Honorable Tom Davis:
Chairman:
The Honorable Henry A. Waxman:
Ranking Minority Member:
Committee on Government Reform:
House of Representatives:
The Honorable Norm Coleman:
Chairman:
Permanent Subcommittee on Investigations:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Tom Coburn:
Chairman:
Subcommittee on Federal Financial Management, Government Information
and International Security:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
[End of section]
Appendix I: Scope and Methodology:
To assess the reasonableness of the key assumptions made by DOD to
arrive at the net annual estimated savings of over $56 million shown in
the September 2003 economic analysis addendum, we (1) ascertained if
the economic analysis was prepared in accordance with the prescribed
standards, (2) analyzed two key assumptions that represent the largest
dollar savings for the DTS program, and (3) analyzed the supporting
documentation related to these two assumptions to determine whether the
assumptions were valid. Furthermore, we met with the military services
and DFAS officials to ascertain their specific concerns with the
estimated savings. Further, we met with Program Analysis and Evaluation
officials to identify any issues they had with the DTS estimated
savings. In performing this body of work, we relied heavily upon the
expertise of our Applied Research and Method's Center for Economics.
To determine the actions being taken to enhance the utilization of DTS,
we met with military services officials to obtain an understanding of
the specific actions that were being taken. In addition, we obtained
and reviewed various memorandums related to the utilization of DTS. We
also obtained an overview of the method and data used by the PMO-DTS to
report the rate of DTS utilization for the various DOD components. We
also met with the military services to ascertain how they use the PMO-
DTS data to monitor their respective utilization and whether they
augment these data with any other data and if so, the source of those
data.
To ascertain whether DOD has reasonable assurance that the testing of
DTS was adequate, and thereby ensure accurate flight information was
displayed, we met with Northrop Grumman and the PMO-DTS officials to
obtain an explanation of the corrective actions that were to have been
implemented. To ascertain if the noted corrective actions have been
successfully implemented, we analyzed 246 GSA city pair flights to
determine if the information being displayed to the traveler was
consistent with DTS's stated requirement.
We did not review the accuracy and reliability of the specific dollar
amounts shown in the September 2003 economic analysis. Given the
department's previously reported problems related to financial
management,[Footnote 55] we have no assurance that the underlying data
supporting the economic analysis were complete. Furthermore, our
emphasis was directed more towards the validity of the assumptions that
were used to arrive at the net annual estimated savings of over $56
million. We determined that the data were sufficiently reliable for the
purpose of this audit. We performed our audit work from October 2005
through July 2006 in accordance with U.S. generally accepted government
auditing standards.
We requested comments on a draft of this report from the Secretary of
Defense or his designee. We received written comments from the Under
Secretary of Defense (Personnel and Readiness), which are reprinted in
appendix II.
[End of section]
Appendix II: Comments from the Department of Defense:
Under Secretary Of Defense:
4000 Defense Pentagon:
Washington, DC 20301- 4000:
Personnel And Readiness:
SEP 01 12006:
Mr. McCoy Williams:
Director, Financial Management and Assurance:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Williams:
This is the Department of Defense response to the Government
Accountability Office draft report GAO-06-980, "Defense Travel System:
Reported Savings Questionable and Implementation Challenges Remain,"
dated July 28, 2006 (GAO Code 195072). The Department's comments are
enclosed.
I strongly object to the study's finding that "personnel savings are
unrealistic" merely because savings were applied to compelling,
unfunded needs. The Department is facing an enormous challenge and must
successfully prosecute today's war while still making investments that
safeguard the future. Recognizing fiscal constraints, the Department
continues to identify efficiencies and eliminate redundancies to help
leverage available funds. For example, we are growing a larger and more
capable Special Forces capability --without a net increase in manpower.
This finding, if accepted, would disincentivize the very institutional
behavior we should all actively promote.
The Department appreciates the opportunity to comment. For questions
concerning this report, please contact Ms. Margaret Hebert, Defense
Travel Management Office, at (703) 696-6795.
Signed by:
David S. C. Chu:
Enclosures:
As stated:
GAO Draft Report Dated July 28, 2006 GAO-06-980 (GAO Code 195072):
"Defense Travel System Reported Savings Questionable And Implementation
Challenges Remain"
Department Of Defense Comments To The GAO Recommendations:
Recommendation 1: The GAO recommended that the Secretary of Defense
direct the Under Secretary of Defense (Personnel and Readiness) and the
Director, Business Transformation Agency, to evaluate the cost
effectiveness of the Navy continuing with the Commercial Travel Office
(CTO) management fee structure versus adopting the revised CTO fee
structure, once the new contracts have been awarded. (p. 43/GAO Draft
Report):
DOD Response: Partially concur. Recommendation should direct the Under
Secretary of Defense (Personnel and Readiness), the Director, Business
Transformation Agency, and the Service Secretaries to evaluate all
methods to determine the most cost effective payment of Commercial
Travel Office fees. Evaluation should not be specific to one method
and/or one Service.
The Defense Travel Management Office (DTMO) is currently procuring
Commercial Travel Services for DoD worldwide. The procurement process
will ensure evaluation of cost effectiveness for all Services.
Using an indefinite delivery, indefinite quantity procurement vehicle,
vendors will be placed on contract based on evaluation of their
management and transaction fees. Vendors placed on contract can then
bid on the DoD task orders. During the evaluation for task order award,
fees will also be evaluated to determine best value and the appropriate
business model for each of the task orders. The DTMO anticipates
contact awards in the first quarter FY07 and task order awards
beginning the third quarter FY07.
Recommendation 2: The GAO recommended that the Secretary of Defense
direct the Under Secretary of Defense (Personnel and Readiness) and the
Director, Business Transformation Agency, develop a process by which
the military services develop and use quantitative data from Defense
Travel System (DTS) and their individual legacy systems to clearly
identify the total universe of DTS-eligible transactions on a monthly
basis. At a minimum, these data should be used to update the DTS
Voucher Analysis Model to report DTS actual utilization rates. (p. 43/
GAO Draft Report):
DOD Response: Concur. Updated data should be used in the DTS Voucher
Analysis Model when utilization rates are reported. However, obtaining
quantitative data for the individual legacy systems involves a labor
and manually intensive analysis. Significant additional resources would
be required.
The Office of the Under Secretary of Defense (Personnel & Readiness)
and the Business Transformation Agency will evaluate methods for
reporting actual DTS utilization.
Recommendation 3: The GAO recommended that the Secretary of Defense
direct the Under Secretary of Defense (Personnel and Readiness) and the
Director, Business Transformation Agency, to require the PMO-DTS to
provide a periodic report on the utilization of DTS to the Under
Secretary of Defense (Personnel and Readiness) and the Director,
Business Transformation Agency, once accurate data are available. (p.
43/GAO Draft Report):
DOD Response: Concur.
Recommendation 4: The GAO recommended that the Secretary of Defense
direct the Under Secretary of Defense (Personnel and Readiness) and the
Director, Business Transformation Agency, to resolve inconsistencies in
DTS requirements, such as the 25 flight display, by properly defining
the (1) functionality needed and (2) business rules necessary to
properly implement the needed functionality. (p. 43/GAO Draft Report):
DOD Response: Concur. The newly established DTMO has developed and
implemented a well-defined requirements change management process. The
change management process defines requirements and tracks the entire
life cycle of the requirements development to include a follow-on
impact study of released functionalities. This change management
process was implemented on 1 May 2006.
[End of section]
Appendix III: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
McCoy Williams, (202) 512-9095 or williamsm1@gao.gov Keith A. Rhodes,
(202) 512-6412 or rhodesk@gao.gov:
Acknowledgments:
In addition to the above contacts, the following individuals made key
contributions to this report: Darby Smith, Assistant Director; J.
Christopher Martin, Senior-Level Technologist; F. Abe Dymond, Assistant
General Counsel; Beatrice Alff; Harold Brumm, Jr; Francine DelVecchio;
Jason Kelly; and Tarunkant Mithani.
FOOTNOTES
[1] Department of Defense, Report of the Department of Defense Task
Force to Reengineer Travel (Arlington, Va.: January 1995).
[2] DOD expects DTS to perform all functions related to travel or
ensure that other systems are provided with adequate information to
provide this functionality. For example, obligating funds associated
with travel is a necessary function, and DTS is expected to (1) make
sure that adequate funds are available before authorizing travel either
through information contained in its system or by obtaining the
necessary information from another system, (2) obligate funds through
issuance of approved travel orders, and (3) provide DOD's financial
management systems with the necessary information so that those systems
can record the obligation. Since DTS is required to ensure that all
travel-related functionality is properly performed, DOD commonly refers
to DTS as an "end-to-end travel system."
[3] As of September 2005, the department had estimated that DTS would
be fully deployed during fiscal year 2006.
[4] GAO, DOD Business Transformation: Defense Travel System Continues
to Face Implementation Challenges, GAO-06-18 (Washington, D.C.: Jan.
18, 2006), and DOD Business Transformation: Preliminary Observations on
the Defense Travel System, GAO-05-998T (Washington, D.C.: Sept. 29,
2005).
[5] The total estimated annual savings were $123.5 million and the
total estimated annual costs were $67.1 million for a net annual
savings of $56.4 million. The annual net savings are in constant fiscal
year 2003 dollars. The department estimated that savings would start in
fiscal year 2009.
[6] The economic analysis identified annual savings of $11.3 million
and $12.9 million for the Air Force and Navy, respectively.
[7] 49 U.S.C. § 40118(c). The act requires federal employees and their
dependents, consultants, contractors, grantees, and others performing
U.S. government-funded air travel to travel by U.S. certificated flag
air carriers except under certain circumstances, such as when travel by
a foreign air carrier is a matter of necessity as defined by the
statute or when U.S. certificated flag air carrier service is not
available.
[8] GAO-05-998T and GAO-06-18.
[9] Acceptable levels refer to the fact that any systems acquisition
effort will have risks and will suffer the adverse consequences
associated with defects in the processes. However, effective
implementation of disciplined processes, which includes project
planning and management, requirements management, risk management,
quality assurance, and testing, reduces the possibility of the
potential risks actually occurring and prevents significant defects
from materially affecting the cost, timeliness, and performance of the
project.
[10] Office of the Under Secretary of Defense (Comptroller), Department
of Defense Travel Reengineering Pilot Report to Congress (Arlington,
Va.: June 1997).
[11] A major automated information system is one in which the DOD
component head estimates that (1) program costs in any single year will
exceed $32 million in fiscal year 2000 constant dollars, (2) total
program costs will exceed $126 million in fiscal year 2000 constant
dollars, or (3) total life-cycle costs will exceed $378 million in
fiscal year 2000 constant dollars. The life-cycle cost is the total
cost to the government for an information system over its expected
useful life and includes the costs to acquire, operate, maintain, and
dispose of the system. DOD Instruction 5000.2, Operation of the Defense
Acquisition System, specifies current mandatory policies and procedures
for major acquisitions. The policy also specifies that the DOD Chief
Information Officer is the milestone decision authority, responsible
for program approval, for all major automated information systems.
[12] This is an addendum to the July 2003 DTS economic analysis.
[13] Examples of some of these DOD-wide programs, systems, and
initiatives besides DTS include the Standard Procurement System, the
Defense Integrated Military Human Resources System, and the Standard
Financial Information Structure.
[14] During fiscal years 2009 through 2016.
[15] American Express News Releases: American Express' Interactive
Travel Update (New York: Aug. 11, 2003),
http://corp.americanexpress.com/gcs/cards/us/ni/pr/081303.aspx.
[16] Defense Travel Region 6 includes the Air Force and defense
agencies in the states of Kentucky, Illinois, Indiana, Iowa, Michigan,
Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and
Wisconsin. The contract also applies to Army activities in 8 of the 11
states (excluding Kentucky, Missouri, and Nebraska). As discussed
later, the Navy uses a management fee contract, and is therefore not
included in the Defense Travel Region 6 contract.
[17] According to DTS officials, these savings are consistent with the
DTS contracts that have been awarded to small businesses. The average
savings per "no touch" ticket under these contracts is about $12.88.
Because the contractors are paid these fees directly by the traveler,
they are unable to determine the percentage of transactions that are
actually paid using the "no touch" rate.
[18] "DOD Retracts Solicitation for Travel Agency Services,"
FederalTimes.com (May 16, 2006), http://www.federaltimes.com/index.php?
(downloaded June 14, 2006).
[19] These savings translate to about 572,000 tickets annually.
[20] DOD Instruction 7041.3, Economic Analysis for Decisionmaking,
November 7, 1995.
[21] Office of Management and Budget, Circular No. A-94, Guidelines and
Discount Rates for Benefit-Cost Analysis of Federal Programs (Revised
Jan. 18, 2006).
[22] Department of Defense Instruction 5000.2, Operation of the Defense
Acquisition System, May 12, 2003.
[23] Department of Defense Regulation 5000.2-R, Interim Defense
Acquisition Guidebook (Oct. 30, 2002), para.c4.5.1.61, required the
Office of Program Analysis and Evaluation to assess certain aspects of
the economic analysis.
[24] Department of Defense Instruction 7041.3, Economic Analysis of
Decisionmaking (Nov. 7, 1995), and Office of Management and Budget
Revised Circular No. A-94, Guidelines and Discount Rates for Benefit-
Cost Analysis of Federal Programs (Oct. 29, 1992).
[25] Ronald W. Reagan National Defense Authorization Act for Fiscal
Year 2005, Pub. L. No. 108-375, § 332, 118 Stat. 1811, 1851-56 (Oct.
28, 2004) (codified, in part, at 10 U.S.C. §§ 186, 2222).
[26] DOD, DOD IT Business Systems Investment Review Process: Investment
Certification and Annual Review Process User Guidance (Apr. 10, 2006).
[27] GAO-05-998T and GAO-06-18.
[28] DOD developed a model in calendar year 2003 that compares the
expected usage against the actual usage. The expected usage is obtained
by using historical data, such as ticket counts, to determine the
expected number of vouchers processed by a given location. For example,
if a location had 1,000 vouchers as its expected number of vouchers per
the model, but now processes 750 actual vouchers through DTS, then the
PMO model considers that that location has achieved a 75 percent
utilization rate. It then takes the individual computations for each
DTS location and "rolls them up" to determine the total utilization for
individual service performance on a monthly basis.
[29] GAO, Financial Management Systems: Additional Efforts Needed to
Address Key Causes of Modernization Failures, GAO-06-184 (Washington,
D.C.: Mar. 15, 2006), and Financial Management Systems: Lack of
Disciplined Processes Puts Implementation of HHS' Financial System at
Risk, GAO-04-1008 (Washington, D.C.: Sept. 23, 2004).
[30] When a military service location has declared Initial Operating
Capability (IOC), that location moves into an "operational phase" in
which all units/activities are fully proliferated for use of DTS.
[31] The memorandum included a list of sites to which DTS should be
fully disseminated and the types of vouchers that must be processed
through DTS.
[32] Department of Defense, Defense Finance and Accounting Service,
Internal Review, Audit of the Defense Travel System (DTS), October 2005
- February 2006, CO06SRP005AR (Arlington, Va.: Feb. 22, 2006).
[33] GAO-05-998T and GAO-06-18.
[34] GAO-05-998T and GAO-06-18.
[35] 49 U.S.C. §40118, commonly referred to as the Fly America Act,
requires federal employees and their dependents, consultants,
contractors, grantees, and others performing U.S. government-funded air
travel to travel by U.S. certificated flag air carriers except under
certain circumstances, such as when travel by foreign air carrier is a
matter of necessity as defined by the statute or when U.S. certificated
flag air carrier service is not available. See 41C.F.R. § 301-10.135.
[36] GAO-05-998T and GAO-06-18.
[37] Traceability allows the user to follow the life of the requirement
both forward and backward through these documents and from origin
through implementation. Traceability is also critical to understanding
the parentage, interconnections, and dependencies among the individual
requirements. This information in turn is critical to understanding the
impact when a requirement is changed or deleted.
[38] See, for example, GAO-04-1008 and Army Depot Maintenance:
Ineffective Oversight of Depot Maintenance Operations and System
Implementation Efforts, GAO-05-441 (Washington, D.C.: June 30, 2005).
[39] GSA awards contracts to airlines to provide flight services
between pairs of cities. This is commonly referred to as the GSA city
pair program. Under this program (1) no advanced ticket purchases are
required, (2) no minimum or maximum length of stay is required, (3)
tickets are fully refundable and no charges are assessed for
cancellations or changes, (4) seating is not capacity controlled (i.e.,
as long as there is a coach-class seat on the plane, the traveler may
purchase it), (5) no blackout dates apply, (6) fare savings average 70
percent over regular walk-up fares, and (7) fares are priced on one-way
routes permitting agencies to plan for multiple destinations. We
selected the first 15 city pairs that were provided by DOD to GSA in
support of a GSA study on accuracy of flight displays and fare
information by DTS and the GSA eTravel providers.
[40] A flight window is the amount of time before and after a specified
time and is used for determining the flights that should be displayed.
DTS uses a 12-hour flight window for domestic flights and a 24-hour
flight window for foreign flights. The system is also expected to
display up to 25 flights for the flight window.
[41] GAO-05-998T and GAO-06-18.
[42] See 49 U.S.C. § 40118(c).
[43] See 41 C.F.R. §301-10.143.
[44] A code-share agreement is a marketing arrangement in which an
airline places its designator code on a flight operated by another
airline and sells, advertises, and issues tickets as its own flights.
U.S. carriers must obtain authorization for foreign code-share
operations from the Department of Transportation.
[45] JTR, C2204-C, and JFTR, U3125-C.
[46] Several GSA city pair flights have two contract fares. These fares
are commonly referred to as an unrestricted GSA city pair fare and a
GSA city pair fare with capacity limits. The latter fare is cheaper
than the unrestricted GSA city pair fare and applies to a limited
number of seats when available. However, it has no other restrictions.
[47] Under the current release, DTS will attempt to display up to 25
flights in two categories--GSA city pairs and other. The flights within
GSA city pairs are then displayed according to elapsed travel time.
[48] Flight time is the actual time a plane is in the air while elapsed
travel time is the total time from the original departure to the
ultimate arrival. For non stop flights, the times are the same.
However, in cases of connecting flights, the "layover" time is only
included in the elapsed travel time.
[49] According to DOD officials, once the display of pricing
information is implemented, the system will require a justification
when the lowest cost flight is not selected. This edit would be similar
to the edit for GSA city pair fares, which requires the user to provide
a justification if a GSA city pair flight is available but not
selected. When a user does not select the lowest cost fare, unless it
is a GSA city pair fare, the user would be required to provide a
justification. A justification is not expected when the user selects a
GSA city pair fare rather than a lower cost fare, assuming one is
available, which is displayed by DTS because of government policy that
encourages the use of the GSA city pair program.
[50] DOD estimates that the current technological approach--querying
the GDS for the prices of the flights displayed to the user--would cost
about $6 million for the 3 million trips that DTS is expected to book
each year. DOD did not provide the estimated fees that will be paid for
the technology that will enable these prices to be displayed.
[51] For example, DTS displayed a GSA city pair flight between
Washington, D.C., and Atlanta, Ga. that departed at 10:05 a.m. and
arrived at 1:50 p.m. This flight "overlapped" two other GSA city pair
direct flights that were available and required less travel time. One
flight left at 10:05 a.m. and arrived at 12:02 p.m. while another left
at 11:05 a.m. and arrived at 12:56 p.m. Furthermore, DTS displayed a
non-GSA city pair flight that left at 9:20 a.m. and arrived at 1:05
p.m. This flight did not meet any of the acceptable criteria for not
using a GSA city pair flight.
[52] GAO-05-998T and GAO-06-18.
[53] GAO-06-18.
[54] GAO, Department of Defense: Sustained Leadership Is Critical to
Effective Financial and Business Management Transformation, GAO-06-
1006T (Washington, D.C.: Aug. 3, 2006).
[55] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.:
Jan. 2005).
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