E-Government Travel
Participation by Small Businesses and Estimated Program Savings Gao ID: GAO-06-911 September 15, 2006In November 2003, the General Services Administration (GSA) awarded three 10-year e-Government Travel Service (eTS) master contracts as part of the e-Gov Travel initiative, managed by the General Services Administration (GSA), which aims to save costs and improve service by providing a common, integrated approach to managing government travel functions. GSA has projected that e-Gov Travel will realize about $473 million in savings across the government between fiscal years 2002 and 2013. As directed by Senate Report 109-109, GAO is reporting on its study of (1) whether GSA has appropriate mechanisms in place to help ensure the use of small business travel agencies in the e-Gov Travel program and (2) the soundness of GSA's estimate of potential savings. GAO evaluated GSA's small business goals and results and assessed GSA's cost-benefit analysis based on criteria developed by the Office of Management and Budget (OMB).
GSA has appropriate mechanisms in place to ensure that small travel agencies have opportunities to obtain federal travel business (1) by participating in the eTS contracts, under which three vendors agreed to offer a full array of travel management services to federal agencies, and (2) through the Travel Services Solutions (TSS) schedule, which serves as a comprehensive contracting vehicle for federal agencies wishing to acquire related services such as professional travel agents. Specifically, GSA included provisions within the eTS contracts to promote the use of small business subcontractors, which include travel agencies as well as other small businesses. These provisions include goals for the amount of business to go to small business subcontractors and financial incentive awards for meeting or exceeding those goals, as well as monetary penalties for not meeting the goals. GSA also engaged in outreach to explain these contract provisions to agencies and the business community. In addition, it established the TSS schedule to supplement the eTS contracts and permit small businesses and others to participate. Small businesses have participated in both, and the three eTS vendors have reported meeting the contracts' goals for small business subcontracting in fiscal year 2005. However, the e-Gov Travel program office has not tracked how much business the travel agencies on the schedule have received; thus, the office has not yet gauged the overall effectiveness of the schedule for facilitating the participation of small businesses. Further, it is uncertain whether GSA intends to waive or modify its requirement that travel agencies conduct $25,000 in business each year to maintain their schedule contracts. Such a requirement could be an impediment to the participation of small travel agencies. GSA's estimate of e-Gov Travel savings across the federal government is not well supported. A large proportion (74 percent) of the projected benefits is based on GSA's calculations of expected productivity savings to be gained from streamlined processing of travel orders and vouchers. However, GSA did not determine whether individual agencies planned to take action to realize productivity savings (for example, by reallocating personnel to other tasks). It is thus unclear whether these savings will be borne out. Further, the estimate does not reflect other savings that could be gained by consolidation and the elimination of duplicative systems; GSA has stated that calculating such savings would be prohibitively expensive. As a result, it is unclear what savings can be expected from implementing e-Gov Travel. At this point, a new estimate of anticipated savings would be of limited value, but tracking actual savings would provide a useful measure of program success. Currently, however, GSA does not plan to collect data from individual agencies on actual savings.
GAO-06-911, E-Government Travel: Participation by Small Businesses and Estimated Program Savings
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Report to Congressional Committees:
September 2006:
E-Government Travel:
Participation by Small Businesses and Estimated Program Savings:
GAO-06-911:
GAO Highlights:
Highlights of GAO-06-911, a report to congressional committees
Why GAO Did This Study:
In November 2003, GSA awarded three 10-year e-Government Travel Service
(eTS) master contracts as part of the e Gov Travel initiative, managed
by the General Services Administration (GSA), which aims to save costs
and improve service by providing a common, integrated approach to
managing government travel functions. GSA has projected that e-Gov
Travel will realize about $473 million in savings across the government
between fiscal years 2002 and 2013.
As directed by Senate Report 109-109, GAO is reporting on its study of
(1) whether GSA has appropriate mechanisms in place to help ensure the
use of small business travel agencies in the e-Gov Travel program and
(2) the soundness of GSA‘s estimate of potential savings.
GAO evaluated GSA‘s small business goals and results and assessed GSA‘s
cost-benefit analysis based on criteria developed by the Office of
Management and Budget (OMB).
What GAO Found:
GSA has appropriate mechanisms in place to ensure that small travel
agencies have opportunities to obtain federal travel business (1) by
participating in the eTS contracts, under which three vendors agreed to
offer a full array of travel management services to federal agencies,
and (2) through the Travel Services Solutions (TSS) schedule, which
serves as a comprehensive contracting vehicle for federal agencies
wishing to acquire related services such as professional travel agents.
Specifically, GSA included provisions within the eTS contracts to
promote the use of small business subcontractors, which include travel
agencies as well as other small businesses. These provisions include
goals for the amount of business to go to small business subcontractors
and financial incentive awards for meeting or exceeding those goals, as
well as monetary penalties for not meeting the goals. GSA also engaged
in outreach to explain these contract provisions to agencies and the
business community. In addition, it established the TSS schedule to
supplement the eTS contracts and permit small businesses and others to
participate. Small businesses have participated in both, and the three
eTS vendors have reported meeting the contracts‘ goals for small
business subcontracting in fiscal year 2005. However, the e-Gov Travel
program office has not tracked how much business the travel agencies on
the schedule have received; thus, the office has not yet gauged the
overall effectiveness of the schedule for facilitating the
participation of small businesses. Further, it is uncertain whether GSA
intends to waive or modify its requirement that travel agencies conduct
$25,000 in business each year to maintain their schedule contracts.
Such a requirement could be an impediment to the participation of small
travel agencies.
GSA‘s estimate of e-Gov Travel savings across the federal government is
not well supported. A large proportion (74 percent) of the projected
benefits is based on GSA‘s calculations of expected productivity
savings to be gained from streamlined processing of travel orders and
vouchers. However, GSA did not determine whether individual agencies
planned to take action to realize productivity savings (for example, by
reallocating personnel to other tasks). It is thus unclear whether
these savings will be borne out. Further, the estimate does not reflect
other savings that could be gained by consolidation and the elimination
of duplicative systems; GSA has stated that calculating such savings
would be prohibitively expensive. As a result, it is unclear what
savings can be expected from implementing e-Gov Travel. At this point,
a new estimate of anticipated savings would be of limited value, but
tracking actual savings would provide a useful measure of program
success. Currently, however, GSA does not plan to collect data from
individual agencies on actual savings.
What GAO Recommends:
GAO recommends that GSA (1) ensure that its administrative processes do
not impede small business travel agencies from having reasonable
opportunities to do business with the federal government and (2)
collect data and periodically report to OMB on savings realized from
implementing e-Gov Travel. GSA generally agreed with the content and
recommendations in this report.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-911].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Linda Koontz at (202) 512-
6240 or koontzl@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Appendixes:
Appendix I: E-Government Travel: Participation by Small Businesses and
Estimated Program Savings:
Appendix II: Comments from the General Services Administration:
Abbreviations:
eTS: e-Government Travel Service:
GSA: General Services Administration:
OMB: Office of Management and Budget:
TSS: Travel Services Solution:
Letter September 15, 2006:
The Honorable Christopher Bond:
Chairman:
The Honorable Patty Murray:
Ranking Minority Member:
Subcommittee on Transportation, Treasury, the Judiciary, Housing and
Urban Development, and Related Agencies:
Committee on Appropriations:
United States Senate:
The Honorable Joe Knollenberg:
Chairman:
The Honorable John W. Olver:
Ranking Minority Member:
Subcommittee on Transportation, Treasury, the Judiciary, Housing and
Urban Development, and Related Agencies:
Committee on Appropriations:
House of Representatives:
The President has identified the expansion of electronic government (e-
government)[Footnote 1] as one of the five priorities of his management
agenda. To support this priority, the Office of Management and Budget
(OMB) developed an implementation strategy that identified 25 e-
government initiatives. One of these initiatives, e-Gov Travel, managed
by the General Services Administration (GSA), is intended to provide a
common, automated, and integrated approach to managing government
travel functions that will both realize cost savings and improve
service. In November 2003, GSA awarded three 10-year e-Government
Travel Service (eTS) master contracts, under which three vendors agreed
to offer a full array of travel management services to federal
agencies. Small travel agencies can also offer services, as
subcontractors to eTS vendors or directly to federal agencies. GSA has
projected that e-Gov Travel will realize about $473 million in savings
across the federal government between fiscal years 2002 and 2013.
Senate Report 109-109 directed us to study the use of small businesses
in the e-Gov Travel program, with a focus on travel agencies offering
services to federal agencies through GSA's Travel Services Solutions
(TSS) schedule. The report also directed us to assess the program's
anticipated savings. Our specific objectives were to determine (1) if
GSA had appropriate mechanisms in place to help ensure the use of small
business travel agencies, including travel agencies on the TSS
schedule, and (2) the soundness of GSA's estimate of potential savings
expected to accrue to the federal government from moving to eTS.
To determine whether GSA had appropriate mechanisms in place to help
ensure the use of small business travel agencies, we:
* analyzed GSA's small business goals and compared them with eTS
vendors' small business plans and their reported subcontracting with
small businesses for the second half of fiscal year 2005;
* analyzed documentation of the e-Gov Travel program and interviewed
officials at GSA regarding efforts to ensure that small business travel
agencies have the opportunity to participate;
* interviewed officials at agencies that had begun implementing eTS
systems (the National Science Foundation and the Departments of
Agriculture, Transportation, and the Treasury) to assess how their
planned use of small business travel agencies made use of GSA's
mechanisms; and:
* interviewed 11 representatives of small business travel agencies to
obtain their views regarding GSA's efforts and the eTS program. To
select these travel agencies, we consulted with GSA and the Society of
Government Travel Professionals[Footnote 2] to identify travel agencies
in a variety of contracting relationships with the federal government,
including those that are currently subcontracting under the eTS program
(3 agencies), those currently listed on the TSS schedule (10 agencies,
including 3 that also have eTS subcontracts), and 1 travel agency that
is not currently involved in either eTS or TSS but is interested in
doing business with the government. The TSS schedule travel agencies
included those holding active task orders with federal agencies (4
agencies) as well as those without task orders (6 agencies).
To assess the reliability of vendors' reported subcontracting with
small businesses, we interviewed officials from each of the vendors and
assessed documentation regarding independent reviews and other quality
control processes they had in place.
To determine the soundness of GSA's estimate of the potential savings
from the eTS program, we evaluated GSA's cost-benefit analysis against
selected criteria in OMB Circular A-94 pertaining to savings estimation
and discussed the rationale for the estimate with program officials.
Our work was conducted from January 2006 through May 2006, in
accordance with generally accepted government auditing standards.
On June 12, 2006, we provided a briefing to staff from your offices on
the results of our work. The briefing slides are included in appendix
I. The purpose of this report is to publish the briefing slides and
transmit the recommendations to GSA.
Results in Brief:
GSA has appropriate mechanisms in place to ensure that small travel
agencies have opportunities to obtain federal travel business through
participation in the eTS contracts and the TSS schedule. Specifically,
GSA included provisions within the eTS contracts to (1) promote small
business use and engaged in outreach to explain them and (2)
established the TSS schedule to supplement eTS and permit small
businesses and others to participate. Small businesses have
participated in both eTS and TSS, and vendors have reported meeting eTS
subcontracting goals for small business in fiscal year 2005. However,
the e-Gov Travel program office has not tracked the amount of business
TSS schedule travel agencies have received and thus has not yet gauged
the overall effectiveness of the schedule as a means of facilitating
small business participation. Further, it is uncertain whether GSA
intends to waive or modify its requirement that travel agencies conduct
$25,000 in business each year to maintain their TSS schedule contracts.
In light of the limited implementation status of the e-Gov Travel
program, such a requirement could be an impediment to small travel
agency participation.
GSA's estimate of e-Gov Travel savings across the federal government is
not well supported. Much (74 percent) of the benefits projected for
fiscal years 2002 through 2013 is based on GSA's calculations of
expected productivity savings associated with streamlined processing of
travel orders and vouchers. GSA did not determine whether individual
agencies planned to take action to implement these savings (such as by
reallocating affected personnel resources to other tasks), and thus it
is unclear whether these savings are likely to be realized. Further,
the estimate does not reflect additional savings potentially gained by
consolidating the government's acquisition of travel services and
eliminating duplicative systems, which GSA states would be
prohibitively expensive to calculate. As a result, the extent of
savings to be expected from implementing the e-Gov Travel program is
unclear. While a new estimate of anticipated savings would be of
limited value, tracking actual savings realized would provide a useful
measure of program success. However, GSA does not plan to collect data
from individual agencies on the extent of actual savings resulting from
the program.
We are recommending that GSA take the following two actions: (1) ensure
that its administrative processes do not impede small business travel
agencies from having reasonable opportunities to obtain and maintain
business with the federal government and (2) collect data from
individual agencies on savings realized as they implement e-Gov Travel
and report periodically to OMB.
We received written comments on a draft of this report from the
Administrator of GSA. This letter is reprinted in appendix II. GSA
generally agreed with the content of our report and our
recommendations.
We are sending copies of this report to the Administrator of GSA and
other interested congressional parties. We also will make copies
available to others upon request. In addition, the report will be
available at no charge on the GAO Web site at [Hyperlink,
http://www.gao.gov.]
If you have questions concerning this report, please call me at (202)
512-6240 or send e-mail to koontzl@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. Major contributors to this report are
Barbara Collier, John de Ferrari, Neil Doherty, Vernetta Marquis, and
Elizabeth Zhao.
Signed by:
Linda D. Koontz:
Director, Information Management Issues:
[End of Section]
Appendix I: E-Government Travel: Participation by Small Businesses and
Estimated Program Savings:
E-Government Travel:
Participation by Small Businesses and Estimated Program Savings:
Briefing for congressional staff of the:
Subcommittee on Transportation, Treasury, the Judiciary, Housing and
Urban Development and Related Agencies, Senate Committee on
Appropriations; and:
Subcommittee on Transportation, Treasury, Housing and Urban
Development, The Judiciary, and the District of Columbia, House
Committee on Appropriations:
May 30, 2006:
Contents:
Introduction:
Objectives:
Scope and Methodology:
Results in Brief:
Background:
GSA Has Established Mechanisms to Allow Participation by Small Business
Travel Agencies:
Anticipated Savings are Unclear:
Conclusions:
Recommendations:
Agency Comments:
Introduction:
E-Gov Travel is a program to establish automated e-Government Travel
Service (eTS) systems for managing travel functions at civilian
agencies across the federal government. Managed by the General Services
Administration (GSA), the e-Gov Travel program is one of 25 e-
government initiatives sponsored by the Office of Management and Budget
(OMB) in response to the President's Management Agenda. The Agenda
gives priority to expanding electronic government and improving the
internal efficiency of the federal government.
The purpose of the e-Gov Travel initiative is to provide a common,
automated, and integrated approach to managing government travel
functions that will both realize cost savings and improve service. GSA
has projected that e-Gov Travel will realize about $473 million in
savings across the federal government between fiscal years 2002 and
2013.
In November 2003, GSA awarded three 10-year eTS master contracts to:
Carlson Wagonlit Government Travel,
Electronic Data Systems (EDS), and
Northrop Grumman Mission Systems.
Under these contracts, the eTS vendors agree to offer a full array of
travel management services to government agencies. Executive branch
agencies other than the Department of Defense (which is implementing a
separate system) are required to use eTS vendors to support most of
their travel management functions such as travel authorization and
voucher processing but are not required to obtain travel agency
services assistance in booking or making changes in travel from eTS
vendors. Travel agency services are part of the eTS vendor offerings,
but federal agencies may obtain them separately.
Small business travel agencies[Footnote 3] have two main avenues for
obtaining business with federal agencies, using GSA contract vehicles:
They can form partnerships with one or more of the eTS vendors and
provide travel agency services as eTS subcontractors. Public Law 109-
115 stipulates that at least 23 percent of all subcontracted dollars
for eTS are to be allocated to small businesses (which encompasses all
small businesses, not just travel agencies).
They can apply for and be listed on GSA's Travel Services Solutions
(TSS) schedule. Federal agencies have the option of establishing
contract task orders for travel agency services from TSS-listed
businesses apart from their main eTS contract task orders.
Federal agencies are also free to independently negotiate contracts
with travel agencies, including small travel agencies. However,
according to GSA, they are likely to do so only rarely because the
administrative burden of negotiating independent contracts is much
greater than when using one of GSA's established contracting vehicles.
Objectives:
Senate Report 109-109 directs us to study the use of small businesses
in the e-Gov Travel program, with a focus on travel agencies on the TSS
schedule. The report also directs us to assess expected savings of the
program.
Our specific objectives were to:
determine if GSA has appropriate mechanisms in place to help ensure the
use of small business travel agencies, including travel agencies on
GSA's TSS schedule, and:
determine the soundness of GSA's estimate of potential savings expected
to accrue to the federal government from moving to eTS.
Scope and Methodology:
To determine whether GSA has appropriate mechanisms in place to help
ensure the use of small business travel agencies, we:
analyzed GSA's small business goals and compared them with eTS vendors'
small business plans and their reported subcontracting with small
businesses for the second half of fiscal year 2005;
analyzed documentation of the e-Gov Travel program and interviewed
officials at GSA regarding efforts to ensure that small business travel
agencies have the opportunity to participate;
interviewed officials at agencies that have begun implementing eTS
systems (the National Science Foundation and the Departments of
Agriculture, Transportation, and the Treasury) to assess how their
planned use of small business travel agencies made use of GSA's
mechanisms; and:
interviewed 11 representatives of small business travel agencies to
obtain their views regarding GSA's efforts and the eTS program. To
select these travel agencies, we consulted with GSA and the Society of
Government Travel Professionals[Footnote 4] to identify travel agencies
in a variety of contracting relationships with the federal government,
including those that are currently subcontracting under the eTS program
(3), those currently listed on the TSS schedule (10, including the 3
that also have eTS subcontracts), and one travel agency that is not
currently involved in either eTS or TSS but is interested in doing
business with the government. The TSS schedule travel agencies included
those holding active task orders with federal agencies (4) as well as
those without task orders (6).
To assess the reliability of vendors' reported subcontracting with
small businesses for the second half of fiscal year 2005, we
interviewed officials from each of the vendors and obtained
documentation on independent reviews and other quality control
processes they had in place.
To determine the soundness of GSA's estimate of the potential savings
from the eTS program, we evaluated GSA's cost-benefit analysis against
selected criteria in OMB Circular A-94 pertaining to savings estimation
and discussed the rationale for the estimate with program officials.
We performed our work from January 2006 to May 2006, in accordance with
generally accepted government auditing standards.
Results in Brief:
GSA has appropriate mechanisms in place to ensure that small travel
agencies have opportunities to obtain federal travel business through
participation in the eTS contracts and the TSS schedule. Specifically,
GSA:
included provisions within the eTS contracts to promote small business
use and engaged in outreach to explain them, and:
established the TSS schedule to supplement eTS and permit small
businesses and others to participate.
Small businesses have participated in both eTS and TSS, and vendors
reported meeting eTS subcontracting goals for small business in fiscal
year 2005. However, the e-Gov travel program office has not tracked the
amount of business TSS schedule travel agencies are receiving and thus
has not yet gauged the overall effectiveness of the schedule as a means
of facilitating small business participation. Further, it is uncertain
whether GSA intends to waive or modify its requirement that travel
agencies conduct $25,000 in business each year to maintain their TSS
schedule contract. In light of the limited implementation status of the
e-Gov Travel program, such a requirement could be an impediment to
small travel agency participation.
GSA's estimate of e-Gov Travel savings across the federal government is
not well supported. Much (74 percent) of the benefits projected for
fiscal years 2002 through 2013 is based on GSA's calculations of
expected productivity savings associated with streamlined processing of
travel orders and vouchers. GSA did not determine whether individual
agencies planned to take action to implement these savings (such as by
reallocating affected personnel resources to other tasks), and thus it
is unclear whether these savings are likely to be realized. Further,
the estimate does not reflect additional savings potentially gained by
consolidating the government's acquisition of travel services and
eliminating duplicative systems, which GSA states would be
prohibitively expensive to calculate. As a result, the extent of
savings to be expected from implementing the e-Gov Travel program is
unclear. While a new estimate of anticipated savings would be of
limited value, tracking actual savings realized would provide a useful
measure of program success. However, GSA does not plan to collect data
from individual agencies on the extent of actual savings resulting from
the program.
We are recommending that GSA take steps to ensure that its
administrative processes do not impede small business travel agencies
from having reasonable opportunities to obtain and maintain business
with the federal government. We are also recommending that GSA collect
data from individual agencies on savings realized as they implement e-
Gov Travel and report periodically to the Office of Management and
Budget.
In providing oral comments on a draft of this briefing, the e-Gov
Travel program manager and other officials from GSA generally agreed
with the content and recommendations. The GSA officials also made a
number of technical comments, which we incorporated as appropriate.
Background:
In the past, federal travel operations were largely decentralized. In
many cases, travel agencies, including small businesses, were able to
contract directly with agency subcomponents, such as field offices, to
provide travel services in diverse geographic locations. According to
GSA, the decentralized nature of travel operations created a labor-
intensive administrative structure, and it was not possible to
effectively monitor travel operations governmentwide. E-Gov Travel was
launched to address administrative inefficiencies, realize cost
savings, and enhance service by consolidating the travel functions of
federal civilian agencies.[Footnote 5]
Under e-Gov Travel, executive branch agencies other than Defense are
required to choose among the three vendors who were awarded the master
eTS contracts. These vendors all offer travel agency services. However,
as already discussed, federal agencies have the alternative of
obtaining travel agency services through the TSS schedule or by
contracting independently with travel agencies.
Federal agencies were required to choose eTS vendors by December 2004;
however, most agencies have not yet implemented eTS. Of 24 major
departments and agencies, two (the National Science Foundation and the
National Archives and Records Administration) had fully implemented eTS
as of April 2006. Another 8 agencies were in the process of
implementing the system.
Background: eTS Components:
The systems that the eTS vendors provide to federal agencies consist of
three major components:
The Travel Authorization and Voucher System is an automated tool used
to ensure that planned travel adheres to regulations and is properly
authorized. It also allows employees to submit vouchers and be
reimbursed for travel expenses.
The Online Booking Engine is the interface used by agencies to make
travel reservations. It allows federal travelers 24-hour access to
reservations, itineraries, and pre-selected traveling preferences.
A Travel Management Center (travel agency) provides traditional human-
assisted travel services, including assistance in booking reservations,
making changes, or coping with unforeseen problems as travel is under
way. Agencies may use more than one travel agency.
Each of these three components interacts with the others. These
interactions may differ depending on the implementation of each
agency's system. For example, a government employee may use the online
booking engine to book travel directly or may consult with a travel
agent (Travel Management Center) to do so. Authorization may be
obtained through the Travel Authorization and Voucher System.
To authorize travel, the Travel Authorization and Voucher System must
have access to the reservation information collected by the online
booking engine or the travel agency. Usually this exchange is handled
electronically through a Global Distribution System (GDS) -a large
electronic travel reservation system that facilitates sharing of travel
and transportation information among multiple subscribing
organizations. GDSs provide subscribers with schedules, availability,
and pricing information, as well as reservation and ticketing
capabilities. There are four major GDSs: Amadeus, Worldspan, Sabre, and
Galileo.
The following diagram illustrates how the eTS components interact.
e-Gov Travel Service Interactions:
[See PDF for image]
Source: Adapted from GSA.
[End of figure]
Background:
Travel agencies affiliated with the main eTS contracts are referred to
as embedded. As such, the travel agencies are subcontractors to the
main eTS vendors, and they have procedures for sharing information with
the Travel Authorization and Voucher System and online booking engine,
generally via a GDS, as established in their contracts with the eTS
vendors. Embedded travel agencies include large as well as small
businesses.
If travel agencies are not embedded such as when federal agencies have
separate task orders with travel agencies on the TSS schedule the eTS
vendors are required to accommodate the chosen travel agency: that is,
establish procedures for efficiently sharing information with them. For
an eTS vendor to properly complete a travel order and authorization, it
must obtain travel reservation information created by the travel
agency, which is generally done via a GDS. The GSA contract requires
eTS vendors to subscribe to all four GDSs; this is intended to ensure
that most travel agencies, which may subscribe to different GDSs, can
be accommodated.
Background: Travel Services Solutions Schedule:
The TSS schedule, which is managed by GSA's Federal Supply Service,
allows federal agencies to supplement their eTS contracts. Agencies may
use the TSS schedule to acquire travel services such as professional
travel agents and related services to assist federal employees in
meeting their travel needs. According to GSA, the TSS schedule is a
comprehensive contracting vehicle that provides a listing of approved
contractors offering these services; it is intended to provide agencies
with one-stop shopping for travel management needs and ensure
integration with eTS.
The TSS schedule is designed to provide opportunities for all
businesses to compete for federal travel business, with an emphasis on
promoting opportunities for small businesses. GSA provides information
to agencies about whether TSS vendors are small businesses, and
agencies can use these vendors to address their small business
utilization goals.
Objective 1: GSA Has Established Mechanisms to Allow Participation by
Small Business Travel Agencies:
GSA has appropriate measures in place to ensure that small business
travel agencies have opportunities to obtain federal travel business
through participation in (1) the eTS contracts and (2) the TSS
schedule. Through both of these vehicles, small business travel
agencies have received federal business.
In addition, more small businesses are now eligible for federal
business through GSA than before eTS and TSS. Under GSA's previous
master contract for travel agencies, in effect from 1998 through 2004,
13 small travel agencies participated. In contrast, 34 are currently
participating through eTS, TSS, or both.
Use of Small Business Travel Agencies:
eTS contracts: In developing the eTS program, GSA established
provisions in the master contracts to promote the use of small
businesses. For example, eTS vendors are required to develop and submit
plans outlining their strategies for reaching small business
participation goals. GSA set a goal for each eTS vendor to allocate 40
percent of subcontracting dollars to small businesses. In addition,
legislation requiring eTS vendors to allocate at least 23 percent of
subcontracting dollars to small businesses is in effect. The contracts
provide incentive awards for meeting or exceeding GSA's small business
goals and also stipulate that vendors face monetary penalties if they
do not meet their small business goals. In addition, the contracts
require vendors to report semi-annually on their small business usage.
In addition, to broaden awareness about eTS, GSA has engaged in
outreach about the program by various means, including forums and
workshops. For example, GSA has made presentations to workshops and
conferences sponsored by the Society of Government Travel Professionals
and the National Travel Forum, among others. Topics discussed in these
forums included how the system works as a whole, migration plans,
procurement, pricing, and ways in which GSA is supporting the
transition to the eTS system. GSA officials have also provided customer
representatives to work with agency officials on selecting eTS vendors
and travel agencies. These activities included providing information
about opportunities for federal agency utilization of small travel
agencies.
The eTS program has succeeded in achieving small business
participation: in their October 2005 semi-annual reports to GSA, the
eTS vendors provided figures on subcontracted dollars to small
businesses that met GSA's goal of 40 percent (and thus also the
statutory goal of at least 23 percent).[Footnote 6] GSA officials
reported that the eTS master contracts currently include 11 small
business travel agencies as subcontractors.
Small business subcontracting goals are not targeted specifically to
travel agencies. According to their July 2005 reports, one vendor
directed 13 percent of small business subcontracting dollars to small
travel agencies, while another devoted 9 percent to small travel
agencies.[Footnote 7]
TSS schedule: In 2003, GSA established the TSS schedule to provide
opportunities for businesses (including small businesses) that are not
eTS subcontractors to provide travel services to federal agencies.
According to e-Gov Travel officials, GSA's Federal Supply Service has
conducted outreach efforts regarding opportunities under the TSS
schedule similar to those conducted for eTS.
GSA has obtained small business participation on the TSS schedule:
Currently, the TSS schedule includes 53 travel agencies, of which 30
are small businesses.
However, it is not clear how much business small travel agencies are
actually receiving through the TSS schedule and thus whether the TSS,
as currently administered, is an effective mechanism for providing
opportunities for small travel agencies. As of April 2006, GSA
officials reported that 9 of the 30 small travel agencies had task
orders with federal agencies. However, e-Gov Travel program officials
do not maintain information about agency usage of TSS schedule vendors
and thus could not report how much business small travel agencies were
receiving through TSS schedule task orders.
Without such information, GSA officials lack the ability to monitor
over time whether small businesses are being afforded opportunities
under the TSS schedule and whether administrative adjustments need to
be made such as changes in contract requirements or providing better
explanations of small business opportunities to federal agencies.
In addition, small travel agency representatives were concerned that
they could face an onerous administrative process with GSA if they wish
to remain listed on the TSS schedule in the future. According to these
representatives, to initially become listed on the TSS schedule
required a substantial initial investment without any guarantee of
federal business.
Eight out of the 11 travel agencies we contacted indicated that the
approval process was time-consuming and the requirements difficult to
understand. Three small travel agencies stated that they needed to hire
specialists or had to devote an extensive amount of time to develop
draft TSS contracts. Four indicated that additional resources were
required in an iterative process of negotiation to win approval from
GSA. Six mentioned that considerable time was required to get answers
to questions and feedback.
Travel agency representatives stated they were concerned that they
would be dropped from the TSS schedule if they did not conduct enough
business and then would have to repeat the application process in order
to regain the opportunity to obtain federal business. GSA requires
vendors to conduct $25,000 worth of business each year to maintain
their TSS schedule contract.
While GSA officials acknowledged this requirement, they said travel
agencies not receiving task orders would not necessarily be dropped
from the TSS schedule. According to GSA, the decision to cancel a
contract is a business decision, and before making such a decision, GSA
officials are to meet with the vendor to discuss why it is not doing
business and make recommendations. According to GSA, no TSS travel
agency to date has been canceled due to lack of business.
Given that e-Gov Travel has been implemented at only a few agencies,
the $25,000 minimum requirement for small travel agencies could create
an impediment to small business participation. GSA has not indicated
whether it intends to waive or modify this requirement in light of the
limited implementation status of the e-Gov Travel program.
Objective 2: Anticipated Savings are Unclear:
According to GSA's cost and benefit estimate, eTS is projected to
result in about $473 million in overall savings across the federal
government during fiscal years 2002 and 2013.
GSA projected benefits of:
$420 million in productivity gains from employees and supervisors
spending less time on administrative paperwork as a result of
integrating travel systems (the online booking engine and the travel
authorization and voucher system) with agency finance and accounting
systems and:
$148 million in savings from more efficient transactions and
vouchering.
These benefits together total $568 million. GSA projected the total
cost of developing and implementing the system at $95 million.
Subtracting this cost from the projected benefits results in $473
million in projected savings.
GSA did not provide evidence that the bulk of the projected cost
savings ($420 million) which consist of anticipated productivity gains
due to employees and supervisors spending less time processing travel
authorizations and vouchers are likely to be realized. Unlike budgetary
savings, which can be realized by not making otherwise planned
expenditures, productivity gains are based on anticipated reductions in
the need for personnel resources, which could allow individuals to be
reassigned or to perform other tasks.
In order for these savings to materialize, agencies must have plans in
place to reallocate these personnel resources or otherwise take
advantage of the anticipated gains. However, in the case of e-Gov
Travel, GSA analysts calculated the productivity savings that they
believed should be realized at each government agency due to reduced
manual effort in processing travel orders and vouchers without
determining whether the federal agencies would take action to achieve
cost reductions, such as by reallocating or reducing personnel
resources.
According to GSA, the projected savings represent an aggregation of the
many relatively small amounts of time to be saved by individual
travelers, their supervisors, and financial management personnel at
each federal agency.
Because the projected savings are scattered among many agency
personnel, it may be difficult for agencies to explicitly achieve cost
reductions corresponding to the projected savings, such as by
reallocating or reducing personnel resources. Thus it is unclear the
extent to which these savings will be realized.
In addition, the GSA estimate may not take into account all possible
sources of cost savings. OMB's A-94 guidance requires a complete and
reasonable accounting of expected benefits. Although one of the goals
for eTS is consolidation of government travel management services and
elimination of duplicative systems, GSA's cost-benefit estimate focused
on efficiency gains in travel execution (fees paid to service
providers) and travel management (booking, reviewing, and approving
travel and travel reimbursement), rather than savings resulting from
consolidating the acquisition of travel services or eliminating
duplicative systems. Implementation of e-Gov Travel could result in
additional savings in these areas.
GSA officials recognized that they had not quantified these potential
savings. They stated that it would be prohibitively expensive to do so
and was not necessary because the previously described savings had been
identified.
Because the decision to implement e-Gov Travel has already been made,
it may not be productive to reassess anticipated savings at this point
in time. However, tracking actual savings could shed light on the
success of the program and inform future initiatives of a similar
nature. Further, GSA is required to conduct post-implementation
reviews[Footnote 6] of information technology investments to verify,
for example, estimated benefits and document effective management
practices for broader use. Information on savings realized is necessary
for these reviews. However, GSA program staff indicated that they have
no plans to collect data from individual agencies on savings realized.
Conclusions:
GSA has established appropriate mechanisms to allow small business
travel agencies to compete for business with federal customers,
including setting goals for small business utilization in the eTS
contracts and establishing the TSS schedule. Although these processes
create a structure for small travel agency business opportunities, and
eTS small business goals are reportedly being met, the e-Gov Travel
program is still in its early stages of implementation. Specifically,
it remains unclear how much business small travel agencies are doing
with the government via the TSS schedule. Without monitoring usage, e-
Gov Travel program officials are unable to determine the extent to
which the TSS schedule has provided business opportunities to small
travel agencies. Further, in light of the limited implementation status
of the e-Gov Travel program, it is uncertain whether GSA intends to
enforce the requirement that travel agencies conduct $25,000 in
business each year to maintain their TSS schedule contract. Such a
requirement could be an impediment to small travel agency
participation.
The eTS savings estimate prepared by GSA is based largely on
productivity gains that may not be realized at individual agencies, and
the estimate does not address potential gains due to consolidation and
elimination of duplication. As a result, it is difficult to know what
cost savings are expected from implementation of eTS. While a new
estimate of anticipated savings would be of limited value at this point
in time, identification of actual savings realized would provide a
useful measure of the success of the program. However, GSA does not
currently have plans to collect these data from individual agencies.
Recommendations:
We recommend that the Administrator of General Services ensure that, as
the e-Gov Travel Program progresses, GSA's administrative processes do
not impede small business travel agencies from having reasonable
opportunities to obtain and maintain business with the federal
government. Specifically, GSA should:
monitor the amount of business small travel agencies are receiving
under the TSS schedule and, depending on the results, identify and
implement adjustments as warranted, and:
consider waiving or modifying the requirement that vendors conduct
$25,000 worth of business each year to maintain their TSS schedule
contracts until the e-Gov Travel program is more broadly implemented
across the federal government.
We also recommend that the Administrator of General Services collect
data from individual agencies on savings realized as they implement e-
Gov Travel and report to the Office of Management and Budget
periodically on the extent of actual savings resulting from the
program.
Agency Comments:
On May 23, 2006, the e-Gov Travel program manager and other GSA staff,
including the Acting Assistant Commissioner for Transportation and
Property Management, provided oral comments on a draft of this
briefing. The GSA officials generally agreed with the content and
recommendations, noting that they are in the process of a
reorganization that will consolidate travel management within one
office to facilitate monitoring and tracking of small business travel
agencies. The GSA officials also made a number of technical comments,
which we incorporated as appropriate.
[End of section]
Appendix II: Comments from the General Services Administration:
GSA Administrator:
September 5, 2006:
The Honorable David M. Walker:
Comptroller General of the United States:
Government Accountability Office:
Washington, DC 20548:
Dear Mr. Walker:
Thank you for the opportunity to comment on the Government
Accountability Office (GAO) draft report, "E-Government Travel:
Participation by Small Business and Estimated Program Savings" (GAO-06-
911).
The U, S. General Services Administration (GSA) was pleased with the
collaborative manner in which GAO coordinated with GSA on this report.
Your recommendations that GSA ensure administrative processes do not
impede small business and that data on savings realized by individual
agencies be collected are beneficial and reasonable.
Through our collective efforts, the report has accurately documented
the implications of the E-Gov Travel Service (ETS) on small business
and especially the small business travel agencies. GSA has, and will
continue to ensure small business is adequately represented in our
travel services contracts. We will review our internal processes for
monitoring small business participation.
Concerning the potential savings associated with ETS, as was
highlighted in a 1996 GAO Testimony before the Senate Subcommittee on
Governmental Affairs (Governmentwide Travel Management: Federal
Agencies Have Opportunities Streamlining and Improving Their Travel
Practices, GAO/T AIMD-96-60, dated March 8, 1996), GSA plays a pivotal
role in the realization of the direct cost savings for Federal travel
through the management of the E-Gov Travel Service, GSA's City Pair
Program, the Travel Services Solutions schedule, and the FedRooms
lodging program. Over the past decade, GSA has provided the channels
for Federal agencies to obtain travel services at greatly reduced
prices resulting in a direct reduction in agency travel costs. The
Return on Investment (ROI) for direct budgeted dollars is being
realized and meets the threshold of the OMB A-94 guidance.
This same report addressed the challenge of identifying and reducing
the often hidden administrative costs associated with arranging and
processing travel. These administrative costs are estimated to be in
the hundreds of millions of dollars as was documented by both the 1996
GAO report and the E-Gov Travel business case.
The E-Gov Travel initiative is achieving the travel best practices
identified by GAO in the above mentioned 1996 report and the
Quicksilver Report (E-Government Strategy: Implementing the President's
Management Agenda for E-Government, dated February 27, 2002) through
consolidation, simplification, automation and integration of Federal
travel services, ETS has exceeded the expectations identified 10 years
ago and now provides the means for agencies to achieve greater
productivity savings, ETS establishes a cost-effective travel
management services framework that will enable Federal agencies to
greatly streamline their internal processes and focus on core mission.
Productivity savings were clearly identified by both the GAO and
Quicksilver reports as a significant benefit.
In an August 8 memorandum, Karen Evans, Administrator of the Office of
Management and Budget (OMB), Office of E-Government and Information
Technology, instructed agency Chief Information Officers to document
the savings associated with the E-Government initiatives, The E-Gov
Travel Program Management Office will work closely with OMB and
customer agencies to document agency savings associated with E-Gov
Travel where the costs to do so are reasonable.
Additionally, ETS provides benefits that are less apparent such as
automatic policy compliance, quicker reimbursement and reduced contract
administration overhead, The net effects of such intrinsic benefits
include: less abuse of premium class travel, quicker cancellation of
unused tickets, and rebates for quicker payment of Government charge
card bills to name a few. While difficult to quantify, these types of
benefits support the internal efficiency and effectiveness of the
President's Management Agenda.
If you require additional information, please contact me or have a
member of your staff contact Mr. Kevin Messner, Associate
Administrator, Office of Congressional and Intergovernmental Affairs,
at (202) 501-0563.
Cordially,
Signed by:
Lurita Doan:
Administrator:
cc:
Ms. Linda D, Koontz:
Director:
Information Management Issues:
United States Government Accountability Office:
Washington, DC 20548:
[End of Section]
(310773):
FOOTNOTES
[1] E-government refers to the use of technology, particularly Web-
based Internet applications, to enhance the access to and delivery of
government information and services to citizens, business partners,
employees, other agencies, and other entities.
[2] The Society of Government Travel Professionals is a national trade
association representing companies providing government travel
services.
[3] Small business travel agencies are defined by the Small Business
Administration as earning no more than $3.5 million annually. They also
must meet certain other criteria, such as being organized for profit,
having a place of business in the United States, and making a
significant contribution to the U.S. economy by paying taxes or using
American products, materials, or labor.
[4] The Society of Government Travel Professionals is a national trade
association representing companies providing government travel
services.
[5] Federal government travel consolidation has been a goal for many
years, See, for example, GAO, Governmentwide Travel Management. Federal
Agencies Have Opportunities for Streamlining and Improving Their Travel
Practices, GAO/T-AIMD-96-60 (Washington, D.C.: Mar. 8, 1996).
[6] GSA officials stated that the figures reported by the eTS vendors
were sensitive information that could not be publicly released.
[7] The third vendor did not provide a breakdown by type of small
business because it was not contractually required to do so. GSA
officials said they are in the process of making such reporting a
mandatory requirement.
[8] Post-implementation reviews are required under OMB Circular No. A-
130: Management of Federal Information Resources.
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