Federal and Contractor Employee Travel and Relocation Cost Reimbursements Differ

In response to a congressional request, GAO compared actual travel reimbursements of selected Federal contractors with current rates authorized for Federal employees to determine whether there was fair reimbursement and whether there might be opportunities to reduce travel costs incurred by contractor personnel on Government cost-reimbursement-type contracts.

Federal civilian employees and contractor personnel receive different reimbursements for their travel and relocation costs. A much greater difference occurs in the reimbursement of relocation expenses than for temporary travel expenses. Relocation allowances for both Federal employees and contractor personnel are inadequate. Forty-seven percent of the corporations responding to a GAO survey believed that Federal travel and relocation regulations have had an adverse effect on their operations. Relocation inducements are also being paid to contractor personnel, but not to Federal employees, because of divergent regulations. Travel and relocation reimbursements for Federal civilian employees are governed by Federal Travel Regulations, while reimbursements for contractors are covered by procurement regulations. GAO found that questionable corporate aircraft costs and first-class air charges are being charged to Government contracts, because procurement regulations do not require specific justification in each instance. The Federal contract airline program provides Federal travelers with the use of specified airlines at lower rates. Federal contractors with cost-reimbursable contracts who are entitled to use this program are generally not aware of this service. Department of Defense contractors allocate travel and relocation costs either as direct charges or indirect costs added as part of overhead charges. All contractors said that their travel and relocation claims were audited. Usually, these audits are conducted by independent segments of the contractors' operations.

Recommendations

Our 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: Rosslyn S. Kleeman Team: General Accounting Office: Federal Personnel and Compensation Division Phone: (202) 512-9204