DOT Signs Fee-Based Agency Deal

<B> DOT Signs Fee-Based Agency Deal</B>

By Sarah Welt

<i>Washington, D.C.</i> - In a move that follows the private sector, the Department of Transportation has become the first fee-based government account, recently signing with WorldTravel Partners of Atlanta for its Washington business.

The government agency went live with WTP on Feb. 2, having previously worked with the Arlington, Va.-based SatoTravel.

The portion of the Transportation Dept. account that WTP will service accounts for $10 million in air spend, while DOT as a whole has a total travel spend of $200 million.

According to David Klineberg, DOT's deputy chief financial officer, the contract with WTP is unique because the "only WTP income is from us and anything like air, car and lodging gets passed through us, so they are on our side of the table." Klineberg said this arrangement is unusual for the public sector.

DOT's contract also now includes a three-tiered pricing structure, with separate charges for telephone and e-mail or fax reservations, and a third, lower price--not yet operational--for self-booked electronic reservations.

Klineberg said WTP agents are incentivized when they are able to negotiate better rates.

Travel agents are given a percent of savings achieved but this "varies based on quality factors. We don't want to just do inexpensive and thrifty travel," he said. "If people are unhappy because of the quality factor, they won't get compensated for that."

Agents will be rated on criteria such as rapid service, good location, and whether the traveler understands the distance from a business destination. A series of surveys will be given to a percentage of travelers on a regular basis.

DOT's account bid also was unique because it contains a technology clause that "says we want to know if they are able to deal with a booking engine, e-mail linkages, etc., and will adapt over time. Prospectively as products get developed in the future we can keep up and take advantage of that," Klineberg said.

To ensure that the agency stays current, the contract with WTP is guaranteed for two years, with one-year renewals possible for three more years.

DOT's current travel management is a patchwork operation, and service varies region to region. But the agency bid out Washington with the idea of possibly consolidating with a single agency throughout the country. "We use GSA contracted travel agencies in the regions," Klineberg said. But whether or not WTP will get a larger portion of the business remains to be seen. "We are working on determining, when a lot of regional contracts are up," whether consolidation will be "advantageous for us. It will be a case by case decision," said Klineberg.

DOT took the tack of bidding for itself and not going through the GSA, as is standard practice. The department wanted to "try out new ideas" and the GSA "helped us do it," said Klineberg. The GSA provided technical assistance as well as consulting help.

Klineberg initiated the concept to go out for bid and try new approaches to travel. While DOT does not have preferred suppliers at present, it wants to develop its own--and leverage not only WTP but other GSA contract agencies.

The transition to WTP has been almost seamless, Klineberg said, and "Sato was very generous and helpful." DOT's first plan has been to put in a new system for booking travel. "Now we don't have lines of people waiting for travel services. We are doing it almost totally over the phone and have cleaned up the accounting and financial management stuff." The travel management company has reduced the number of transactions and eliminated the government travel request pre-approval process altogether.

Streamlining processes and reducing paper is high on the priority list for internal operations. Klineberg said, "When we are fully operational, we will be totally paperless." In the office of the secretary, the department is "nearly paperless right now."

Klineberg said that platform differences across the board have made it difficult to have anything uniform today, though automated travel systems are in use in certain parts of the agency, including a planning approval and expense reporting system tied to DOT's accounting system.

DOT does not have an automated booking system in place and does not expect to have one in this calendar year, but expects "a lot of automated sending of travel information to the agent through our systems, as well as e-mail and fax," Klineberg said. DOT hopes to use the Perdieamazing system, an online booking engine through Apollo geared to federal travel policy that DOD already uses, and Gelco's Travel Manager.

While the ink is still drying on the travel contract, DOT is planning its business travel strategy for the next couple of years. It has a lot on the drawing board. High on the list is exploring direct settlement to airlines and giving travelers a greater choice of airports.

Tim Burke, executive vice president of WTP and a partner in the organization, said, "We looked at the DOT bid and knew it required technology including development, migration, automated booking and moving account management from the government to the private sector. We thought WTP had all the tools for that.