The U.S. government's massive end-to-end travel initiative, which the General Services Administration has begun to roll out, would be stopped dead in its tracks if the Senate adopts legislation similar to a House funding bill passed last month. Offered by Rep. Nydia Velazquez (D-N.Y.), ranking Democrat on the House Small Business Committee, and aimed at protecting the interests of small travel agencies, an amendment to the House Transportation, Treasury and Independent Agencies funding bill for fiscal year 2006 would prohibit funds made available in the legislation from being used by GSA to carry out its ETravel Service program, currently operating through three designated primary contractors: Carlson Wagonlit Government Travel, Northrop Grumman Mission Systems and Electronic Data Systems.
"This amendment offers more flexibility and value for the taxpayer's dollar, in addition to ensuring that the travel industry has the most efficient options available. In the end, it would return the GSA system to a more balanced approach so both large and small travel agents could bid on federal contracts—allowing federal agencies to take advantage of the exceptional quality and prices offered by small businesses for the best value of the taxpayer's dollar," Rep. Velazquez said. "Oftentimes, small businesses offer the best services at lower prices and this ensures that these options are available to the federal government."
One of President Bush's 24 EGovernment initiatives aimed at streamlining federal work processes and reducing government spend, ETravel services, or ETS, would replace 250 disparate booking practices, cut travel management costs by more than 50 percent during the next 10 years and bring online booking adoption to 70 percent, according to GSA
(BTN, Sept. 20, 2004). Last year, GSA estimated that transactional costs, which currently average $52 for each reservation, would dip to $30 per reservation.
According to GSA, its three ETS contractors will provide Web-based travel management services for the federal government over the next 10 years. "Each vendor's portion of the $450 million allocated for ETS over 10 years will depend on its success at competing for agency business," GSA noted in published materials.
By September 2004, at the time of GSA's last program update, six agencies were deploying GSA's end-to-end solution—a suite of online booking and expense management products provided by one of GSA's three primary ETravel providers. At that time, GSA was planning full, agencywide deployment by September 2006. GSA would not offer any information on the status of ETS deployment, provide updated results or comment on pending legislation.
"We're in the process of full deployment of the system with the agencies that we've been awarded," said Scott Guerrero, chief operating officer of CW Government Travel. "We've had great success at the Department of the Interior, with adoption of over 62 percent within the first 30 days." CWGT rolled out the ETS program at the Department of the Interior in March, at the Department of Labor in June, and has several other agency rollouts underway, said Guerrero. "This program represents tremendous cost savings for the federal agencies. One of the federal agencies we're working with is looking at a 50 percent reduction in costs."
Senate adoption of the bill would be a huge blow to the program and the potential it holds for cutting government spending, said Guerrero. Further, he said, "the legislation was proposed based on misinformation." Guerrero said that, while federal agencies must contract with one of the three selected vendors for end-to-end technology, all were given the opportunity to select their own travel agencies on the transaction-processing and fulfillment side.
"A key point as it relates to this issue is that the decision as to which agency to use goes to the federal agency, not the ETS vendor," Guerrero said. "For instance, when GSA was selecting its agency, they decided they wanted to use Adventure Travel in Alabama for their fulfillment and not go with their ETS vendor, which is Carlson."
Proponents of the legislation, such as Chris Mize McMillan, CEO of Jackson, Miss.-based Bonner Travel and board member of the Society of Government Travel Professionals, asserted that while GSA allowed federal agencies a window in which to make agency—or subcontractor—selections from a list of government-certified suppliers that included small and large businesses alike, GSA did not effectively communicate the terms of the selection process.
"GSA failed to educate these federal agencies on their choices. They could have chosen to stay with a small travel agency, but GSA didn't get it across to the federal agencies or to us either. It was such a new program and new format and GSA fast-tracked it," McMillan said. "It's like this train is coming down this track really fast and we're just getting run over. GSA is fast-tracking everything."
Though McMillan acknowledged the benefits of moving to an end-to-end travel program, calling the idea of ETS "brilliant," she noted that without government-approved "set-aside" contracts for small businesses, as had been present in previous government travel programs, small agencies are forced to bid not only against each other, but also against the nation's mega agencies.
"Within this huge end-to-end program, the end-to-end providers still have to have a travel agency in there to make the whole travel program work. They, of course, contracted with the big guys. Carlson selected Carlson affiliates, Northrop Grumman selected Amex. They were called embedded travel agents," said McMillan. "All this was going along swimmingly, everyone has all these mandates and they had to pick a vendor by a certain date and have it up and running by 2006. If you went out and surveyed the federal agencies, when they initially signed on the dotted line, they didn't have any idea what they were signing."
Though the program allows small agencies to subcontract through the three ETS end-to-end providers, small-business owners advocating the amendment claim that subcontracting requires them to report all business through the contractor and claim only a very small percentage of the money generated. "We have to generate $25,000 annually in gross sales, with a two-year grace period, or else we get kicked off the government schedule," said McMillan.
Patricia Stout, co-chair of the committee for small business for SGTP and president and CEO of San Antonio-based Alamo Travel Group, said that prior to ETS implementation, her agency was doing $8 million a year in business with GSA. "Now, I'm doing $300,000 when all is said is done. If this continues, I'm going to have to lay off people and my company is going to be really strapped for staff," she said. "This program will close the doors to opportunity for 10 years if it doesn't change. We need for GSA to listen to us, and they haven't. We have worked for them for over 10 years, and now it's like we're being dismissed with nothing. We're seeing the end of the tunnel with no light."
Stout contacted Velazquez and worked to get support for the legislation.
"After seeing that every month we were losing one account after another and having our customers ask what we could do so they could stay with us, I kept going after a member of the GSA's ETS program, and he said to me, 'If you have to talk to your representative or congressperson or whatever, go ahead and do it. If you want GSA to do something, it's not going to happen," said Stout. "People tell you there's nothing you can do, but it's refreshing to see that we live in a wonderful country where, if there's the effort of a small group of people, things can change."
Opponents of the legislation argue Congress simply cannot stop the program in its tracks to accommodate a small group of business owners.
"We have long been supportive of government e-initiatives and we believe that it's important to have efficient e-systems and processes that run across agency lines," said Olga Grkavac, executive vice president of the Information Technology Association of America. "We're hoping the Senate will reconsider the House's decision. The federal government has always been very concerned about small business participation and there's a role for small businesses to play in this e-government initiative. To terminate the program because of the complaints of a few risks millions of dollars to taxpayers."