<B> GAO Slams Fed's Travel</B>
<I>Contractor Policies Under House Review</I>
By Barbara Cook
<I>Washington</I> - The U.S. Department of Energy could slash millions from its travel budget each year by implementing better travel management practices, the General Accounting Office determined in a new audit requested by the House Appropriations Subcommittee on Energy and Water Development.
GAO was charged with evaluating the success of a five-year DOE initiative to reduce the travel costs incurred by government contractors, which account for about 80 percent of the department's more than $300 million annual travel spend. The initiative was implemented in 1995 to reduce federal travel costs by $35 million a year, $30 million of that from contractors. Initially, the results were good, and the travel tab of DOE contractors fell from $261 million in fiscal year 1995 to $223 million in 1996. But that was the only year in which cost reductions met the target.
"Contractors did not continue to achieve such savings because DOE did not enforce its cost reduction targets and some contractors did not have an overall strategy to achieve lower travel costs," the report said. "Greater emphasis on travel management, by controlling the amount of travel, and on travel cost control, by minimizing airfare costs and other travel costs, could result in additional travel cost savings."
GAO noted that DOE simply established an overall cost-reduction target and allowed the contractors to develop their own cost-savings measures.
DOE is on track to meet its cost-savings goals only because it has reduced its own travel significantly beyond the expected $5 million each year, GAO found. By fiscal 1998, federal travel costs had fallen $15 million from the 1995 level.
Contractors told GAO that much of their travel is dictated by the department to eliminate the need for DOE's own staff to travel, thus holding down DOE's travel costs while at the same time increasing those of its contractors.
Still, GAO recommended contractors look to their own houses. The DOE Inspector General cited, for example, the hundreds of contractors who attended a 1997 conference in Vancouver, incurring travel costs of about $1 million. Contrary to government policy, DOE had no internal procedures to minimize the number of attendees, though it later issued rules on conference management.
DOE contractors have initiated some efforts to reduce travel costs, GAO acknowledged, including greater use of videoconferencing and efforts to reduce the cost of airline tickets through block purchases of tickets, increased use of Saturday night stays and negotiated discounts.
But none of the five contractors reviewed in detail by GAO had an overall strategy that included setting travel budgets or setting managerial controls over the extent of travel. In most instances, travel expenses were absorbed into a large program budget.
GAO also noted that some contractors frequently spent well beyond what their federal counterparts are allowed to spend. "It is difficult to justify why some contractors allow their staff to stay in high priced hotels, purchase higher priced airline tickets or charge higher meal costs when others take stronger actions to minimize such costs," GAO said.
GAO recommended that DOE set travel cost targets for each contractor, establish a clear policy on allowable expenses and incorporate them into contracts.
In its response to the audit, DOE agreed to establish cost targets and ensure a "commitment" from contractors to meet them. But it did not specifically agree to require that contractors not exceed the targets. It also will "evaluate the merits" of setting per diems for the reimbursement of contractors.
David Schwoegler, a spokesman for the Lawrence Livermore National Laboratory in California, which is operated by the University of California, listed a number of steps his employer has taken to meet DOE's cost-reduction targets. Many of these changes were made prior to issuance of the GAO report, he noted.
Among the measures, the lab books 75 percent of domestic flights on non-refundable tickets, a step that saved $2 million in fiscal year 1998, Schwoegler said. The lab also saved $500,000 in the last fiscal year by using non-refundable tickets on international flights. The lab also is saving $1.9 million annually by using teleconferencing and $700,000 annually by contracting with rental car and hotel companies for negotiated discounts. While the lab still employs a travel manager, the reservations and ticketing functions have been outsourced to Maritz Travel Co. of St. Louis, saving another $1 million annually, Schwoegler said.
The lab allows its travelers a per diem of up to $46 for meals, tips and gratuities. Allowable hotel charges are based on the Runzheimer guidelines.
In response to GAO examples of hotel charges by Livermore Lab employees that are "significantly higher than the federal lodging rates," Schwoegler produced a chart for BTN listing the reason behind the selection of each hotel questioned by GAO. The explanations ranged from "last minute notice of trip" and "only room available" to "had booked room at government rate but hotel didn't honor ID and was charged going rate" and "room was supposed to be comp," since the lab was hosting a conference in the facility.
"As far as limiting attendance at conferences, the individual departments in our lab have monies budgeted for participation in conferences, which is needed for an exchange of scientific ideas," Schwoegler said. "It's not an open ticket. It's not as if something is seriously broken here. We have an ongoing program of cost containment, and we do an exemplary job in keeping travel down."
At Los Alamos National Laboratory in New Mexico, also operated by the University of California, the release of the GAO audit brought a new policy limiting employee airfare reimbursement to the lowest available air fare.
There will be exceptions allowed, depending on the circumstances. Further, Los Alamos will emphasize its existing policy to buy non-refundable tickets whenever possible.
"By and large, there was general agreement on everybody's part that we were spending too much on travel, but there were reasons for that. It wasn't just irresponsibility," said Los Alamos spokesperson Kevin Roark. "There were lots of trips that we had to make. A lot of our people would have to make a short-notice trip to Washington, D.C., to assist in technical way a DOE official who might be testifying before Congress. We would end up buying a high-dollar ticket that you buy just before traveling. And there will continue to be trips like that."
Los Alamos does have an in-house travel department, but employees are allowed to book travel independently if they choose and still be reimbursed. Roark noted that the lab has negotiated airfares with two airlines, which he declined to name, for the Albuquerque-Washington, D.C., route, its most heavily traveled city pair.
GAO specifically cited the Los Alamos lab for a program in which employees studying toward a master's degree program offered by the University of New Mexico in Albuquerque were reimbursed for hotel and meal expenses, saying the reimbursement by DOE was not justified. But Roark said that reimbursement for the program had originally been agreed to by DOE as an employee retention benefit. In May, during a review of the lab's contract, DOE determined that these educational expenses would no longer be paid.
Los Alamos employees also were mentioned in GAO's criticism of too many contractor employees attending conferences, especially the 1997 conference in Vancouver. As a result, "we have made line management more aware that if employees are going to a conference, it has to be absolutely necessary that they go," Roark said, but he added that the lab does not have written guidelines for conference attendance.
Sandia National Laboratories in New Mexico, also one of the five contractors studied in detail by GAO, has a number of technology initiatives in place to reduce travel costs, as well as air, car and hotel contracts negotiated by parent Lockheed Martin, according to Camille Gibson, Sandia's manager of treasury and travel services. The initiatives were in effect prior to the GAO audit. Further, all employee travel requires verbal or written pre-approval by a supervisor.
Sandia Labs, which has a $40 million annual travel spend, has just switched to booking travel through a Lockheed Martin office handled by American Express. This move has given employees access to AXI, which Gibson said has been met enthusiastically by company travelers. "We had a big response to people wanting to use the online booking tool," she said. "Our people love computers and they love seeing what's available and making their own decisions."
For the past year Sandia also has offered a Web-based electronic expense voucher, which is used by 88 percent of its 5,000 to 6,000 travelers.
Sandia requires travelers to purchase the lowest logical airfare and non-refundable tickets, if available. The technology-savvy corporate culture also makes Sandia travelers big users of electronic airline tickets.
Sandia tracks its travel costs and compares them year over year, Gibson said. She noted that there is an inflation factor that causes the spend to increase, but the lab programs also change "and that has an effect on travel."
Still, Sandia's travel spend for the past five years has been a fairly constant figure, she said.