GSA To Consolidate, Automate

<B> GSA To Consolidate, Automate</B>

By Sarah Welt

<I>Washington, D.C.</I> - The General Services Administration has issued a memo to the U. S. Government Chief Financial Officers Council outlining a plan to allow for the payment of travel agency fees for the first time in history as its contracts expire over the next two years.

This proposed approach should provide a boost to the travel management companies that service the GSA account, many of whom have expressed their concern about their ability to service government travelers from federal agencies that refuse to give up their traditional revenue-sharing arrangements (<I>BTN,</I> Feb. 23).

"Government travel agencies have been protesting GSA contracts because they can't make any money on them," said consultant Ralph Brown, of R.D. Brown Company in South Elgin, Ill. "Those contracts that were written in the past five years gave a certain percentage rebate to the government. Now, with less commissions coming in, they are still required to give that same rebate."

Brown said the GSA likely will put out its first consolidated bids for nationwide services, which it will split among several agencies. At this time, however, "This is only a concept; nothing is concrete," said Brown. Today, the GSA has 140 travel management center contracts worldwide administering its mammoth $500 million annual air spend.

The Society of Travel Agents in Government last summer made a presentation to the GSA about the merits of fee-based pricing. "They were very receptive and obviously, based on the memo, they are at least attempting to embrace it," said STAG president Phyllis Reagan, who also is vice president of Professional Travel Corp. in Denver.

Allan Zaic, assistant commissioner for transportation and property management with the Federal Supply Service is planning to meet with the CFOs council this fall to discuss the new approach. "What we are doing is changing the way we are contracting; this is a promotion and an educational opportunity," he said. "I am letting people know that is what we are doing and why, and why it is in their best interest to contract travel with us if they desire. But the GSA is not a mandatory source and nobody in government has to use our contracts."

The GSA is proposing a pricing structure that would charge a single transaction fee for an airline ticket, hotel room and rental car. Government agencies could negotiate lower fees individually. Additionally, the GSA would restructure its industrial funding fee from a percentage of domestic air sales to a fee per ticket that would be added to the transaction fee.

The IFF is the cost of running the travel operation within the Federal Supply Service Company. "It is a way to recover the cost of developing and administering these contracts and the offices that run travel management contracts can recover costs each time a ticket is issued," said David Kleinberg, the Department of Transportation's deputy chief financial officer.

The GSA also plans to negotiate a refund of its commissions on domestic air sales equal to the monthly commission rate stated by the Airline Reporting Corp.

In other government business, DOT plans to make a central travel booking Website available to every government agency as a way to reduce spending and access negotiated air, car, hotel and train fares. DOT is working with R.D. Brown Co. to develop a request for proposals for the competitive bid that should be complete next month.

The request for information for the Website, released last week, indicated that DOT plans to have two or more booking engines as well as ticket fulfillment services.

In concept, one fee would be paid for transactions made through the site and a separate fee would be paid for fulfillment. Initially, payment for airline travel would be made through the government travel card, but in the future, DOT may choose to establish direct payment relationships with airline suppliers or use other payment vehicles. The RFI also stated that DOT is exploring special arrangements with ARC. Kleinberg said those plans have yet to be determined.