The
U.S. General Services Administration on Feb. 2 posted a notice to the Federal Register confirming it would
award in April contracts for the second-generation e-Gov Travel Service. GSA
laid out the timeline for the transition to ETS2 from the first version of ETS,
starting on March 30, 2012—the deadline for all agencies to execute a
memorandum of understanding for full deployment of ETS2—and ending in November
2015, when ETS1 is sunset.
Concur
chairman and CEO Steve Singh last week corroborated a recent BMO Capital
Markets report that predicted both Concur and incumbent CWTSatoTravel/Northrop
Grumman would win "hunting licenses" to compete for task orders by
each federal agency.
BMO
equity analysts last month issued research noting that the Carlson Wagonlit Travel-Northrop team "now has roughly 75 percent of the existing contract
and hence a strong incumbent advantage. While our sources admitted that the
current Carlson Wagonlit solution is perceived as being too complex, they also
argued that Carlson Wagonlit has a 'decent' reputation with no chorus of voices
looking to boot out the incumbent vendor." They estimated that Concur
would secure about one-third of the business.
The
Federal Travel Regulation requires "all" agencies to use "an ETS,"
a requirement that "extends to ETS2," GSA said. There are exceptions,
notably the Department of Defense, which uses the separate DTS, though GSA said
DoD "may choose to participate in ETS2."
GSA
said each agency's memorandum of understanding will identify its plans for
transition, including such milestone dates as awarding and executing task
orders, configuring ETS2 and integrating systems, initial implementation and
full deployment.
According
to GSA, the end-to-end ETS2 travel management system "will focus on the
administration's principles of strategic sourcing, data-driven transparency,
standardization, consolidation, sustainability and cost reduction." It
will be governed by a 15-year master contract consisting of a three-year base
period and three four-year options.
Pre-existing
10-year ETS master contracts expire Nov. 11, 2013. GSA noted that contract
extensions "are available in the event transition to ETS2 is not
complete." A year later, the "extension base period" ends and
agencies will face "significantly" higher transaction fees "as
transaction volumes decrease." In November 2015, the anticipated ETS
"extension option period" ends and ETS will be "no longer
available."
The
BMO analysts wrote that their government sources suggested "that the
annual ETS2 contract revenues could end up closer to $75 million rather than
$100 million" initially expected due to pending cuts in federal travel.
— Jay Campbell contributed
to this report.