[Congressional Record Volume 142, Number 87 (Thursday, June 13, 1996)]
[House]
[Pages H6405-H6406]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  2315
  THE NEED TO REFORM FEDERAL TRAVEL PRACTICES AND SAVE $300 MILLION A 
                                  YEAR

  The SPEAKER pro tempore (Mr. Collins of Georgia). Under a previous 
order of the House, the gentleman from California [Mr. Horn] is 
recognized for 5 minutes.
  Mr. HORN. Mr. Speaker, there is a fundamental need to reform the 
Federal travel practices and thus save at least $300 million a year. 
Today on behalf of the gentleman from Pennsylvania [Mr. Fox] and 
myself, I am introducing H.R. 3637, to improve travel management in the 
Federal Government.
  The Federal Government is far behind the best practices of private 
sector firms. At long last, we need to adopt practices common in the 
private sector in order to save the taxpayers money. According to the 
General Accounting Office, Federal agencies spent $7.6 billion in 
fiscal year 1994 on travel, including transportation, lodging, rental 
cars, other travel related expenses related to two types of travel: 
Temporary duty and permanent relocation.
  Administrative costs to implement the current travel regulations and 
practices of the Federal Government are also significant. In the 
private sector, the costs to complete a travel voucher are about $15. 
In the public sector, the Federal sector, the cost to process a single 
travel voucher can be as high as $123. Since there are 10 million 
vouchers processed each year, the Federal Government must reengineer 
its travel management practices in order to achieve significant 
savings.
  The Federal Government needs to reform its travel processes if we are 
to succeed in saving $300 million every year. The General Services 
Administration needs to update the Federal travel regulations, and H.R. 
3637 will be ensuring that change and reform can be done in a way that 
increases savings and decreases the amount spent by Federal agencies on 
travel. H.R. 3637 has been endorsed by the joint financial management 
improvement project, which includes membership from the General 
Accounting Office, part of the legislative branch, and the Office of 
Management and Budget, the General Services Administration and the 
Office of Personnel Management, as well as the Department of the 
Treasury. These are the experts in travel management in Federal 
agencies.
  In addition, the strong support of Senator Cohen of Maine has been 
instrumental in providing Federal agencies with the spur that was 
needed to develop these proposals which are designed to reduce costs 
and to provide agency flexibility. I commend Senator Cohen's efforts, 
and we will be working with him to enact this important measure.

  As we begin the process of balancing the Federal budget, Congress 
must look to Federal agency managers and its employees to find 
innovative and creative ways to save travel dollars. H.R. 3637 
represents an important part of that effort. According to the joint 
financial management improvement project, $300 million per year may be 
saved from the appropriated funds of the taxpayers. By reducing the 
administrative burden, we can achieve substantial savings by passing 
H.R. 3637, the Travel Reform and Savings Act of 1996.
  Mr. Speaker, I ask consent that a summary of H.R. 3637 be printed at 
the end of my remarks.

          Summary of the Travel Reform and Savings Act of 1996

       Section 1. Short title--Travel Reform and Savings Act of 
     1996.
       Section 2. Table of contents.
       Title I. Relocation Benefits.
       Section 101. Modification of allowance for seeking 
     permanent residence quarters.
       This section would authorize the payment of pre-determined 
     travel expenses for househunting trips for relocating Federal 
     employees. In the private sector, predetermined cost 
     reimbursement is already used for househunting trips because 
     of simplicity to administer, administrative cost savings, and 
     the flexibility it gives Federal employees to manage their 
     move.
       According to a Joint Financial Management Improvement 
     Project [JFMIP] report entitled Improving Travel Management 
     Governmentwide, this change would save $10.8 million per 
     year.
       Section 102. Modification of temporary quarters subsistence 
     expenses allowance.
       This section would authorize the payment of pre-determined 
     travel costs associated with temporary quarters. While 
     seeking permanent quarters, a relocating employee must often 
     occupy temporary quarters. Federal agencies currently 
     authorize up to 120 days of expenses. This change would limit 
     this time to 60 days, and provide an amount pre-determined by 
     the agency.
       According to the JFMIP report, this change would save $59.2 
     million per year.
       Section 103. Modification of residence transaction expense 
     allowance.
       This authorizes agencies to use cost-reimbursable pricing 
     for relocation service contracts. Currently, the Federal 
     Travel Regulation limits relocation home sale payments made 
     by agencies to direct reimbursement of closing costs. This 
     section would authorize the payment of actual costs, 
     overhead, and a performance-based fee designed to speed up 
     the home sale.
       This limits the liability of the Federal Government by 
     shifting to the contractor the risk that the home will take a 
     long time to sell, and that the contractor's expenses will 
     exceed the fixed payment. Agencies that exercise this 
     authority will need to manage the risk that the home will 
     take a long time to sell.
       According to the JFMIP report, this change would save $33.1 
     million per year.
       Section 104. Authority to pay for property management 
     services.
       When an employee transfers for a limited time period, it 
     may be cost-effective for the employee to rent rather than 
     sell his home in the old duty station. This is particularly 
     true in instances when the employee will return to the old 
     duty station. Since the costs borne by agencies of selling a 
     home are larger than the cost of reimbursing property 
     management fees, there are savings which could be achieved by 
     allowing Federal employees this option.
       According to the JFMIP report, this change would save $1.5 
     million per year.
       Section 105. Authority to provide employment assistance 
     services to the spouse of a transferring employee.
       When a dual career family moves, the accompanying spouse 
     must find employment without the assistance of the Federal 
     Government. This results in the loss of a second income, and 
     often Federal transferees are unable to qualify for home 
     mortgages without the second income. This provision gives 
     agencies discretionary authority to provide some level of job 
     placement to relocating spouses, when deemed in the best 
     interests of the Federal Government.
       According to the JFMIP report, this change would cost $5.9 
     million per year.
       Section 106. Authority to transport a privately owned motor 
     vehicle within the continental United States.
       Current statute prohibits the shipment of a vehicle to a 
     new duty station within the continental United States. 
     Agencies reimburse the transferee for mileage, plus a per 
     diem, which generally exceed the costs of shipping the 
     vehicle and using a more expeditious mode of transportation 
     to relocate the employee. Requiring that vehicles be driven 
     to the new duty station also requires extended administrative 
     leave, thus increasing costs and reducing efficiency.
       According to the JFMIP report, this change would save $7.9 
     million per year.
       Section 107. Authority to pay limited relocation allowances 
     to an employee who is performing an extended assignment.
       This section authorizes agencies to pay for permanent 
     change of station expenses in lieu of the daily per diem 
     allowance for extended assignments. Since employee costs are 
     lower over a longer-period of time, many employees receive an 
     allowance that exceeds what is needed to cover expenses. This 
     provides the option to reduce costs by providing permanent 
     change of station expenses, which can include en route travel 
     and transportation, shipment of vehicles, househunting trips 
     (if necessary) and lease breaking expenses. Employees would 
     not be eligible for expenses related to disposing or 
     maintaining residences at the official duty station.
       According to the JFMIP report, this change would save $14.5 
     million per year.
       Section 108. Authority to pay a home marketing incentive.
       Most Federal agencies currently offer some of their 
     transferees the assistance of a relocation contractor to 
     market and sell their home. The fees charged by the 
     contractor are typically based on a percentage of the home's 
     value, and are quite large. A pilot in the Social Security 
     Administration demonstrated that allowing employees to sell 
     their own homes and be paid a fixed fee can save Federal 
     agencies large figures.
       According to the JFMIP report, this change would save 
     $142.2 million per year.

[[Page H6406]]

       Section 109. Conforming amendments.
       Title II. Miscellaneous Provisions
       Section 201. Repeal of the long-distance telephone call 
     certification requirement.
       Current Federal statute requires agencies to certify that 
     individual long distance calls are in the interest of the 
     Federal Government. This law dates from 1939, when a long-
     distance telephone call was expensive and viewed as a luxury. 
     In many instances, the cost of certifying a call will often 
     exceed the cost of the call itself.
       According to the JFMIP report, this change would save $19.3 
     million per year.
       Section 202. Authority to require use of the travel charge 
     card.
       Currently, Federal agencies receive a payment based on 
     charges made by its employees under the government-wide 
     travel charge card program administered by GSA. Many 
     payments, including cash advances, hotel charges and airline 
     tickets for travel expenses are not charged to the card. This 
     limits the potential rebate.
       Section 203. Prepayment audits for transportation expenses.
       This section authorizes audits prior to payment to verify 
     transportation expenses. All other invoices submitted to the 
     Federal Government are generally audited by the procuring 
     agency for correctness prior to payment. Currently, GSA uses 
     audit contractors to perform prepayment audits on some 
     transportation vouchers. These contractors have identified 
     overpayments that were four times the amount of the payments 
     to contractors, proving that this is a cost-effective tool. 
     In contrast, the GSA Office of Transportation Audits spends 
     $11 million to recover $12 million in overpayments using 
     postpayment audits.
       According to the GSA, this change would save $50 million 
     per year.
       Section 204. Reimbursement for taxes on money received for 
     travel expenses.
       The 1992 Energy Act inadvertently established a tax 
     liability for certain Federal employees. The Energy Act 
     limited the income tax deduction for business related travel 
     expenses incurred while away from home to a maximum of one 
     year (the prior maximum was one year). Most temporary duty 
     assignments are less than one year. Because of this tax 
     change, most Federal agencies have limited temporary 
     assignment to one year.
       Most Federal agencies were unaware of this requirement 
     because the IRS did not notify them until December of 1993 
     and did not withhold tax payments from the employee's salary. 
     Thus, many of the impacted Federal employees were liable for 
     a lump-sum payment plus penalty and interest. In some 
     instances, the tax liability exceeds $1,000 per employee.
       According to GSA, this change would cost $4 million on a 
     one-time basis.
       Section 205. Transfer of authority to issue regulations.
       This section gives statutory authority to the Administrator 
     of General Services to issue regulations, which are currently 
     the subject of a delegation of authority from the President 
     pursuant to several Executive Orders.

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