E-Government Travel: Participation by Small Businesses and	 
Estimated Program Savings (15-SEP-06, GAO-06-911).		 
                                                                 
In November 2003, the General Services Administration (GSA)	 
awarded three 10-year e-Government Travel Service (eTS) master	 
contracts as part of the e-Gov Travel initiative, managed by the 
General Services Administration (GSA), which aims to save costs  
and improve service by providing a common, integrated approach to
managing government travel functions. GSA has projected that	 
e-Gov Travel will realize about $473 million in savings across	 
the government between fiscal years 2002 and 2013. As directed by
Senate Report 109-109, GAO is reporting on its study of (1)	 
whether GSA has appropriate mechanisms in place to help ensure	 
the use of small business travel agencies in the e-Gov Travel	 
program and (2) the soundness of GSA's estimate of potential	 
savings. GAO evaluated GSA's small business goals and results and
assessed GSA's cost-benefit analysis based on criteria developed 
by the Office of Management and Budget (OMB).			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-911 					        
    ACCNO:   A60967						        
  TITLE:     E-Government Travel: Participation by Small Businesses   
and Estimated Program Savings					 
     DATE:   09/15/2006 
  SUBJECT:   Contractors					 
	     Cost analysis					 
	     Data collection					 
	     E-government					 
	     Federal agencies					 
	     Program evaluation 				 
	     Program management 				 
	     Small business					 
	     Travel						 
	     Official travel					 
	     Savings estimates					 

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GAO-06-911

     

     * Report to Congressional Committees
          * September 2006
     * E-GOVERNMENT TRAVEL
          * Participation by Small Businesses and Estimated Program Savings
     * Contents
          * Results in Brief
     * E-Government Travel: Participation by Small Businesses and Estimated
       Program Savings
     * Comments from the General Services Administration

Report to Congressional Committees

September 2006

E-GOVERNMENT TRAVEL

Participation by Small Businesses and Estimated Program Savings

Contents

Abbreviations

September 15, 2006Letter

The Honorable Christopher Bond Chairman The Honorable Patty Murray Ranking
Minority Member Subcommittee on Transportation, Treasury, the Judiciary,
Housing and Urban Development, and Related Agencies Committee on
Appropriations United States Senate

The Honorable Joe Knollenberg Chairman The Honorable John W. Olver Ranking
Minority Member Subcommittee on Transportation, Treasury, the Judiciary,
Housing and Urban Development, and Related Agencies Committee on
Appropriations House of Representatives

The President has identified the expansion of electronic government
(e-government)1 as one of the five priorities of his management agenda. To
support this priority, the Office of Management and Budget (OMB) developed
an implementation strategy that identified 25 e-government initiatives.
One of these initiatives, e-Gov Travel, managed by the General Services
Administration (GSA), is intended to provide a common, automated, and
integrated approach to managing government travel functions that will both
realize cost savings and improve service. In November 2003, GSA awarded
three 10-year e-Government Travel Service (eTS) master contracts, under
which three vendors agreed to offer a full array of travel management
services to federal agencies. Small travel agencies can also offer
services, as subcontractors to eTS vendors or directly to federal
agencies. GSA has projected that e-Gov Travel will realize about $473
million in savings across the federal government between fiscal years 2002
and 2013.

Senate Report 109-109 directed us to study the use of small businesses in
the e-Gov Travel program, with a focus on travel agencies offering
services to federal agencies through GSA's Travel Services Solutions (TSS)
schedule. The report also directed us to assess the program's anticipated
savings. Our specific objectives were to determine (1) if GSA had
appropriate mechanisms in place to help ensure the use of small business
travel agencies, including travel agencies on the TSS schedule, and (2)
the soundness of GSA's estimate of potential savings expected to accrue to
the federal government from moving to eTS.

To determine whether GSA had appropriate mechanisms in place to help
ensure the use of small business travel agencies, we

o analyzed GSA's small business goals and compared them with eTS vendors'
small business plans and their reported subcontracting with small
businesses for the second half of fiscal year 2005;

o analyzed documentation of the e-Gov Travel program and interviewed
officials at GSA regarding efforts to ensure that small business travel
agencies have the opportunity to participate;

o interviewed officials at agencies that had begun implementing eTS
systems (the National Science Foundation and the Departments of
Agriculture, Transportation, and the Treasury) to assess how their planned
use of small business travel agencies made use of GSA's mechanisms; and

o interviewed 11 representatives of small business travel agencies to
obtain their views regarding GSA's efforts and the eTS program. To select
these travel agencies, we consulted with GSA and the Society of Government
Travel Professionals2 to identify travel agencies in a variety of
contracting relationships with the federal government, including those
that are currently subcontracting under the eTS program (3 agencies),
those currently listed on the TSS schedule (10 agencies, including 3 that
also have eTS subcontracts), and 1 travel agency that is not currently
involved in either eTS or TSS but is interested in doing business with the
government. The TSS schedule travel agencies included those holding active
task orders with federal agencies (4 agencies) as well as those without
task orders (6 agencies).

To assess the reliability of vendors' reported subcontracting with small
businesses, we interviewed officials from each of the vendors and assessed
documentation regarding independent reviews and other quality control
processes they had in place.

To determine the soundness of GSA's estimate of the potential savings from
the eTS program, we evaluated GSA's cost-benefit analysis against selected
criteria in OMB Circular A-94 pertaining to savings estimation and
discussed the rationale for the estimate with program officials. Our work
was conducted from January 2006 through May 2006, in accordance with
generally accepted government auditing standards.

On June 12, 2006, we provided a briefing to staff from your offices on the
results of our work. The briefing slides are included in appendix I. The
purpose of this report is to publish the briefing slides and transmit the
recommendations to GSA.

Results in Brief

GSA has appropriate mechanisms in place to ensure that small travel
agencies have opportunities to obtain federal travel business through
participation in the eTS contracts and the TSS schedule. Specifically, GSA
included provisions within the eTS contracts to (1) promote small business
use and engaged in outreach to explain them and (2) established the TSS
schedule to supplement eTS and permit small businesses and others to
participate. Small businesses have participated in both eTS and TSS, and
vendors have reported meeting eTS subcontracting goals for small business
in fiscal year 2005. However, the e-Gov Travel program office has not
tracked the amount of business TSS schedule travel agencies have received
and thus has not yet gauged the overall effectiveness of the schedule as a
means of facilitating small business participation. Further, it is
uncertain whether GSA intends to waive or modify its requirement that
travel agencies conduct $25,000 in business each year to maintain their
TSS schedule contracts. In light of the limited implementation status of
the e-Gov Travel program, such a requirement could be an impediment to
small travel agency participation.

GSA's estimate of e-Gov Travel savings across the federal government is
not well supported. Much (74 percent) of the benefits projected for fiscal
years 2002 through 2013 is based on GSA's calculations of expected
productivity savings associated with streamlined processing of travel
orders and vouchers. GSA did not determine whether individual agencies
planned to take action to implement these savings (such as by reallocating
affected personnel resources to other tasks), and thus it is unclear
whether these savings are likely to be realized. Further, the estimate
does not reflect additional savings potentially gained by consolidating
the government's acquisition of travel services and eliminating
duplicative systems, which GSA states would be prohibitively expensive to
calculate. As a result, the extent of savings to be expected from
implementing the e-Gov Travel program is unclear. While a new estimate of
anticipated savings would be of limited value, tracking actual savings
realized would provide a useful measure of program success. However, GSA
does not plan to collect data from individual agencies on the extent of
actual savings resulting from the program.

We are recommending that GSA take the following two actions: (1) ensure
that its administrative processes do not impede small business travel
agencies from having reasonable opportunities to obtain and maintain
business with the federal government and (2) collect data from individual
agencies on savings realized as they implement e-Gov Travel and report
periodically to OMB.

We received written comments on a draft of this report from the
Administrator of GSA. This letter is reprinted in appendix II. GSA
generally agreed with the content of our report and our recommendations.

We are sending copies of this report to the Administrator of GSA and other
interested congressional parties. We also will make copies available to
others upon request. In addition, the report will be available at no
charge on the GAO Web site at h  ttp://www.gao.gov.

If you have questions concerning this report, please call me at (202)
512-6240 or send e-mail to k  [email protected]. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. Major contributors to this report are Barbara
Collier, John de Ferrari, Neil Doherty, Vernetta Marquis, and Elizabeth
Zhao.

Linda D. Koontz Director, Information Management Issues

Appendix I

E-Government Travel: Participation by Small Businesses and Estimated
Program Savings

Appendix II

Comments from the General Services Administration

(310773)

www.gao.gov/cgi-bin/getrpt? GAO-06-911 .

To view the full product, including the scope
and methodology, click on the link above.

For more information, contact Linda Koontz at (202) 512-6240 or
[email protected].

Highlights of GAO-06-911 , a report to congressional committees

September 2006

E-GOVERNMENT TRAVEL

Participation by Small Businesses and Estimated Program Savings

In November 2003, GSA awarded three 10-year e-Government Travel Service
(eTS) master contracts as part of the e-Gov Travel initiative, managed by
the General Services Administration (GSA), which aims to save costs and
improve service by providing a common, integrated approach to managing
government travel functions. GSA has projected that e-Gov Travel will
realize about $473 million in savings across the government between fiscal
years 2002 and 2013.

As directed by Senate Report 109-109, GAO is reporting on its study of (1)
whether GSA has appropriate mechanisms in place to help ensure the use of
small business travel agencies in the e-Gov Travel program and (2) the
soundness of GSA's estimate of potential savings.

GAO evaluated GSA's small business goals and results and assessed GSA's
cost-benefit analysis based on criteria developed by the Office of
Management and Budget (OMB).

What GAO Recommends

GAO recommends that GSA (1) ensure that its administrative processes do
not impede small business travel agencies from having reasonable
opportunities to do business with the federal government and (2) collect
data and periodically report to OMB on savings realized from implementing
e-Gov Travel. GSA generally agreed with the content and recommendations in
this report.

GSA has appropriate mechanisms in place to ensure that small travel
agencies have opportunities to obtain federal travel business (1) by
participating in the eTS contracts, under which three vendors agreed to
offer a full array of travel management services to federal agencies, and
(2) through the Travel Services Solutions (TSS) schedule, which serves as
a comprehensive contracting vehicle for federal agencies wishing to
acquire related services such as professional travel agents. Specifically,
GSA included provisions within the eTS contracts to promote the use of
small business subcontractors, which include travel agencies as well as
other small businesses. These provisions include goals for the amount of
business to go to small business subcontractors and financial incentive
awards for meeting or exceeding those goals, as well as monetary penalties
for not meeting the goals. GSA also engaged in outreach to explain these
contract provisions to agencies and the business community. In addition,
it established the TSS schedule to supplement the eTS contracts and permit
small businesses and others to participate. Small businesses have
participated in both, and the three eTS vendors have reported meeting the
contracts' goals for small business subcontracting in fiscal year 2005.
However, the e-Gov Travel program office has not tracked how much business
the travel agencies on the schedule have received; thus, the office has
not yet gauged the overall effectiveness of the schedule for facilitating
the participation of small businesses. Further, it is uncertain whether
GSA intends to waive or modify its requirement that travel agencies
conduct $25,000 in business each year to maintain their schedule
contracts. Such a requirement could be an impediment to the participation
of small travel agencies.

GSA's estimate of e-Gov Travel savings across the federal government is
not well supported. A large proportion (74 percent) of the projected
benefits is based on GSA's calculations of expected productivity savings
to be gained from streamlined processing of travel orders and vouchers.
However, GSA did not determine whether individual agencies planned to take
action to realize productivity savings (for example, by reallocating
personnel to other tasks). It is thus unclear whether these savings will
be borne out. Further, the estimate does not reflect other savings that
could be gained by consolidation and the elimination of duplicative
systems; GSA has stated that calculating such savings would be
prohibitively expensive. As a result, it is unclear what savings can be
expected from implementing e-Gov Travel. At this point, a new estimate of
anticipated savings would be of limited value, but tracking actual savings
would provide a useful measure of program success. Currently, however, GSA
does not plan to collect data from individual agencies on actual savings.
*** End of document. ***