The U.S. Federal Government eTravel Service (eTS) has been under formal development for over a year and promises radical changes to the way the government procures and accounts for travel services. Initiated by the U.S. General Services Administration (GSA), the discussion phases of the project resulted in a complicated and challenging RFP and three contract awards to EDS, Northrop Grumman Mission Systems and Carlson Wagonlit Government Travel, Inc.

From the perspective of the suppliers, participation in the eTS project becomes much more attractive, and the substantial investments in the requisite systems and infrastructure is made acceptable, if there is some promise that real customers will eventually emerge.

Almost from the start of the eTS initiative, there has been discussion of "mandates," in that federal agencies will eventually be required to use eTS as their travel service delivery platform of choice. Will that mandate materialize in practics and why does the GSA believe mandating compliance is appropriate anyway?

WHERE IS ETS HEADED?

According to the GSA, the eTS is a "Government-contracted, end-to-end travel management service that automates and consolidates the Federal travel process in a self service Web-centric environment, covering all aspects of official travel, including travel planning, authorization, reservation, reservations, ticketing, expense reimbursement, and travel management reporting." (1)

GSA has also stated that eTS would "support reengineering of the entire travel process to realize significant cost savings and improved employee productivity." (2)

eTS is more than simply an on-line booking system and entails complex integration with systems validating compliance with Federal Travel Regulations, approval and payment systems, and a variety of reporting tools. All this comes at a price, which must be rationalized within existing federal agency budgets.

The three suppliers awarded contracts are undergoing testing of their respective systems by GSA and participating federal agencies. Once testing is complete, the companies will be able to market their services to federal agencies, with implementations scheduled to begin by December 31, 2004.

Simultaneous with this testing phase, the GSA has advised federal agencies that they must develop plans to implement eTS and that they are required to complete migration by September, 2006.

WHAT ABOUT THESE MANDATES?

"Mandate" is the current watchword in the on-line travel booking world, and is not confined only to federal travel. Only by requiring business travelers to abandon their preferred purchasing methods have the sellers of on-line travel systems been able to realize the adoption rates that begin to make their business models practical.

It’s more than a little strange, however, when one considers that travelers must be compelled to use tools that promise superior efficiency, customer service, and value. Users of these systems frequently appear to have other ideas about their efficacy.

Federal travel has eagerly embraced the same mandate model. This is a substantial departure from normal practice, which usually relies upon competition and marketplace efficiencies to deliver value to government customers.

How did this happen?

The GSA generally procures services and goods through Federal Supply Schedules that any federal agency may use to obtain these goods and services.

When an agency does use Federal Supply Schedule contracts, a fee, called an industrial funding fee, is paid to GSA to help defray the costs of its operations. However, no federal agency is required to use either GSA or the Federal Supply Schedules for procurement of any services or products.

The eTS contract appears to be different. It looks like a Federal Supply Schedule in several respects: It is a multiple award contract offering federal agencies a choice of three possible contractors and agencies will be required to pay GSA an industrial funding fee of $3.50 per voucher processed under it.

It differs from a Federal Supply Schedule contract in that it was not procured through GSA’s FSS Division but through GSA’s Governmentwide Policy Division. Moreover, the GSA has amended the Federal Travel Regulations in a manner which suggests that use of eTS is not voluntary but mandatory.

GSA RULE-MAKING

GSA first proposed amending the Federal Travel Regulation in June 30, 2003. At that time, the proposed changes stated that the term "Travel Management System" as used in the Federal Travel Regulations would be revised to "Travel Management Service" and further defined eTS as the Travel Management Services for executive branch agencies.

GSA also stated that its proposed rule required agencies to submit migration plans and schedules to its office overseeing eTS – the eTravel Program Management Office no later than March 31, 2004

The proposed rule also required federal agencies to allocate the budget and personnel resources necessary to support eTS implementation, training and use data exchange, including programming agency funds to establish interfaces between eTS standard data output and an agency’s applicable business systems. (3)

The rule also stated that federal employees would be required to use the eTS and if an employee did not, the employee would be responsible for any additional costs such as cancellation penalties and service fees, and the employee could also be subject to appropriate disciplinary action.

In this proposed rule, the GSA did allow for limited exemptions or waivers from using the eTS. An agency head could exempt waivers on a case by case basis, however the waivers were to be limited to security reasons, necessity of disability accommodations or special needs or invitational travel.

An agency head could not exempt its entire agency from GSA requirements. Only GSA could do so and only for two reasons—it was not in the best interest of the Government or use of the eTS was impractical or imposed unreasonable waivers or costs to the agency.

The GSA’s decision to grant an agency-wide waiver was wholly within its own discretion.

The proposed rule was published for comments by interested parties, with comments due within the thirty days of publication—prior to any actual award of a contract under eTS.

Over the holiday season (December 22, 2003), GSA issued its final rule on its new eTravel Service. In this rule, GSA states that it amended the "Federal Travel Regulations (FTR) required use of a travel management system to the required use of the Governmentwide eTravel Service." (Emphasis added).

The final rule requires federal agency employees to use eTS and adopts the plan submission and implementation timetables contained in the proposed rule.

The GSA did broaden the circumstances under which an agency head could approve exceptions to the use of eTS on an individual case-by-case basis and it also broaden the circumstances under which GSA would consider in granting an exception to a federal agency.

Under the final rule, an agency head may grant individual case-by-case exceptions to the use of eTS when such use:

1. Causes an unreasonable burden on mission requirements, invitational travel, necessity of disability accommodations or special needs.

2. Compromises a national security interest.

3. May endanger the life of the traveler.

4. Is consistent with any contractual terms applicable to the agency (that is, the agency must determine that any exceptions do not cause a breach of contract).

The GSA would itself consider (but is not required to grant) an agency-wide exemption to use of eTS if the head of the agency requested such an exemption and only for the following reasons:

1. The agency has presented a business case analysis to GSA that proves that it has an alternative to eTS that is in the best interest of the Government and taxpayer.

2. The agency has security, secrecy, or protection of information issues that cannot be mitigated through security provided by the eTS contractors.

3. The agency lacks the technology necessary to access eTS.

4. The agency has critical and unique technology or business requirements that cannot be accommodated by the eTS contractors at all or at an acceptable and reasonable cost.

If the GSA did grant an exemption, the agency was required to submit an annual business case review of its travel program and required to provide such data elements to the eTS Program Management Office as it may require and in a format it prescribes.

Presumably, if an agency failed to justify its business case in the annual review, then GSA could withdraw the exemption, however that is not stated in the rule. Nor does it appear that an agency could use lack of funding for eTS as a basis for an agency-wide exemption.

THE VIEW FROM THE HILL

The GSA explained in its final rule that it had received feedback on the proposed rule of June 30, 2003 from only ten Federal agencies and one individual during the comment period and that it carefully reviewed each comment before issuing the final rules.

After the GSA issued the proposed rule mandating use of eTS for all federal agencies in June 2003, the U. S. House of Representatives approved a bill to fund the Departments of Transportation and Treasury and various independent agencies, including the GSA. Included in the bill (H.R. 2989), in the section for GSA funding, was a specific provision that prohibited GSA from using any funds appropriated under the bill to develop or implement a mandatory system for federal agencies with respect to electronic travel services unless the system allows exceptions.

In the Committee Report that accompanied the bill (4), the Committee on Appropriations made clear its intent that the provision was intended to prevent a mandatory system required to be used by all federal agencies:

"In addition, the Committee includes a new general provision for GSA that prohibits the use of any funds in the Act for a mandatory purpose, if exclusive of exceptions, specifically included in the proposed increase.

"The proposed increase would be used in part to establish a standard booking engine as well as a consistent travel and voucher system for the Federal Government. Use of this standard booking engine and travel voucher system would be mandatory for all agencies, raising serious concerns concerning competition within the private sector and its impact on small businesses ….

"The recent evolution of the activities of the General Services Administration has been from mandatory to optional participation on the part of agencies. A prime example has been the offering of long-distance telephone service, in which previously all agencies were required to participate in the GSA contract. Now, agency participation in the GSA-operated long-distance telephone contract is optional. This has forced GSA to be cost conscious in its long-distance service contract and has contributed to substantial savings throughout the government. Similarly, the multiple award schedules have encouraged price competition among vendors, allowed broad private-sector business participation, and led to significant cost reductions on a voluntary basis throughout the Federal Government. The Committee applauds these developments and their impacts on competition and urges GSA to continue stressing agency choices and options in its services."

This bill was not passed by both houses of Congress, instead funding for GSA was rolled into the Omnibus Appropriations Bill that funded all agencies whose appropriations had not yet been signed into law. The Omnibus Appropriations bill did not include the specific provision within GSA’s section that prohibited funds from being used for a mandatory travel system. However the Conference Report on the Omnibus Appropriations Bill (5) makes clear why in the section under Government-wide policy appropriations:

"e-travel.—The conferees agree that GSA has been responsive to the House’s concerns that the e-travel initiative should not involve mandatory participation by Federal agencies."

The date of this report was November 30, 2003—three weeks prior to GSA issuing its final rule.

On two separate occasions Congress has made clear its view that the eTS should not be mandatory. Both of these occasions were well before the GSA issued its final rules which mandate use of the eTS by all federal agencies and which give the GSA sole discretion to determine if a federal agency will be granted and exemption from use.

SUMMARY

Does this mean that the GSA will liberally grant exemptions in keeping with Congress’s intent that the system should not involve mandatory participation? Industry sources suggest that the GSA intends to keep a tight lid on granting any exemptions and that Congress may need to once again provide the GSA with additional feedback in a stronger legislative manner.

Others suggest that the GSA will surely not strong-arm federal agency participation in view of Congress’s clear message, particularly if GSA intends to seek supplemental appropriations later this year for any of its programs.

The clear lesson applicable to government travel procurement is that the discipline of competition, including the ability of the customer to walk away from all unacceptable products, is essential to keeping systems in touch with their users and the evolution of the marketplace, while delivering optimal value to the government.