Bon voyage for Defense Travel System?

Senate tries policy shift to lift ailing DOD program

After eight years of development, the Defense Travel System will finally approach full deployment in 2006. But only a fraction of Defense Department travelers use the system, and its costs have risen. So the Senate is using its budget powers to force accountability and reward performance by switching from appropriated funding to a fee-for-service system.

DTS is an electronic travel system designed to integrate all travel functions, including authorization, ticket purchase, vouchering and accounting. DOD commissioned DTS in 1998 to be a fee-based system that would use commercial technology. The original contract anticipated full deployment by 2002.

The Senate Armed Services Committee passed an amendment to the fiscal 2007 National Defense Authorization bill that would prohibit DOD from spending more money on DTS other than a fixed-price service fee each time the program is used.

Sen. Tom Coburn (R-Okla.), who sponsored the amendment, said the measure is a policy shift that would force the program to be more efficient and more widely used.

“If it is a good program, then let us pay the contractor every time it is used,” he said in a speech on the Senate floor. He told his colleagues that the current structure of the program rewards incompetence and wastes taxpayer dollars, and “most Pentagon employees would be better off to go to Travelocity or Orbitz.”

Overall, the switch to fee-for-service would push the department and prime contractor Northrop Grumman to improve the system’s usability, said Rich Fabbre, Northrop Grumman’s project manager for DTS. “We would be greatly incentivized if we had the chance to make” more money, he said.

“It’s like having a child and trying to get him to eat food,” said Robert Langsfeld, a partner at Corporate Solutions Group. “Make him hungry.”

Although Coburn’s amendment passed, even some of its supporters have doubts.

“The amendment could virtually bring what is in existence at DTS to a standstill,” said Sen. John Warner (R-Va.), the committee’s chairman, who supported the move.

Differing statistics on the system’s use, savings estimates and effectiveness make prescriptions for fixing DTS difficult to evaluate.

But DOD’s requirements for the system changed in the ensuing years. In 2001, the contract was switched to a cost-plus-profit structure. Northrop Grumman then sought to design and build a DOD-tailored system with new technologies. The circumstances that led to the contract change are the subject of an ongoing federal lawsuit in which a government travel company claims that DOD violated the Competition in Contracting Act.

Contractor OK with change

Northrop Grumman is open to the prospect of DTS becoming a fee-for-service system. “That is a mechanism of how we’re paid, but that doesn’t tend to be an issue at all, from our vantage point, in the process,” said Darryl Fraser, vice president of Washington, D.C., operations at the company’s Mission Systems division. Northrop Grumman holds fee-for-service e-travel contracts with the General Services Administration and other civilian agencies, and those work well, Fraser said.

Because DTS deployment is nearing completion, Northrop Grumman could benefit from a fee-per-service structure, he said. About 90 percent of all major military installations — more than 11,000 facilities — will deploy DTS by the end of fiscal 2006, Fraser said. But DOD said only 76 percent of its 3.2 million travelers will be able to use the system by that time.

Furthermore, deployment does not guarantee usage.

“They can deploy [DTS], but if they don’t get any adoption, it doesn’t mean anything,” Langsfeld said. According to his research, DOD employees use DTS for only about 10 percent of their travel reservations. DTS has processed more than 1.87 million vouchers since its inception, according to DOD. That is less than half of the 3.9 million annual transactions originally targeted as necessary for DTS to achieve its savings goals.

DOD said the system will save the government $13 million this year. But the calculations that produced that figure are unclear. Scott Comes, who works in DOD’s Program Analysis and Evaluation office, testified last year that DTS’ estimated savings figures assumed a 60 percent usage rate in the first year and 90 percent thereafter.

Langsfeld’s study also questions DOD’s reports on DTS’ success. “We found some significant variances from what we found when we audited what their claims of performance were,” he said.

Training, better interface needed

Making DTS a performance-based system is a good idea, Langsfeld said. The user interface is cumbersome, and DOD’s training for users is ineffective.

Even at Ellsworth Air Force Base in South Dakota, where the DTS utilization rate is 80 percent because commanders enforce its use, the system remains a mystery to many users. Tracking vouchers is simple, but the interface is not easy to use, said Sgt. Shanda De Anda, a public affairs officer at Ellsworth. “I don’t know the system well enough to know which buttons to click,” she said.

Poor training and system misuse are also responsible for additional fees paid to travel agents, said Marc Stec, president of the Society of Government Travel Professionals.

“People are supposed to use [DTS] to book their reservations, but usually the information is incomplete,” Stec said. Users often send e-mail requests for bookings, which require travel agents’ involvement. Incomplete and incorrect bookings are common, reducing the number of automatic transactions that DTS is supposed to facilitate.

Until users understand the system and are comfortable with it, travel agents will have a role and costs will remain high, Stec said.

Northrop Grumman’s six-year DTS contract expires at the end of fiscal 2006. According to the Government Accountability Office, DTS will have cost $474 million by that time, a cost overrun of more than $200 million compared with original projections. Northrop Grumman has received $264 million.

The company anticipates competition for the new contract, Fabbre said. But DOD has not issued a request for proposals, and analysts doubt that enough time remains to conduct a comprehensive bidding process. Coburn said DOD has already signaled its intention to grant Northrop Grumman a one-year, $20 million contract extension in September.

Northrop Grumman designed the software and wrote the source code for the system. Although DOD has unlimited rights to those products, another contractor would not likely be able to fix or modify Northrop Grumman’s code if awarded the new contract.

A House and Senate conference committee will debate DTS funding in coming weeks. The Senate’s amendment would also require DOD to report twice a year on DTS’ deployment, use and savings. The House version of the authorization bill does not include such provisions.

DTS computers can’t communicate

During last month’s Senate Armed Services Committee debate on the Defense Travel System, Sen. Tom Coburn (R-Okla.) criticized the Defense Department computer systems for preventing DTS from interacting with DOD’s non-DTS systems.

“The real problem is the computer systems at the Pentagon,” he said. “The reason [DTS] is so expensive [is because] the computer systems in the Pentagon do not talk to each other. We have designed a monstrous computer system to make it talk to all these systems that will not talk to one another, rather than fix the computer system in the Pentagon.”

McCoy Williams, director of the Government Accountability Office’s Financial Management and Assurance Team, echoed that sentiment in September 2005 during a hearing on DTS by the Homeland Security and Governmental Affairs Committee.

“One of DOD’s long-standing problems has been the lack of integrated systems,” Williams said. “To address this issue and minimize the manual entry of data, interfaces between existing systems must be developed to provide the exchange of data that is critical for day-to-day operations.”

— Josh Rogin

Where did the money go?

Improper payments, which include inadvertent, fraudulent and irresponsible payments, cost taxpayers at least $37 billion a year, according to the Senate Homeland Security and Governmental Affairs Committee’s Federal Financial Management, Government Information and International Security Subcommittee. That figure represents only 18 of 70 federal agencies that report such information under the Improper Payments Information Act of 2002.

Although the Defense Department does not report information related to travel payments, the Government Accountability Office determined that DOD bought 58,000 unused airline tickets in 2000 and 2001 at a cost of $21.1 million and improperly reimbursed travel 27,000 times in 2001 and 2002 at a cost of more than $8 million.

The Senate passed an amendment to the Defense Authorization bill that requires the department to:

  • Conduct assessments to determine whether travel expenses are at significant risk for improper payments and share the results with Congress.

  • Use a statistically valid method for determining whether travel expenses are at risk.

  • Demonstrate that the methodology takes all travel payments into account.

“Anyone who has kept up with the Department of Defense’s expenditure on travel knows that it is probable they are making significant improper payments,” said Sen. Tom Coburn (R-Okla.), the subcommittee’s chairman.

— Josh Rogin


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