Vendors challenge claim that eTravel cuts out small firms

The vendors for the General Services Administration's eTravel Service are contesting claims that an elite group of travel agencies will dominate the government travel booking business if the program is fully implemented.

Funding for GSA's eTravel program was blocked by the House in the 2006 Transportation-Treasury appropriations bill (H.R. 3058) because a group of congressmen believed that the program would prevent small travel agencies from doing business with the government. Under eTravel, every agency subject to the Federal Travel Regulation is required to choose a GSA pre-approved vendor.

The Senate Appropriations Committee is scheduled to take up the bill Tuesday afternoon.

The eTravel vendors argue, however, that canceling the project would cost the government millions of dollars and cost small travel agencies potential business opportunities. These vendors -- EDS, Northrop Grumman Corp. and CW Government Travel Inc. -- contend that eTravel will provide more business for small travel agencies in the long run.

Some travel agencies not directly associated with the eTravel vendors have also challenged the idea that they will be barred from doing business with agencies. They acknowledge that current opportunities are being lost, but by subcontracting with the eTravel vendors or getting on GSA's Travel Services Solutions Schedule contract, the potential for business with the government still exists.

Scott Guerrero, chief operating officer and executive vice president of CW Government Travel, said that several small travel agencies are subcontracting for CWGT's travel agency, including El Sol Travel, a Tempe, Ariz., small disadvantaged company that does $7 million in business with the Interior Department. Others are working directly with agencies through their TSS contract, Guerrero said.

A group of small business travel providers are providing key lawmakers a fact sheet, obtained by Government Executive, on eTravel and small business opportunities that states that the project "reverses a trend away from small business."

"Prior to [eTravel], federal agencies were trending toward single service providers," the document states. "[The eTravel system] provides greater federal government business opportunity for small and disadvantaged businesses."

Requirements of the eTravel program include rules for small business participation and a way for GSA to monitor compliance with its small business goals. Small business travel agents receive 62 to 85 percent of the money that is subcontracted and are expected to do $62.8 million in travel business in 2006 -- $18.3 million in direct business and $44.5 million through subcontracts, according to the fact sheet. This is an increase from $26.8 million in 2003.

Still, a group of small travel agencies remain opposed to the eTravel program because they believe it eliminates their chances at landing government contracts. Critics of eTravel say that set-asides, similar to those of the Defense Travel System, are needed to ensure small businesses are able to participate.

According to Chris McMillan, CEO of Bonner Travel Service in Jackson, Miss., small travel agencies subcontracting with agencies are often subcontracting for other subcontractors and have trouble getting business directly from agencies. McMillan's travel agency is on GSA's TSS Schedule, but to remain on the schedule, agencies are expected to do $25,000 in prime contracting with government agencies within the first two years. GSA says that failing to meet this goal does not automatically result in a company's removal from the schedule.

"You can get contracts, but that doesn't mean business," McMillan said.

McMillan and three other small travel agencies, including Alamo Travel Group in San Antonio, Texas, have lobbied to have the eTravel program funding cut.

Patricia Stout, who owns Alamo Travel, said that her company is signed up to subcontract with EDS, but has not received any business.

"They are subcontracting with one or two travel agencies exclusively," Stout said. "The opportunities have been very limited with small business."

Ann Hoskins, vice president of operations for the Charleston, W.Va., National Travel agency, said that they have been successful obtaining agency travel contracts under GSA's TSS Schedule contract. But the mandatory implementation of eTravel has changed the system within agencies which previously made provisions for local travel agencies spread around the country to provide travel needs to regional offices, Hoskins said.

"We have lost business because of the consolidation," Hoskins said. "There were multiple contractors serving various [Homeland Security Department] entities but because of the consolidation with eTravel it has cost us business."

Hoskins said that National Travel has pointed out to various agency officials that they are able to choose a provider other than the travel agency that comes along with their selected eTravel service provider, but agencies often choose to go with the embedded travel service provider.

Danielle Camesi, the National Business Center's eTravel migration manager, has been working with three travel agencies, including National Travel, to provide travel services to four independent federal agencies under NBC's eTravel contract with CWGT's eTravel program.

"It's not impossible for a small travel agency to do business with the government," Camesi said. "It may be a challenge, but I think anytime when you have a small travel agency doing business for a large federal entity, that's a challenge."