Senator mulls cutting Pentagon’s $474 million travel system

The chairman of a Senate financial management subcommittee is considering an amendment that would block funding for the Defense Department's Web-based travel reservation system because of the way the contract with Northrop Grumman Corp. was negotiated.

Sen. Tom Coburn, R-Okla., believes that $40 million to $50 million could be saved by putting the Defense Travel System up for re-bidding. His spokesman, John Hart, said the decision to propose the amendment is not final. Coburn is chairman of the Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information and International Security.

"The Department of Defense and many of its contractors have wasted billions of taxpayer dollars over the years," said Hart. "So it would not be shocking to find another example."

Northrop Grumman DTS program manager Rich Fabbre said Coburn's office was given flawed data. "I think it's pretty easy to refute the dollar numbers," Fabbre said. "They just don't compute."

Fabbre said the information is similar to a report published last year by the government watchdog group Citizens Against Government Waste, that stated DTS was needlessly expensive and poorly managed. Experts in the travel industry told Government Executive that the information in the report was provided by Northrop Grumman's competitors. CAGW President Tom Schatz said the advocacy group relied on public information for the report.

"This amendment would cost the taxpayers a ton of money," Fabbre said. "The numbers are so far off, it's just mind-boggling." According to Fabbre, the Pentagon has paid Northrop Grumman $245 million since the beginning of the project.

According to the DTS program office, revamping the travel system would take a minimum of 18 months to two years and would require Defense personnel to use old systems for writing travel orders and processing vouchers. "The cost would be enormous," the travel office said in a statement, because the Pentagon generates about 5.6 million travel vouchers a year.

Hart said Coburn is considering holding hearings on DTS in September or October so all sides can be heard, and officials at the Government Accountability Office said they are working on a report evaluating the program.

Coburn's proposed amendment, which would be attached to the Defense Appropriations bill, is titled "Curtailment of Waste Under Department of Defense Web-Based Travel System," would prohibit the Pentagon from using funds for a Web-based travel system after Oct. 1, 2005. The amendment would allow for the Pentagon to acquire travel services through the General Services Administration's eTravel program as long as fixed payments are not used and that guarantees are made that flights are purchased at the lowest possible price.

All federal agencies, except the Defense Department, are required to obtain their travel services through GSA's eTravel program by Sept. 30, 2006. The eTravel program's future is uncertain because of a House amendment in the fiscal 2006 Transportation-Treasury appropriations bill (H.R. 3058) barring GSA from funding the program.

A Senate version of the bill does not contain the language. A full Senate vote on the measure is expected next month and potential differences in the bill will be ironed out in conference committee.

The DTS contract, which originated in May 1998, was renegotiated in 2002 with the Los Angeles-based military contractor Northrop Grumman from a fee-for-service pact. At the time, the military wanted more control over its travel system and it was more cost-effective for the Pentagon to pay a fixed price for the travel system. According to Northrop Grumman, an eTravel system would cost the Pentagon an additional $50 million a year once the system was fully deployed

The Pentagon does its own travel service contracting, which was recently held up by a GAO ruling sustaining a bid protest against the Pentagon's plans.

Under GSA's eTravel program, a system provider is selected along with a primary travel service provider. System providers for eTravel include Northrop Grumman, which is aligned with American Express Travel-Related Services Co. Inc.; Electronic Data Systems Corp. which partners with Navigant Sato Travel; and CW Government Travel Inc., which is aligned with Carlson Wagonlit Government Travel.

According to the DTS program office, GSA's eTravel program does not have the necessary structure to handle the department's needs, which include connecting to 30 Defense financial and data processing systems. DTS' expected savings are in automating the financial management processes, the military said, and a study by the Pentagon and GSA found that eTravel did not fulfill those needs.

DTS currently has portioned off a section of military travel for small business-only competition. The House voted to ax GSA's eTravel program after a group of small travel agencies claimed they were unable to obtain government contracts under eTravel.

Peggy Butler, senior contracting officer for DTS acquisitions' division at the Information Technology E-Commerce Commercial Contract Center, in an e-mail to small travel agency officials and obtained by Government Executive said: "If you have any influence on Capitol Hill, please use it. This bill cannot be passed."