Defense Travel System:

Reported Savings Questionable and Implementation Challenges Remain

GAO-06-980: Published: Sep 26, 2006. Publicly Released: Sep 26, 2006.

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In 1995, the Department of Defense (DOD) began an effort to implement a standard departmentwide travel system. The Defense Travel System (DTS) is envisioned as DOD's standard end-to-end travel system. This report is a follow-up to GAO's January 2006, report which highlighted DTS implementation problems. Because of continued congressional interest in DTS, GAO initiated this follow-up audit under the Comptroller General's statutory authority. GAO determined whether (1) two key assumptions made in the September 2003 economic analysis were reasonable, (2) DOD is taking action to ensure full utilization of DTS and gathering the data needed to monitor DTS utilization, and (3) DOD has resolved the previously identified problems with DTS flight information. To address the above objectives, GAO (1) reviewed the September 2003 DTS economic analysis, (2) analyzed DTS utilization data, and (3) analyzed DTS flight information.

GAO's analysis of the September 2003 DTS economic analysis found that the two key assumptions used to estimate annual net savings were not based on reliable information. Two cost components represent the majority of the over $56 million in estimated net savings--personnel savings and reduced commercial travel office (CTO) fees. In regard to the personnel savings, GAO's analysis found that the $24.2 million of personnel savings related to the Air Force and the Navy was not supported. Air Force and Navy DTS program officials stated that they did not anticipate a reduction in the number of personnel, but rather the shifting of staff from the travel function to other functions. The Naval Cost Analysis Division stated that the Navy will not realize any tangible personnel cost savings from the implementation of DTS. In regard to the CTO fees, the economic analysis assumed that 70 percent of all DTS airline tickets would either require no intervention or minimal intervention from the CTOs, resulting in an estimated annual net savings of $31 million. However, the sole support provided by the DTS program office was an article in a trade industry publication. The article was not based on information related to DTS, but rather on the experience of one private sector company. Furthermore, the economic analysis was not prepared in accordance with guidance prescribed by OMB and DOD. DOD guidance stated that the life-cycle cost estimates should be verified by an independent party, but this did not occur. The economic analysis did not undertake an assessment of the effects of the uncertainty inherent in the estimates of benefits and costs. Because an economic analysis uses estimates and assumptions, it is critical that the imprecision in both the underlying data and assumptions be understood. Such an assessment is referred to as a sensitivity analysis. DOD acknowledged that DTS is not being used to the fullest extent possible, but lacks comprehensive data to effectively monitor its utilization. DOD's utilization data are based on a model that was developed in calendar year 2003. However, the model has not been completely updated to reflect actual DTS usage. The lack of accurate utilization data hinders management's ability to monitor progress toward the DOD vision of DTS as the standard travel system. GAO also found that the military services have initiated actions that are aimed at increasing the utilization of DTS. Finally, GAO found that DTS still has not addressed the underlying problems associated with weak requirement management and system testing. While DOD has acted to address concerns GAO previously raised, GAO found that DTS's requirements are still ambiguous and conflicting. For example, DTS displaying up to 25 flights for each inquiry is questionable because it is unclear whether this is a valid requirement. Until DOD improves DTS's requirement management practices, the department will not have reasonable assurance that DTS can provide the intended functionality.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In December 2009, DOD reported to the Congress that DTS is operational at over 9,500 locations worldwide and future deployments are planned for the Army Corps of Engineers, the Air Force Reserve Command, and the Navy Ship Afloat. Additionally, starting in the third quarter of fiscal year 2007 DOD began to report quarterly on the extent to which DTS is utilized across the military services and defense agencies. For example, in the DTS quarterly metrics reported for the second quarter of fiscal year 2010, the department reported that 87 percent of all travel reservations were processed through DTS in March 2010. In October 2009, the quarterly report noted that approximately 84 percent of all travel reservations were processed through DTS. Furthermore, the quarterly metrics reports are submitted to the Defense Travel Steering Committee and the Defense Travel Improvement Board. Also, in DOD's December 2009 congressional report the department reported on the status of its efforts to include special circumstance travel, military permanent duty travel, and recruit travel capabilities within DTS. Including the capability to facilitate support for these travel types within DTS should help to increase DTS usage throughout the department. In its May 2010 congressional report, the department reported on the status of its efforts to consolidate the existing 76 travel types into no more than 10. Consistent with the intent of the recommendation, the department's December 2009 congressional report and May 2010 congressional report provides reasonable assurance that DOD is obtaining and reporting data related to DTS utilization.

    Recommendation: To improve the DOD's management and oversight of DTS, which has been declared a DOD enterprise business system, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) and the Director, Business Transformation Agency, to jointly require the Program Management Office-DTS to provide a periodic report on the utilization of DTS to the Under Secretary of Defense (Personnel and Readiness) and the Director, Business Transformation Agency, once accurate data are available. The report should continue until the department has reasonable assurance that DTS is operating as intended at all 11,000 locations. The report should identify at a minimum (1) the number of defense locations at which DTS has been deployed, (2) the extent of DTS utilization at these sites, (3) steps taken or to be taken by the department to improve DTS utilization, and (4) any continuing problems in the implementation and utilization of DTS.

    Agency Affected: Department of Defense

  2. Status: Closed - Not Implemented

    Comments: DOD officials acknowledged that the department does not know the total number of manual travel vouchers that are processed by the Defense Finance and Accounting Service that should be processed through DTS. As a result, the department cannot ascertain the total universe of travel vouchers that are eligible to be processed through DTS or the savings that could be realized through electronic travel voucher processing. In June 2010, DOD officials informed us that the department has no plans to develop a method for determine the number of vouchers processed outside of DTS, that should have been processed through DTS.

    Recommendation: To improve DOD's management and oversight of DTS, which has been declared a DOD enterprise business system, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) and the Director, Business Transformation Agency, to jointly develop a process by which the military services develop and use quantitative data from DTS and their individual legacy systems to clearly identify the total universe of DTS-eligible transactions on a monthly basis. At a minimum, these data should be used to update the DTS Voucher Analysis Model to report DTS actual utilization rates.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: In September 2006, we found that DOD's economic analysis did not properly provide for considering the effects of components' use of management fees, rather than transaction fees, to compensate Commercial Travel Offices (CTO) for travel services provided. As a result, the estimated annual net savings related to CTO fees for the Navy would not be realized if the Navy continued to use the management fee concept. In addition, Navy Defense Travel System officials stated that they were considering continued use of management fees to compensate CTOs. We recommended that the Secretary of Defense direct the Under Secretary of Defense (Personnel and Readiness) and the Director, Business Transformation Agency, to jointly evaluate the cost effectiveness of the Navy continuing with the CTO management fee structure, instead of adopting the revised CTO fee structure, after new CTO contracts were awarded. We reported in June 2009, that the Defense Travel Management Office (DTMO) was requiring an examination of fee structure cost effectiveness as part of every Navy CTO contract renegotiation. Eight of the 11 CTO contract renegotiations, which included examination of fee structure proposals, were completed by the end of 2009. With these actions, DOD has taken action to substantively address our recommendation and therefore should better enable the Navy to establish a cost-effective fee structure for CTO services.

    Recommendation: To improve the Department of Defense's (DOD) management and oversight of DTS, which has been declared a DOD enterprise business system, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) and the Director, Business Transformation Agency, to jointly evaluate the cost effectiveness of the Navy continuing with the CTO management fee structure versus adopting the revised CTO fee structure, once the new contracts have been awarded.

    Agency Affected: Department of Defense

  4. Status: Closed - Not Implemented

    Comments: In June 2010, Defense Travel Management Office officials stated that the department will not be making any further enhancements or changes in DTS's current functionality or displays. In this regard, DOD and the DTS governance board determined that DTS has reached its Full Operational Capability, and based in part on the age of the system software, that no additional enhancements are cost-effective. As such, only changes to maintain the stability of the current system will be authorized.

    Recommendation: To improve DOD's management and oversight of DTS, which has been declared a DOD enterprise business system, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) and the Director, Business Transformation Agency, to jointly resolve inconsistencies in DTS requirements, such as the 25 flight display, by properly defining the (1) functionality needed and (2) business rules necessary to properly implement the needed functionality.

    Agency Affected: Department of Defense

 

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