DOE Management:

Opportunities for Saving Millions in Contractor Travel Costs

RCED-99-107: Published: Apr 1, 1999. Publicly Released: Apr 28, 1999.

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Gary L. Jones
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Pursuant to a congressional request, GAO provided information on the Department of Energy's (DOE) contractor travel costs, and DOE's efforts to reduce these costs, focusing on the: (1) travel costs incurred by DOE contractors and their primary destinations during fiscal years (FY) 1996 through 1998; (2) purpose of this travel; and (3) success that DOE has had in reducing contractor travel costs and additional actions available to reduce these costs further.

GAO noted that: (1) travel costs incurred by DOE contractors were reduced from $261 million in FY 1995 to $223 million in FY 1996; (2) since then, travel costs have increased--to $249 million by FY 1998--even though funding to the contractors during this period had been decreasing; (3) about 96 percent of the contractors' travel was to domestic locations, the most frequent of these being Washington, D.C. and the sites of DOE's major laboratories and test facilities: Albuquerque, New Mexico; Oakland/San Francisco, California; Las Vegas, Nevada; and Los Alamos, New Mexico; (4) the most frequent foreign destinations were Russia, the United Kingdom, Germany, France, and Japan; (5) the purpose of most travel was reported as being for business reasons, that is, travel for purposes related to the mission of the facilities; (6) this category included trips to attend meetings or perform research; (7) GAO identified trips that were miscategorized or were of questionable value to DOE; (8) for example, business trips included travel to obtain advanced degrees; (9) the second most frequently cited travel purpose was for attending conferences; (10) according to DOE's Inspector General, the large number of conference attendees is a concern; (11) the Inspector General identified hundreds of DOE contractor staff attending a 1997 conference in Vancouver, British Columbia, resulting in travel costs of about $1 million; (12) DOE's success in reducing contractor travel costs has been limited; (13) although contractor travel costs have increased since FY 1996, they have remained below the FY 1995 level--the level that DOE established as a baseline for calculating contractor travel cost savings; (14) only in FY 1996 did DOE attain the expected $30 million savings in contractor travel by achieving a $38 million reduction in that year; (15) contractors did not continue to achieve such savings because DOE did not enforce its cost reduction targets and some contractors did not have an overall strategy or plan to achieve lower travel costs; (16) DOE spends millions of dollars on travel and other costs for contractor employees on temporary or permanent assignment to Washington, D.C.; (17) DOE has reduced the number of contractor employees in Washington and is planning on further reductions; and (18) however, concerns exist over the additional compensation that contractors are providing for employees on long-term temporary assignments to cover the tax liabilities on their living allowances.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE is establishing a travel cost ceiling tied to the $150 million travel limit in the FY2000 Energy and Water Appropriation Act. As of September 1, 2001, specific targets under these ceilings have been conveyed to the contractors.

    Recommendation: To reduce contractor travel costs, consistent with DOE's cost-reduction targets for travel, the Secretary of Energy should set travel cost targets for each contractor and require that contractors not exceed these targets. The target amounts should be conveyed to both the contractors and DOE program areas for a combined commitment to ensure that the cost reductions are achieved.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: DOE is adding a clause to existing contracts mandating the use of federal per diem rates for travel.

    Recommendation: To implement more consistent travel cost reimbursement practices, the Secretary of Energy should establish clear DOE policy on allowable costs--both travel costs and the reimbursement of tax-related costs--and, when new contracts are let, incorporate the policy into contracts.

    Agency Affected: Department of Energy


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