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32–354 PDF 2007

S. Hrg. 109–246

THE DEFENSE TRAVEL SYSTEM: BOON OR

BOONDOGGLE? (PART 2)

HEARING

BEFORE THE

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

NOVEMBER 16, 2006

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

MICHAEL L. ALEXANDER, Minority Staff Director 

TRINA DRIESSNACK TYRER, Chief Clerk 

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS 

NORM COLEMAN, Minnesota, Chairman 

TED STEVENS, Alaska 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

RAYMOND V. SHEPHERD, III, Staff Director and Chief Counsel 

C. JAY JENNINGS, Senior Investigator 

ELISE J. BEAN, Staff Director and Chief Counsel to the Minority 

MARY D. ROBERTSON, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Coleman .............................................................................................. 1

Senator Coburn ................................................................................................. 4

Senator Levin .................................................................................................... 5

Senator Carper ................................................................................................. 6

WITNESSES 

THURSDAY, NOVEMBER 16, 2006

Thomas F. Gimble, Acting Inspector General, U.S. Department of Defense ...... 8

McCoy Williams, Director, Financial Management and Assurance Team, Government Accountability Office ............................................................................. 9

Hon. David S.C. Chu, Ph.D., Under Secretary for Personnel and Readiness, 

U.S. Department of Defense ................................................................................ 16

ALPHABETICAL LIST OF WITNESSES

Chu, Hon. David S.C., Ph.D.: 

Testimony .......................................................................................................... 16

Prepared statement .......................................................................................... 61

Gimble, Thomas F.: 

Testimony .......................................................................................................... 8

Prepared statement .......................................................................................... 29

Williams, McCoy: 

Testimony .......................................................................................................... 9

Prepared statement .......................................................................................... 36

EXHIBITS 

1. Letter from the Permanent Subcommittee on Investigations to Department of Defense Secretary Donald H. Rumsfled, dated August 11, 2005, 

regarding the Defense Travel System ............................................................. 65

2. Letter from the Permanent Subcommittee on Investigations to U.S. Government Accountability Office Comptroller General David M. Walker, 

dated August 11, 2005, regarding the Defense Travel System ..................... 69

3. Letter from the Permanent Subcommittee on Investigations to Department of Defense Inspector General Joseph E. Schmitz, dated August 

11, 2005, regarding the Defense Travel System ............................................ 71

4. U.S. Government Accountability Office (GAO) Report to Congressional 

Addresses, DEFENSE TRAVEL SYSTEM—Reported Savings Questionable and Implementation Challenges Remain, September 2006, GAO–

06–980 ................................................................................................................ 730

5. Letters from Department of Defense Assistant Inspector General John 

R. Crane, Communications and Congressional Liaison, to the Permanent 

Subcommittee on Investigations, dated May 11 and August 24, 2006, 

regarding analysis of the Defense Travel System .......................................... 120

6. Report of the Office of Inspector General, U.S. Department of Defense, 

Information Technology Management—Management and Use of the Defense Travel System, (D–2007–024), November 13, 2006 .............................. 122

7. DTS Trip Usage At 42 DOD Locations (Jan-Sept 2006), chart prepared 

by the Permanent Subcommittee on Investigations, Majority Staff .............. 178

8. DTS Trip Usage At Selected DOD Locations (Jan-Sept 2006), chart prepared by the Permanent Subcommittee on Investigations, Majority Staff .... 179

Page

IV

9. Responses to supplemental questions for the record submitted to Thomas 

F. Gimble, Acting Inspector General, U.S. Department of Defense ............. 182

10. Responses to supplemental questions for the record submitted to McCoy 

Williams, Director, Financial Management and Assurance, U.S. Government Accountability Office ............................................................................... 184

11. Responses to supplemental questions for the record submitted to David 

S.C. Chu, Ph.D., Under Secretary for Personnel and Readiness, U.S. 

Department of Defense ..................................................................................... 187

(1)

THE DEFENSE TRAVEL SYSTEM: BOON OR 

BOONDOGGLE? (PART 2) 

THURSDAY, NOVEMBER 16, 2006

U.S. SENATE, PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Subcommittee met, pursuant to notice, at 10 a.m., in room 

342, Dirksen Senate Office Building, Hon. Norm Coleman, Chairman of the Subcommittee, presiding. 

Present: Senators Coleman, Coburn, Levin, and Carper. 

Staff Present: Raymond V. Shepherd, III, Staff Director and 

Chief Counsel; Mary D. Robertson, Chief Clerk; Mark L. Greenblatt 

and Steven A. Groves, Senior Counsels; C. Jay Jennings, Senior Investigator; Cindy Barnes, Detailee, GAO; Joanna Ip Durie, 

Detailee, ICE; Emily Germain, Intern; Amy Hall (Collins); Martin 

Updike (Coburn); Peter Levine (Levin); John Kilvington (Carper); 

and Joel Rubin (Lautenberg). 

OPENING STATEMENT OF SENATOR COLEMAN 

Senator COLEMAN. This hearing of the Permanent Subcommittee 

on Investigations is called to order. Good morning and thank you 

for attending today’s hearing. 

This hearing is part of the Subcommittee’s 2-year investigation 

into various problems associated with the Defense Trouble System, 

commonly called DTS. DTS is the Defense Department’s program 

designed to arrange and process travel for all DOD employees. 

Over the past 8 years, the Defense Department has spent roughly half a billion dollars of taxpayers’ money to develop the system. 

For that huge investment, DTS was supposed to generate cost savings of more than $65 million every year and integrate the Department’s travel planning system. 

The Subcommittee’s investigation has revealed that despite these 

lofty goals and the massive investment of taxpayer money, DTS 

does not perform its central purpose, booking travel in an effective 

manner. I want the Department of Defense to have the best travel 

system in the world, because travel is absolutely essential for the 

effective performance of DOD’s mission. For half a billion dollars, 

DOD ought to have precisely that. 

As a result, I expect to propose a major revision to the Defense 

Department’s travel procedures to make them more effective and 

less wasteful and start down the path of getting DOD a travel system that actually works. 

2

1See Exhibit 1 which appears in the Appendix on page 65. 

2See Exhibit 7 which appears in the Appendix on page 178. 

3See Exhibit 8 which appears in the Appendix on page 179. 

But first let us explore some of the problems with DTS that this 

Subcommittee has uncovered. More than a year ago I directed the 

Subcommittee to investigate whether DTS is a boon to the Defense 

Department or a boondoggle at the expense of the American taxpayer. On August 11 of last year I wrote Secretary Rumsfeld to request that he suspend further implementation of DTS until certain 

serious problems were addressed.1

Those issues were the focus of a Subcommittee hearing in September 2005. In that hearing, this Subcommittee established several important problems associated with DTS. The development of 

DTS was 4 years behind schedule. DTS was deployed in barely half 

of the 11,000 DOD travel sites. DTS had grown in cost from $273 

million to almost $500 million. Despite that massive investment, 

DTS did not list all available flights and did not always identify 

the lowest possible airfares. To make matters worse, DTS did not 

identify all available lodging facilities that offer government rates. 

All of these problems boil down to two fundamental questions. 

One of those questions is whether DTS, which purportedly saves 

$56 million each year, actually saves the taxpayers any money. The 

next essential question is whether DTS is the best, most cost-effective travel system for the Department of Defense. 

In order to get answers to these vital questions, I asked the GAO 

to determine whether DTS’s purported cost savings were justified. 

I also asked the Inspector General of the Defense Department to 

determine whether the cost and benefits of DTS established that 

DTS was the best travel system for the Department of Defense. 

Today we hear from GAO and the Defense Department Inspector 

General and we are getting answers to those questions. In short, 

the evidence is in and it confirms the disappointing truth: DTS 

does not work as advertised. 

Here is a thumbnail sketch of the results of the investigations by 

the GAO, the Inspector General and this Subcommittee: GAO concluded that the projected cost savings for DTS are questionable and 

cannot be justified. For instance, GAO found that $31 million of the 

estimated $56.4 million in estimated savings were based on a single article in a trade industry magazine. According to the Inspector 

General, the Defense Department does not know and cannot determine whether DTS is the best travel system to serve its mission 

needs. This Subcommittee has discovered that travel agents who 

work with DTS on a daily basis uniformly agree that the system 

is inefficient, incomplete and costly. 

One additional fact reveals just how unpopular DTS is with DOD 

personnel. The Subcommittee has discovered that more than 83 

percent of DOD personnel who are supposed to use DTS are actually using travel agents to arrange their travel. As reflected in Exhibit 7,2 which is off to my left, the Subcommittee found that of the 

roughly 755,000 trips undertaken at 42 DOD locations from January through September of this year, only 17 percent were arranged 

using DTS. 

Let us turn to Exhibit 8,3 which lists some examples where DOD 

personnel are primarily relying on travel agents. For instance, 

3

DOD personnel at Fort Leavenworth booked more than 22,000 

trips from January through September of this year and 99.9 percent used travel agents. Only one-tenth of 1 percent at that location used DTS to plan their travel. 

DOD personnel at another facility used DTS for a mere eighttenths of 1 percent of their trips. Likewise, DOD personnel at Fort 

Shafter booked 26,425 trips and 98.3 percent of those trips were arranged using travel agents rather than DTS. My math, I think it 

is calculated up there for me, that means 1.7 percent were arranged using this $500 million system. 

Even the Pentagon, whose employees took more than 50,000 

trips so far this year, have used DTS less than 20 percent of the 

time. 

These facts are disappointing. I am appalled that the Defense 

Department has spent over half a billion dollars to develop a system that does not work as required, that does not save money as 

we were led to believe, that is not being used uniformly by DOD 

personnel, and that DOD has not even kept records to determine 

whether it is the best system for its needs. 

All this has led me to one simple conclusion: The travel component to DTS is a failure and a waste of taxpayers’ money. Moreover, I have concluded that further efforts to resolve DTS will only 

lead to a further waste of taxpayer dollars. The answer is not to 

continue throwing money at the problem. 

DOD now has the opportunity to pull the plug on DTS and I recommend they take it. Because of DTS’s widespread concerns, Congress recently barred DOD from funding further implementation of 

DTS. Instead, Congress has required DOD to conduct an independent study of DTS to determine, among other things, whether 

DTS travel and accounting functions can be separated. I believe the 

study provides the Secretary of Defense with the opportunity to 

graciously opt out of DTS’s travel functions, and I strongly suggest 

he take advantage of that opportunity. Such a step will permit 

DOD to take advantage of the aspects of DTS that work, and they 

do work, and that is the accounting components, and scrap the elements that do not work. And that is namely the travel functions. 

It is important to understand the fallacy of the cost savings that 

DOD proposed to generate by reducing travel agent services. DTS’s 

projected cost savings are, in fact, based on a false premise: That 

you can generate savings by transferring the responsibility to select 

flights, hotels, and rental cars from professional travel agents to 

DOD travelers and pay the travel agents a lower fee. This would 

be the same as directing all DOD personnel to speak Arabic in 

order to save money on translation services. DOD is claiming the 

savings from reduced travel agent fees without considering the cost 

of having the troops do the work. 

According to numerous travel agents interviewed by the Subcommittee, they can do the work faster and at less cost. In fact, one 

travel agent said, ‘‘DTS is not cost effective because a travel agent 

can make all reservations in about 5 minutes where it takes DOD 

personnel 30 minutes or more to perform the same function.’’ The 

time DOD personnel spend making travel reservations could be far 

better spent on their mission-related responsibilities. 

4

The commercial travel systems that travel agents use to book 

reservations are far superior to DTS because they have complete 

flight, hotel, and rental car information. DTS does not. Travel 

agents can book rail reservations. DTS cannot. Travel agents can 

make reservations in commercial travel systems that actually book 

the flight and make the hotel reservations. DTS cannot. 

One travel agent summed up this problem as follows: ‘‘The system does not work. It is not a live system that actually books 

flights or reserve hotel rooms or rental cars. That work is performed by a travel agent.’’ It is time to stop wasting the taxpayers’ 

money and find a solution that actually works. 

To that end, I am preparing legislation and working with my colleague, Senator Coburn, who has really been a champion in rooting 

out inefficiency, incompetence, corruption, and fraud in government 

and had really highlighted this issue long before many others. 

I hope to introduce that legislation in the near future in order 

to end the part of DTS that does not work, the travel planning 

component, and keep the part that does work, the accounting component. At the very least, that will begin the process of getting 

DOD the best travel service to meet its needs. 

As I said before, I look forward to working with my colleague, 

Senator Coburn, and Ranking Member, Senator Levin, on this proposal as they have very serious interest in this issue. 

Today we will hear testimony from representatives of the General Accountability Office and the DOD Inspector General, who will 

testify about their most recent findings as well as the reports they 

wrote that questioned the costs and benefits that DTS offers DOD. 

Finally, we will hear from Undersecretary David Chu, who is the 

official responsible for DTS. 

With that, I recognize my colleague from Oklahoma. 

OPENING STATEMENT OF SENATOR COBURN 

Senator COBURN. Let me thank you, Mr. Chairman, a great deal 

for having this hearing. 

DTS is a symptom. This whole contract is a symptom of what is 

wrong in our government today. It is not that the parties do not 

intend and mean well. There is no sleight of hand. But what there 

is is a lack of standards of both behavior and expectation that is 

totally different than in private industry. 

The problems I see is we have a never ending contract. In the 

private sector, if we buy software, we buy software and get a quote, 

we get a bid, and the vendor is expected to come in and pay for 

it and do it. 

We have seen totally the opposite of that with this contracting 

process. This is not the supplier’s fault, but there are tremendous 

problems in procurement in the Pentagon and in other areas across 

the government. And this is a symptom of it. 

I want to reflect no malice on anyone in this process other than 

to say, with the significant problems that are in front of us as a 

Nation, we cannot continue to do business this way. 

My hope is that this can become the poster child of how not to 

do something. There are certain components of this that work very 

well, especially the financial. The one thing that nobody considered 

in this whole program is because the Pentagon’s computers and the 

5

military and the whole Defense Department do not talk to one another, that made this a very difficult problem. There is no question 

about it. 

But what nobody has answered is in the 6 or 8 years from now, 

when they will talk to one another, we do not need this. We are 

not going to need it because we have a program now that takes 

care of all of those other problems from an accounting standpoint 

but does not do what the private sector and other areas can do in 

terms of travel. 

So I am very thankful that we are here. I think we ought to use 

this as an object lesson, how to change contracting, how to increase 

accountability and tremendously increase transparency in our government. 

I look forward to working with both the Chairman and the new 

Chairman and the future Congresses to change how we contract. 

As a physician, we look at symptoms of disease. This is a symptom of a disease in contracting in the Federal Government that has 

got to change. We cannot afford to do business this way and I am 

very thankful that we are having this hearing. Thank you. 

Senator COLEMAN. Thank you, Senator Coburn. I will now turn 

to my Ranking Member, Senator Levin. 

OPENING STATEMENT OF SENATOR LEVIN 

Senator LEVIN. Thank you very much, Mr. Chairman. 

Thank you for convening this important hearing and for the oversight that you have provided in the very critical area of Department of Defense operations. Every year the Department of Defense spends roughly $20 billion 

to develop new information systems and to operate and maintain 

existing information systems. Like so many other Department of 

Defense programs, the Department’s information technology programs are troubled by cost overruns, schedule delays, and performance deficiencies. 

The Defense Trouble System, DTS, is no exception. When DTS 

was first conceived in the mid-1990s, the Department of Defense 

travel system was a complete mess. Individual components of the 

Department entered their own arrangements with different travel 

companies, each of which had its own process systems and procedures. The travel process was paper intensive with written travel 

orders required before the trip and written requests for reimbursement filed at the end of the trip. 

The travel reservation and booking process was separate from 

the voucher and payment process, which was itself separate from 

the financial accounting process. Management controls were lacking. Financial records were inaccurate and incomplete. 

DTS was supposed to address all of these problems by establishing a single end-to-end travel system based on commercial technology. Unfortunately, as in so many other cases, Department of 

Defense tried to do the job on the cheap without conducting adequate planning as required by the Clinger-Cohen Act and other applicable statutory requirements. 

As a result, more than 7 years after the initial DTS contract was 

awarded, the system still has not been consistently implemented 

throughout the Department. And as a result, the Department curVerDate 0ct 09 2002 10:09 Apr 23, 2007 Jkt 032354 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\32354.TXT SAFFAIRS PsN: PAT
6

rently bears the burden for paying for both DTS and on the legacy 

systems that it is designed to replace. 

This is all too typical of the Department of Defense business system development programs. DTS appears to be deficient in meeting 

user requirements by providing the appropriate lowest-cost fares 

for government travelers. 

The Department of Defense says that these problems can be 

fixed, but we do not know how much those fixes will cost or how 

effective they will be or when they will be accomplished. 

For this reason, Section 943 of the John Warner National Defense Authorization Act for fiscal year 2007 requires the Secretary 

of Defense to conduct an independent study to determine the most 

cost-effective method of meeting the Department’s future travel requirements. The Department is prohibited from entering a new 

contract or expending funds for DTS until after this report has 

been completed and submitted to Congress. 

The reason this language is there is because of the initiative of 

Senator Coburn, who offered an amendment, which was even somewhat stronger if I may say on the floor. We worked out language 

in conference which I believe and hope was satisfactory to Senator 

Coburn because it does now drive what we are trying to accomplish 

here. I again commend him for his tenacity in this regard. 

I do not know whether the Department of Defense should pursue 

DTS to completion at this point, or whether we would be better off 

scrapping DTS and starting over from the beginning. I do not know 

whether DTS would be more cost effective if its use is mandated 

across the Department. I do not know whether the successful elements of DTS, such as the vouchering and financial systems, can 

be separated from the more problematic travel reservation system. 

It is my hope, however, that the independent review mandated 

by Section 943 will provide the answers to these questions. 

Again, Mr. Chairman, I thank you for your initiative in this area, 

as so many other areas, and I look forward to the testimony of our 

witnesses. 

Senator COLEMAN. Thank you, Senator Levin. Senator Carper. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. Just very briefly. 

I want to preface my remarks by simply saying to the Chairman, 

Senator Coleman, to Senator Levin, to Senator Coburn, a real special thank you for participating as faculty members in the orientation this week of our new senators and their spouses, and to not 

only give them a good welcome but also to try to help them learn 

from our mistakes that we have made in our first years here, including our current experience here. 

I shared with the new senators at our orientation breakfast this 

morning that one of the core values in my own office to focus on 

excellence in everything that we do because everything that we can 

do we can do better. I also like to say to my staff, if it is not perfect, make it better. 

That is an understatement when it comes to this Defense Travel 

System. What started off as a very good idea in 1994, one that was 

going to cost about $250 million, is now sort of morphed into a system that has been deployed in about half the sites it was supposed 

7

to have been deployed to. The cost may now be roughly twice what 

it was supposed to be. And not too many people I have talked to 

are pleased with the product and the service that it provides. 

God knows, we can do better than this. We have a role in the 

Legislative Branch, not a role we have always met well in recent 

years, to provide good oversight not just to be critical for the sake 

of being critical but to hold people’s feet to the fire to make sure 

that we actually do provide a better product, better service for the 

taxpayers and for those that are, in this case, going to be able to 

travel someplace and save money, get where they need to go and 

do so at a reasonable cost to our taxpayers. 

Senator Coburn and I have looked at this issue in the Subcommittee, that we have been privileged to lead in the last few 

years. I am delighted that you are holding this oversight hearing 

today to look for some further progress and to answer some of the 

questions that Senator Levin just mentioned, that we do not know, 

we do not know, we do not know. We need to know. And frankly 

the President needs to know, and whoever is going to lead the Department of Defense needs to know, as well, so we can make some 

tough decisions. 

Thank you, Mr. Chairman. 

Senator COLEMAN. Thank you, Senator Carper. 

I would now like to welcome our first panel of witnesses for today’s hearing. Thomas Gimble, the Acting Inspector General at the 

Department of Defense; McCoy Williams, Director of Government 

Accountability Office’s Financial Management and Assurance 

Team. 

Both of you gentlemen were witnesses at our September 2005 

hearing on this matter. I welcome you back and look forward to 

your testimony here on your latest perspective on the Defense 

Travel System. 

As you know, DTS was largely justified on the cost savings it 

would realize. And that is why I asked the Comptroller General to 

determine if the cost savings were substantiated. 

Further, as we pointed out in the Office of Program Analysis and 

Evaluation study, a cost-benefit analysis is required to determine 

if DTS meets DOD’s travel needs. That is why I asked the Department of Defense IG to perform such an analysis and I look forward 

to hearing the results of your reviews, in part, Senator Levin, to 

get answers to the questions that you raise. I think one of the frustrations, at least, is my review of the primary testimony is that we 

are not in a position to answer those questions, even after spending 

$500 million, which is obviously very frustrating. 

Pursuant to Rule 6, all witnesses who testify before this Subcommittee are required to be sworn. I would ask you please to both 

stand and raise your right hand. 

Do you swear the testimony you are about to give before the Subcommittee is the truth, the whole truth, and nothing but the truth, 

so help you, God? 

Mr. GIMBLE. I do. 

Mr. WILLIAMS. I do. 

Senator COLEMAN. Gentleman, I think you are familiar with the 

timing system. When the light turns to amber, you have about a 

8

1The prepared statement of Mr. Gimble appears in the Appendix on page 29. 

minute to sum up. Your entire testimony will be printed into the 

record in its entirety. 

We will start with Mr. Gimble first and he will be followed by 

Mr. Williams. 

Mr. Gimble, you may proceed. 

TESTIMONY OF THOMAS F. GIMBLE,1 ACTING INSPECTOR 

GENERAL, U.S. DEPARTMENT OF DEFENSE 

Mr. GIMBLE. Mr. Chairman, Members of the Permanent Subcommittee on Investigation, thank you for the opportunity to appear before the Subcommittee today to discuss our most recent 

audit report ‘‘Management and Use of the Defense Travel System,’’ 

(DTS). 

As you know, the Subcommittee asked my office to conduct an 

independent cost-benefit evaluation of DTS. The Department, however, was unable to provide supporting documentation to substantiate all DTS and legacy system cost data. Therefore, it is not possible for us to determine whether DTS is the most cost-effective 

way to meet the Department’s travel management needs or even to 

fully quantify the cost savings that might be realized by using 

DTS. 

The Department envisioned DTS as a 21st Century model of efficiency and service, featuring the best practices in industry. The 

Program Management Office planned for DTS to support all forms 

of business travel. In addition, the Program Management Office designed DTS to interface with DOD accounting and disbursing systems. The expected DTS program costs were estimated at over $2 

billion for the 20-year life cycle of the program. 

Problems with documentation supporting DOD travel costs existed before DTS and continue to exist. The Task Force to Reengineer Travel concluded in its January 1995 report that it could not 

easily identify all costs involved in the temporary duty travel process and that costs of administering travel were also unquantifiable. 

In response to our July 2002 audit report, the Director, Program 

Analysis and Evaluation, conducted a cost-effectiveness study and 

issued a report on December 17, 2002, concluding that the Department did not capture travel costs necessary to validate program 

savings or determine whether DTS was the most cost-effective system to support DOD travel. 

More recently, the Principal Deputy Director, Program Analysis 

and Evaluation, wrote in a memorandum that the Department 

needed more reliable data after reviewing the 2003 DTS economic 

analysis. 

These undertakings, in addition to our inability to validate current DTS and other travel-related cost data, represent a fundamental flaw in the Department’s reporting process. However, the 

flaw is not specific to DTS. It is a department-wide failure to collect 

and retain travel-related cost data that are auditable. 

Our report recommends that the Under Secretary of Defense 

(Comptroller) and the Under Secretary of Defense for Personnel 

and Readiness coordinate with the Department comptrollers to develop a formal reporting process, maintain detailed records of all 

9

1The prepared statement of Mr. Williams appears in the Appendix on page 36. 

DTS and legacy system travel costs, and establish a viable process 

for measuring whether using DTS has enabled DOD to achieve projected benefits cited during the Milestone C decision. 

The report also recommends that if DTS is to continue being 

used after the study required by Section 943 of Public Law 109–

364 is completed, the Under Secretary of Defense for Personnel and 

Readiness must develop, in coordination with the Director of the 

Business Transformation Agency, the Services, and Defense Agencies, a travel management strategy that includes a plan for effectively implementing DTS at all remaining sites and a single methodology for consistently monitoring compliance with the Department policy. 

The report also recommends that the Under Secretary of Defense 

for Personnel and Readiness establish a plan addressing short-term 

and long-term goals to achieve 100 percent use of DTS for routine 

temporary travel. 

Further recommendations include: That the Director, Defense Finance and Accounting Service implement a process to ensure 

voucher payments recorded in the disbursing systems can be reconciled to the voucher payment data in the e-Biz accounting system; and that upon completion of the DTS study, if it is decided 

that DTS should continue, the Program Director, DTS Program 

Management Office institute an effective and timely process for addressing system change requests to improve the Department’s ability to use the system. 

This concludes my oral statement. I would be happy to answer 

any questions that the Subcommittee may have. 

Senator COLEMAN. Thank you, Mr. Gimble. Mr. Williams. 

TESTIMONY OF McCOY WILLIAMS,1 DIRECTOR, FINANCIAL 

MANAGEMENT AND ASSURANCE TEAM, U.S. GOVERNMENT 

ACCOUNTABILITY OFFICE (GAO) 

Mr. WILLIAMS. Thank you, Mr. Chairman. Mr. Chairman and 

Members of the Subcommittee, I am pleased to be here today to 

discuss our recent report related to problems encountered by the 

Department of Defense in successfully implementing the Defense 

Travel System. 

My testimony is based on our September 2006 report which followed up on our September 2005 testimony and January 2006 report. 

Today I will highlight our key findings related to the September 

2003 economic analysis, data needed to monitor DTS utilization, 

and systems requirements and testing. 

I will also discuss our recommendations to improve Department’s 

management and oversight of DTS. 

First, Mr. Chairman, our analysis of the September 2003 DTS 

economic analysis found that the two key assumptions used to estimate cost savings were not based on reliable information. Two primary areas, personnel savings and reduced CTO fees, represented 

the majority of the over $56 million of estimated annual net savings DTS was expected to realize. 

10

With regard to personnel savings, Air Force and Navy DTS program officials stated that they did not anticipate a reduction in the 

number of personnel with the full implementation of DTS, but 

rather the shifting of staff to other functions. According to DOD officials responsible for reviewing the economic analysis, while shifting personnel to other functions is considered a benefit, it should 

not be considered a real dollar savings since the shift in the personnel does not result in a reduction of DOD expenditures. 

DOD strongly objected to our finding that the personnel savings 

are unrealistic, however, because none of the military services 

could validate an actual reduction in the number of personnel as 

a result of DTS implementation and DOD’s comments did not include any additional support or documentation for its position, we 

continue to believe that the estimated annual personnel savings of 

$54.1 million is unrealistic. 

Mr. Chairman, in regards to the estimated annual savings of $31 

million attributed to the lower CTO fees, DOD assumed that 70 

percent of all airline tickets would be considered no touch, meaning 

that there would be no or minimal intervention by the CTO, thereby resulting in lower CTO fees. However, DTS program officials 

could not provide any data to support the assumption. We found 

that the 70 percent assumption was based solely on an American 

Express newsletter article that referred to the experience of one 

private sector company completely unrelated to DTS. 

Second, Mr. Chairman, our analysis found that the Department 

did not have quantitative metrics to measure the extent to which 

DTS is actually being used. The reported DTS utilization rates 

were based on estimated data and DTS program officials acknowledged that the model had not been completely updated with actual 

data as DTS continued to be implemented at the planned 11,000 

sites. As a result, DTS officials continue to rely on outdated information in calculating DTS utilization rates. 

Third, Mr. Chairman, DOD still has not addressed problems associated with weak requirements management and system testing. 

Mr. Chairman, requirements represent the blueprint that system 

developers and program managers used to design, develop, test, 

and implement a system. We identified 246 unique GSA city pair 

flights that should have been identified in one or more DTS flight 

displays according to DOD requirements. However, 87 of these 

flights did not appear on one or more of the required listings. 

Mr. Chairman, while DOD has taken actions to address our concerns, these actions do not fully address the fundamental problems 

we have found during this audit and on which we have previously 

reported. For example, the DTS requirements we reviewed were 

still ambiguous and conflicting. 

Finally, Mr. Chairman, our recent report included several recommendations to improve the Department’s management and oversight of DTS. For example, we recommended that DOD improve its 

methodology for developing quantitative data on DTS usage and resolve inconsistencies and DTS requirements. Effective implementation of these recommendations, as well as those included in our 

January 2006 report, will go a long way towards improving DTS 

functionality and increasing utilization. 

11

In closing, management oversight, as well as continued Congressional scrutiny, such as this hearing, will be important factors in 

achieving DTS’s intended goals. Equally important, however, will 

be the Department’s ability to resolve the long-standing difficulties 

that DTS has encountered with its requirements management and 

system testing. Until these issues are resolved, more complete utilization of DTS will be problematic. 

Mr. Chairman, this concludes my statement. I would be pleased 

to respond to any questions. 

Senator COLEMAN. Thank you, Mr. Williams. 

Mr. Gimble, it would be fair to say both gentlemen indicated that 

one of the problems we have here is we do not have the data to 

justify the so-called cost savings? Is that a fair statement? 

Mr. GIMBLE. That is a fair statement. 

Senator COLEMAN. Mr. Williams, you indicate that—we all agree 

that we need a better system. There is no argument about that. 

The question that I am struggling with is after spending almost 

$500 million, we still do not have data. The cost savings that have 

been laid out are clearly not justified by whatever data is there. 

And so the question becomes do we keep pouring money into this 

with the hope that once we get the data that we can somehow figure out whether it is worthwhile? 

It is the money pit. At what point do we stop throwing money 

into this? 

Just to go back as to where we have been, Mr. Williams, you 

found—and I am a little stunned by this. I think your testimony 

was that more than $30 million in projected cost savings were 

based on an American Express magazine article. Is that what is in 

your testimony? 

Mr. WILLIAMS. That is correct. Basically the magazine article referred to savings that could be achieved if a particular package was 

procured. There was no relationship to DTS and it basically stated, 

to be more specific, that savings could be realized up to 70 percent. 

But 70 percent was used in the assumption for calculating DTS’s 

estimated annual savings. 

Senator COLEMAN. Perhaps I am missing something here, but is 

this standard practice for establishing cost savings? 

Mr. WILLIAMS. As we stated in the report, the information was 

not validated. There are requirements from OMB, as well as from 

DOD, that when you are putting together information on cost benefits that one of the things that you definitely need to have is good 

information. That information also needs to be validated and, in 

the case of this particular assumption, it was not validated. We 

also stated in the report that if those procedures or policies had 

been followed, that this would have come to light, that this was not 

a valid assumptions that DOD used to come up with this calculation. 

Senator COLEMAN. One of the other instances of measuring cost 

savings that the report highlights is that the DOD would be achieving savings because personnel would be assigned to other duties. 

Can you comment on that process for estimating savings? 

Mr. WILLIAMS. Basically, in the response to our report DOD disagreed when we pointed out that the personnel savings were unrealistic. The point comes down to when you move employees from 

12

1See Exhibit 3 which appears in the Appendix on page 71. 

the travel operation to another operation, are you really achieving 

tangible savings as far as what you are trying to compare for that 

particular system. 

We recognize that there are some savings when you are able to 

move people to another operation within the Department. But, 

when you get to the bottom line, as we stated in the report and 

in our testimony, DOD’s overall costs have not been reduced. So 

while there were some tangible savings, there were no personnel 

tangible amounts that we believe should be used in calculating 

DTS’s savings. 

Senator COLEMAN. Mr. Gimble, going back with a little history, 

did you do a report in 2002 on DTS? 

Mr. GIMBLE. Yes. 

Senator COLEMAN. Was there a 2002 report? 

Mr. GIMBLE. There is a 2002 report, yes, sir. 

Senator COLEMAN. I believe in that, the report recommended 

that the Office of Program Analysis and Evaluation complete a 

study as to whether DTS should continue or be terminated. 

Mr. GIMBLE. It was to determine the cost-effectiveness of the program. 

Senator COLEMAN. Right. And I think it was the Office of Program Analysis and Evaluation, and that there was an understanding that a decision would be made to continue or terminate 

the program based on the study findings. 

As I understand it, the P&A study was supposed to look at the 

costs and savings. I think we are still at the same point. My understanding is that the Program Analysis and Evaluation study found 

that it lacked the data needed to perform a cost-effectiveness study. 

Did they recommend some other alternatives travel solutions? 

What was the recommendation that came out of that? 

Mr. GIMBLE. The report was issued on December 17, 2002 and 

it basically said that they did not have the data necessary to make 

a determination that DTS was the most cost-effective method for 

DOD to support its travel. 

Senator COLEMAN. I thought there was a recommendation for 

analysis, an alternative travel solution, a pilot program to assess 

whether commercial travel systems can be used as partial end-toend solutions. Was that recommendation part of that report? 

Mr. GIMBLE. I think the recommendation was that because of upgrades and advances in technology, they should go look at other solutions. I do not believe that they did that. 

Senator COLEMAN. I want to be clear that the recommendation 

was there. But my question is did DOD comply with recommendations? 

Mr. GIMBLE. No. 

Senator COLEMAN. So we are sitting here now almost 4 years 

after 2002 and we still do not have the data necessary to do an 

evaluation; is that correct? 

Mr. GIMBLE. That is correct. 

Senator COLEMAN. In August 2005, I sent a letter to your predecessor, Inspector General Schmitz,1 to undertake a full complete 

and independent performance and cost evaluation of DTS to deterVerDate 0ct 09 2002 10:09 Apr 23, 2007 Jkt 032354 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 C:\DOCS\32354.TXT SAFFAIRS PsN: PAT
13

mine if it is the most cost-effective solution to DOD travel needs. 

On May 11, 2006, you advised me in a letter that DOD lacked the 

data needed to perform a cost benefit evaluation. We will agree on 

that. 

Without the data, how can we answer the question about whether DTS is the most cost-effective way to meet the Department’s 

traveling? 

Mr. GIMBLE. I think the situation is going to be that DOD needs 

a travel system and whether there is a deficiency in the one we 

have, depends on whether you look at the financial side of it or the 

reservation side of it. 

I think the study required by Section 943 will address the reservation side of this to see if there is a better way of doing it based 

on commercial technology. And then if you look at the accounting 

side, our view of that is that it works pretty well. It is not perfect, 

but it works pretty well. If we can separate those out, I think that 

would be the way forward, hopefully in the results that come out 

of the Section 943 study. 

But I think personally the idea of going back and doing a cost 

benefit analysis, we have tried that three times and the data simply is not there to make a valid meaningful comparison at this 

point. 

Senator COLEMAN. In fact, not just the data is not there, but you 

are also looking at a system that does not cover a lot of things. National Guard and Reserve travel, not covered by DTS. Is that fair 

to say? 

Mr. GIMBLE. There is functionality that has not been released 

that would cover that. But as it stands right now, the National 

Guard and Reserve and prisoner travel, in addition to permanent 

change of station travel are not covered as routine business travel 

by DTS now. 

So you are right, it is not a full range of routine business travel. 

Senator COLEMAN. Senator Coburn. 

Senator COBURN. Thank you. 

Basically you cannot manage what you cannot measure. In your 

testimony, both of them, I think it is fair to say that they cannot 

measure it. Can they measure what they have done and whether 

or not it is efficient, whether or not it saves money? 

Mr. GIMBLE. No. The answer to that is no. 

Senator COBURN. Mr. Williams, can they measure it? 

Mr. WILLIAMS. No. To expand on that particular statement, as 

you know, Senator, over the years there has been numerous financial management legislation passed to improve financial accountability. 

The bottom line in most of that legislation is that what we are 

trying to get to, you hear people talking about clean opinions and 

improving systems. But the bottom line is the overall goal is to 

have good cost information so that decisionmakers can make informed and timely decisions. 

DOD financial management is still on our high-risk list. So until 

you get that, then you are not going to have the information or the 

data that you need to make a good system as to how much it costs 

to go this way or to go that way, or what have you. 

14

Senator COBURN. Who owns DTS system? Who owns the technology? 

Mr. WILLIAMS. Based on the previous hearing, it was divided into 

various components, and to my knowledge, it has not changed. 

The Director of DFAS at the time basically stated that there are 

several applications that DOD developed and DOD owned those. 

There were numerous interfaces and DOD also owned the interfaces that had been developed. 

In addition, as far as the source code, etc., that was developed 

by Northrop Grumman, DOD had the right to use that data as well 

as the right if down the road another contractor took over DTS, to 

provide that information to the new contractor. So I guess if you 

summed it all up, it would be DOD. 

Senator COBURN. So DOD owns the technology and the software 

associated with Defense Travel System? 

Mr. WILLIAMS. That is my understanding. 

Senator COBURN. So I can have a good understanding of where 

we are today, we are still going to be paying $40 million to $50 million a year for this; correct? Other than the abeyance that was in 

the Defense Authorization Bill; is that correct? 

Mr. WILLIAMS. There will be cost each year to maintain the operations, such as the PMO Office, as well as paying the CTOs, etc. 

There will also be ongoing costs if DTS continues to be DOD’s travel system. 

Senator COBURN. I think everybody looking at this, that the financial accounting function of this is pretty good, considering the 

mess at the Department of Defense on accounting. 

Mr. WILLIAMS. I think everything that I have seen as far as the 

processing of the accounting transactions for the travel, that if you 

go through a process in which you do have the no touch and there 

is an automated payment, that you are talking about a transaction 

cost somewhere in the neighborhood of $2, $2.22, versus a manual 

process that could increase that cost to about $35. 

Senator COBURN. So there is potential for savings on the accounting side of this? 

Mr. WILLIAMS. That is correct. 

Senator COBURN. So the next question is if they do not get the 

right fare, if they do not get the best fare, if people book it but then 

by the time it is done they did not get the fare because it is not 

a booking system, whatever savings we have got we have got great 

potential to lose in terms of an increased cost? Just looking at it 

in the whole of what we have. 

Mr. WILLIAMS. That is correct. If you end up saving $32 on your 

processing fee, and you end up——

Senator COBURN. Paying $100 more for the flight. 

Mr. WILLIAMS [continuing]. Paying $200 more for a flight, then 

you really have not achieved savings in that scenario. 

Senator COBURN. Let me tell you about a guy I travel with every 

week. He works for the Defense Department. He flies out of Tulsa, 

just like I do. And he says the accounting system of this is good 

but the booking system stinks. So he does not use it to book. He 

goes on Travelocity or Orbitz, books his flight, then uses the DTS 

system to get it paid for because routinely he did not get the fare 

or the flight by going through DTS. 

15

If that is the case, why are we still paying for the booking side 

of it, if it does not work? And he is not the only one. Everybody 

that I talk to in the military says this is not working. It is not 

working the way it should be working and it is not working on a 

timely basis. 

So the question is, my the ultimate question to that is are the 

recommendations in your reports to create a way to measure the 

effectiveness of this so that we say let us quit sending money down 

the rathole, we paid for this system of accounting, let us start 

using it and let us go to some other method of booking travel, hotels, rental cars, etc. 

Are there recommendations in your reports that you think they 

will follow that will get us to that point? 

Mr. WILLIAMS. Senator Coburn, that was outside of the scope of 

what we were asked to do. We basically just laid out some of the 

facts as far as the fundamentals of the assumptions and the usage. 

Senator COBURN. Let me ask you for your opinion then. What is 

your opinion as far as the internal cost accounting function of this 

versus the booking function? Should we continue to pay money into 

this system, in your opinion, for the booking side of it that does not 

seem to be efficient? 

Mr. WILLIAMS. I would have to say that, based on what I have 

heard today, I would concur with the statement that there are savings on the accounting side, as far as the difference between manual versus automated payments. 

I would not like to form an opinion as to your question because 

I have basically looked at this from a fact-based standpoint. We 

have not analyzed how much savings you are getting from DTS, 

not how much more it is going to cost DOD? 

Mr. GIMBLE. Senator Coburn, I think, from our perspective, is 

that when they do the Section 943 study, when they separate that 

out, depending on what that shows, and whether there will be a 

savings or not, they will make that decision as to whether to go forward with the reservation part or not. 

However, I think the bigger challenge for us is that we think the 

accounting part is working and we have recommendations that 

would request the Department to come up with a strategy to have 

a 100 percent deployment of the accounting part of it or, if the Section 943 study comes back with a workable reservation side of the 

equation with it, that would be deployed, too. 

I think one of the things that we see is it is not being deployed 

fully across the Department. And that is one of the things that we 

see as a challenge. 

Senator COBURN. Would you think there may be some stimulation or incentive if the contractor was paid on a per usage basis 

rather than a gross dollar contract? 

Mr. GIMBLE. I have not thought enough on that to have a valid 

opinion. 

Senator COBURN. I have. If it was per item used, they would be 

a whole lot more efficient, if that is where the revenues were. 

Mr. Chairman, I yield back. 

Senator COLEMAN. Thank you. Thank you, Senator Coburn. 

16

1The prepared statement of Mr. Chu appears in the Appendix on page 61. 

I have a whole series of other questions but we have Undersecretary Chu here and I would like to hear his testimony. I think the 

point has been made. 

My frustration over this, again we are talking about lack of data. 

So now we are going to spend 4 years and we still do not have 

data. We have a system, the report notes 5 of 27 DOD locations 

were not using it at all, 22 sites using it occasionally. The anecdotal comment of your Tulsa individual, from Oklahoma, who was 

not using it. The report demonstrates that is not at all unusual. 

And then if you ask the question why, it is obvious that it does 

not list all hotels, it does not do the city pairs, it does not cover 

train travel, a whole range of voids. I think at a certain point in 

time, even if we are analyzing, we have this dream, this hope. We 

have this great system out there. And at some point somebody has 

to say what is the cost and how much do we keep pouring into this, 

understanding the accounting side makes sense. 

I am not going to do another round unless, Senator Coburn, you 

have some desire to do so. 

Senator COBURN. No, I just would like the opportunity to insert 

written questions of the witnesses so that we can get the answers 

back. 

Senator COLEMAN. That is fine. 

Gentlemen, then this panel is excused and we will then call the 

next panel, which will be Under Secretary Chu. 

Mr. Secretary, I want to thank you for appearing before this 

panel. I appreciate that you are understanding that we will typically have the investigators issue the reports before we hear even 

from senior administration personnel. So I want to thank you. 

As you know, all witnesses before this Subcommittee are required to be sworn. I would ask you to please stand and raise your 

right hand. 

Do you swear the testimony you are about to give before this 

Subcommittee is the truth, the whole truth, and nothing but the 

truth, so help you, God? 

Mr. CHU. I do. 

Senator COLEMAN. Thank you, Mr. Secretary. 

I think you are familiar with the timing system and your complete testimony will be entered into the record. I would ask you to 

begin. 

TESTIMONY OF DAVID S.C. CHU, Ph.D.,1 UNDER SECRETARY 

FOR PERSONNEL AND READINESS, U.S. DEPARTMENT OF 

DEFENSE 

Mr. CHU. Thank you, Mr. Chairman. I appreciate the opportunity 

to outline for your Subcommittee this morning where the Department stands on the Defensive Travel System and on the larger 

question of commercial travel policy of the Department. 

These are two important subjects. They overlap. They are not, of 

course, exactly the same. 

Commercial travel policy in the past in the Department of Defense has been a fragmented responsibility. The Department made 

the decision and began executing the decision in February of this 

17

year to bring all travel policy oversight into one place, into my office, and we have created a Defense Travel Management Office in 

order to carry out that responsibility. I anticipate we will complete 

the transfer of the various functions relating to travel in the Department, in terms of policy oversight, by the end of the current 

fiscal year. 

We have two goals in our oversight responsibilities, our new 

oversight responsibilities, for commercial travel policy in the Department. The first is to ensure that we get the best value, both 

for the government and for the user. The user embraces both the 

organization an individual works for and that individual himself or 

herself. 

Second, we need to ensure that the systems that support the 

user are responsive and can provide effective assistance. We have, 

as you have outlined in the earlier panel, all sorts of different travel situations in the Department of Defense and we need to be able 

to be supportive of the needs of our travelers in those highly varying circumstances. 

We recognize that we are partners in this enterprise with industry and with the users, both the organizations in which they work 

and the travelers themselves. And I believe we are making 

progress in establishing that climate of partnership. 

If I may turn very briefly, then, to the Defense Travel System 

itself. It has, as the earlier panel and your discussion of its testimony underscores, two important functions. It is a financial management system and it is a booking system. Indeed, you might view 

it as a management information system. 

It began in the middle of the last decade. It began in the last Administration as part of the reengineering government approach. 

They set out a very ambitious vision, to have a single system that 

would end-to-end deal with all of the transactions involved in travel, starting with the traveler’s inquiry as to what the options might 

be, through the booking of the ticket and inclusive, importantly, of 

the back office accounting functions for the funds involved, to be 

sure that they were applied correctly. 

Indeed, if you look at this history, in my judgment, and I am a 

newcomer to this—I received responsibility just recently for this 

system—the focus really was on the financial support elements of 

this system. You could see that in the proponency for this system, 

largely from the financial community. You can see it in the way the 

workload was organized for the development of the system. The 

first priority in this system was the back office financial management element, not the booking system, not the traveler’s convenience. 

I think as you look at some of the challenges this system faces, 

that explains some of the issues that we have with us today. 

I would be honest, sir, in acknowledging the Department is not 

satisfied with our track record on this system, particularly as it applies to the travel functions, what the traveler sees, the booking 

end, as you have phrased it. 

I do believe an important element, a root cause if you will, in 

some of that dissatisfaction does lie in our previously fragmented 

oversight for commercial travel within the Department. Therefore, 

I am hopeful that if we can bring a more cohesive approach to the 

18

management of the commercial travel department we will, in the 

end, solve these front-end problems. 

I do not want to get ahead of the independent study that Congress directed we undertake. So I am trying very hard not to form 

decided opinions about what works or what does not work. 

I am struck that most observers of the Defense Travel System 

agree that the back office financial functions work reasonably well. 

At the same time, there are extensive criticisms of the front end, 

the booking end, the kind of thing that you see on an airline’s travel site or a hotel systems travel site or in Travelocity or various 

other commercial systems that are out there. And I do acknowledge 

that is where the work probably needs to focus as we go forward. 

We will be using the independent study as our guide, sir. We are 

almost ready to launch that study. It does need to meet a tight set 

of deadlines so we can be successful. 

We are taking as a principle, however, that the Defense Travel 

System in the end is a means, not an objective in and of itself. Our 

real goal here, as articulated earlier, is to ensure that we get the 

best value for the government and for the users of the system and 

that we provide responsive, effective assistance to the many travel 

situations that Department personnel confront. 

Senator COLEMAN. Thank you, Mr. Secretary. 

I appreciate your reflection that DTS is not an end in itself. It 

is a means to an end. If the end is one that can be accomplished 

without it, particularly on the travel side, I think that is important 

to reflect. 

Before I begin my questioning, I just want to raise one other 

issue that has come up in regard to the investigation of this. It has 

to do with a sensitivity on the part of whistleblowers. I want to 

bring it to your attention because as we go forward, I will tell you 

that we have talked to travel agents who work with DTS every 

day. They have been very critical. And there was some concern 

about coming forward, that there would be some retribution. 

Robert Langsfeld was a consultant who was retained to conduct 

a study of the efficacy of DTS. He testified before this Subcommittee last year. He was fired by GSA, and he testified, when 

he said he refused to change adverse findings about DTS. 

So I just want to bring the issue and put the issue on the table 

because we have had travel agents who chose not to come forward 

because I did not want to put them in a position that they felt was 

jeopardizing their financial livelihood. So I think by bringing it to 

your attention, I would take it that you will have great sensitivity 

to that and ensure that whistleblower protection is out there for 

any who are involved in this kind of review and investigation. 

Mr. CHU. We certainly would, sir, and I want to go further than 

that. We are eager to understand what the criticisms are. I know 

one of the issues in the various reports, GAO and IG, is the question of mandating use of the system. And in fact, the Department 

did, in 2001, under the then leadership, mandate the use of the 

system. 

But in the end, as we all appreciate in these endeavors, if the 

system is not user-friendly—let me put it positively. The system 

needs to be user friendly, helpful to the traveler and the using 

19

agency, or people will find ways around its use. I think Senator 

Coburn pointed to his traveler as an example of that. 

So in the end, we need an effective system and we need to hear 

from the critics as to what they do not like about the system. We 

need to have an outlook of correcting problems, as opposed to defending any particular set of software. We are not trying to do that. 

I would want to emphasize, however, and I do not want my comments to be taken as unduly harsh vis-a-vis the Defense Travel 

System as an enterprise—because if you look at the lines of code 

in the system, it is my understanding that 85 to 90 percent of the 

lines of code in the system have to do with the accounting back office functions. Again, I do not want to reach conclusions prematurely, but my sense of the various evaluations is that even the 

more critical agencies think that portion of the system works reasonably well and is a success. 

Senator COLEMAN. Again, I think the focus, clearly the focus of 

the principal criticism has been on the travel piece. 

Mr. CHU. As you phrased it in the earlier panel, the booking 

function——

Senator COLEMAN. The booking rather than the travel function. 

Mr. CHU [continuing]. As opposed to the accounting for travel, 

paying the travel voucher. 

That has all been speeded up enormously. It is more accurate, 

better managed, I think. The financial community within the Department is very happy with the functionality in that regard. They 

see criticisms of the Defense Travel System as a threat to the improved performance they think they have achieved in that domain. 

I want to be careful not to cause commotion in that regard. 

Senator COLEMAN. I would hope at the same time that we are 

careful to recognize when there is great user concern reflected in 

the data. 

Mr. CHU. Absolutely, sir. 

Senator COLEMAN. You talked about that we are looking forward 

to the independent study. The DOD’s Office of Program and Analysis evaluation recommended an analysis of alternative travel solutions, and a pilot program to assess whether commercial travel solutions can be used as partial end-to-end solutions. I think the testimony was that these recommendations were never implemented. 

Mr. CHU. That is all before my time, sir. I have taken, as my instruction, your statutory direction that we constitute a new independent study with a forward look. If we made mistakes in the 

past, they unfortunately cannot be undone. What we need to do 

now is put ourselves on the right course for the future. 

Senator COLEMAN. One of the problems of even complying with 

the current study, the Congressionally mandated study, is they do 

not have the data. 

Mr. CHU. We have acted on that front, sir, and we have started 

to put in place the metric set that, at least from our perspective, 

will be important to judging whether a system is successful or not. 

So I think we are, and I believe the previous witness acknowledge 

that we are, in the process of putting those metrics into place. 

Senator COLEMAN. My frustration is 4 years ago we had recommendations to do evaluations. There was no data. We are sitting 

here today, 4 years later, there is no data. We are now hearing we 

20

are beginning to put metrics in place and at least the money clock 

is——

Mr. CHU. There are data, sir. I think the issue is how complete 

are they. 

I would also emphasize, as I have looked at the prior and most 

recent efforts to evaluate the cost-effectiveness of the system, I 

think there are two big points that deserve emphasis. 

First of all, some costs are a bygone. What we have already spent 

on DTS, whether it was meritorious or not, is spent. We cannot get 

it back. We cannot sell it. Maybe we can sell it, but I will leave 

that for someone else to adjudicate. 

Second, I think the real savings here are not where we have been 

looking. We have been looking at could we reduce manpower. We 

believe we have. The Air Force, for example, took several hundred 

bullets out of the travel function. That is an issue of methodological 

dispute with the General Accounting Office where I have a different position than they do, I should emphasize. 

But the real savings here come from two sources, in my judgment. One, better enforcement of Defense Department policies on 

travel. For example, use of premium class travel, when is it applicable and when it is not applicable. 

Second, encouraging the Department to pick cost-effective solutions to its travel needs. I will give you an example of an issue we 

are reviewing in the Department. The Department’s policy now 

heavily favors the use of refundable tickets. The airline industry—

I have flown for 56 years, yes, all tickets used to be refundable. 

Few tickets these days are refundable. 

That is a good policy if you are dealing with one traveler because 

he or she may change his plans or her plans. But if I have 10 people going, maybe I should be looking at nonrefundable fares because they are typically much less expensive. Even if I have to cancel one or two tickets, I could be ahead of the game. One of the difficulties with the current policy is we have a very myopic, sodastraw view. We do it traveler by traveler. Sometimes, we do groups, 

I grant. 

And so what I am hoping we can bring to this whole set of issues 

is a broader view of how do you have a cost-effective travel policy, 

not just a travel booking system? 

Senator COLEMAN. And I appreciate your focus on that, and certainly the focus on first-class travel has been a result of the investigation of this Subcommittee that found massive abuse of the firstclass travel system. So in the process, we have changed that. 

Mr. CHU. We are painfully aware of that, sir. 

Senator COLEMAN. So we appreciate that. 

But a question in terms of savings. You are still using legacy systems, are you not? So in spite of all this investment—at least on 

the travel side. In spite of all this investment in a system that is 

obviously not being used to the extent it should, at the same time 

you have not gotten rid of your legacy systems. 

Mr. CHU. Not all, sir, and I think that is one of the challenges 

in front of us is to be able to turn off the legacy systems. But it 

comes back, I think, to the issue you have raised, the confidence 

of the traveler in the new system. 

21

We need to build that confidence. I think we are slowly gaining 

their confidence. Part of it is a matter of education and training for 

our people. Part of it is a matter of demonstrating that the system 

will, in fact, do what it is supposed to do for them. That is an ongoing issue. 

Senator COLEMAN. According to the travel agents who I spoke 

with, almost all of them said that the DTS does not—on the travel 

booking side—does not compete, is not in the same ballpark as current commercially available travel systems. Again, experience 

shows you folks are not using DTS. They are using the currently 

available systems. 

When you evaluate DTS, what I would like to see is a commitment that you are evaluating against commercially available systems, what is out there. 

Mr. CHU. I think that is part of the set of issues for the independent study. I do think we have to be a little careful when we 

observe that some of our travelers are not using DTS. DTS does 

have built into it our current policy rules. They do not permit you 

or make it more difficult for you to do things that we have judged—

whether wisely or not—to be courses of action we prefer you not 

follow. 

So one advantage people gain by going off to a commercial system is they do not have to comply immediately with those strictures. So I think we have to be a little careful about this issue of 

how people have used some other system. Sometimes it is in order 

to get outcomes that we have, as a matter of policy, proscribed. 

Now whether they should be proscribed or not, that is one of the 

doors I wish to open and want to look at. Are we in the right place 

with all of our travel policies? As I have started to look through 

these travel policies the last few months, I certainly find some of 

them earn that sort of an antique quality. They were the right 

choices when the industry behaved in a particular manner 5, 10, 

15, or 20 years ago, and in some cases more years ago than that. 

They may not be the right choices today. That is part of the debate 

we are having inside the Department. What travel policies do we 

want to have the Department following? And how are we going to 

enforce them? 

DTS, importantly, is an enforcement mechanism. That is one of 

the reasons I think we should be careful about simply saying we 

can use a commercial travel system. 

I am not against the commercial travel systems. I use them for 

my personal travel. Many of them are very fine. 

Senator COLEMAN. I understand the concern. Again, we keep getting back to the back end, the accountability. When the travel is 

completed, you want to make sure it is processed in the right way. 

We want to make sure we have information to track that and to 

audit that. We want to make sure that policies are followed, particularly first-class travel by way of example. 

But my problem is we have a system that right now does not 

cover a range of functions in daily travel. In testimony, the Reserve, the National Guard, that does not provide complete information, that does not provide the cheapest or the lowest available 

fares. 

22

So I hear what you are saying about we want to keep people tied 

into a good accounting system. But if in the end they are paying 

significantly more than we should, if they are not getting the service that they deserve—and in fact, they are speaking with their fingers and their legs, they are walking or dialing something else. It 

tells you that even with that goal of having that good back end, if 

the travel end is not operating, you have got a problem and the 

taxpayers are paying for it. 

Mr. CHU. We fully agree with you, sir. We fully agree on the objectives. I do think I want to underscore why we face the issues 

that you have just described. 

First, in terms of functions not covered, that is because, as I testified, the focus of the system at the start was on the financial back 

end. That is why they started with the financial systems. 

Had the focus been on the traveler, I think we would have started at the other end. Whether we should have done it that way or 

not, we cannot change now. We are now trying to bring that spirit 

to the system. 

Second, this question of lowest possible fare. The Department’s 

policy is to emphasize the use of refundable airfares. That is one 

of the things I want to emphasize. Many of our travelers, in my 

judgment, and that is the policy issue I am reopening, are questioning why do we have that policy? They can buy a non-refundable 

ticket, often at a fraction of the cost of the refundable fare. Their 

issue is why cannot I do that and save more money? 

Now why does the Department have that policy? Because many 

travelers change their plans, the situation changes at the last 

minute. Then from the individual traveler perspective, the government has ‘‘lost’’ that money——

Senator COLEMAN. Mr. Secretary, I am going to turn to my colleague. Just one comment here. 

The issue is not competing policies. The issue is that we do not 

even know what the lowest fare is. It would be one thing to say 

well, we have a choice. We know this is low-fare but we want a refundable ticket. We have half a billion dollars in a system in which 

we cannot even tell you if it is the lowest fare. We cannot tell you 

because it does not have all the information. 

Mr. CHU. I think, Senator, that criticism—I have started looking 

into that criticism. I do not claim to have a complete understanding. But from what I have developed so far, I think a lot of 

that criticism has to do with the issue of in what travel window 

have you asked for fares. This is an issue in the commercial travel 

sites, as well. Many of them are much more friendly in cuing you 

to understand. If you just enlarge the window here you get a better 

price, or change the travel date. 

So I think you want to be a little careful, on that particular 

point, to be overly critical of DTS. 

Senator COLEMAN. Senator Coburn. 

Senator COBURN. I want to be plenty critical of it. Let us go back. Do you have any concern that we started out with $250 million 

in cost to get a Defense Travel System and we are at a half a billion now? Does that bother you at all? 

Mr. CHU. Absolutely, Senator, but that is not my doing, I want 

to emphasize. 

23

Senator COBURN. I understand that. 

How do we keep from making this mistake again? How do we 

change procurement to where we do not go down a money pit and 

we do not get what we thought we bought, and yet we paid twice 

for what we thought we bought and we still do not have it? And 

it is not just DTS and the defense system that are doing that. 

So my question to you is what do we change in the Department 

of Defense so this does not happen again? 

Mr. CHU. I think sir, let me offer a hypothesis here. This started 

in the last Administration with a very visionary view of how to 

deal with travel, end-to-end system, a lot of management data, do 

exactly the kinds of things that have been called for in this hearing 

this morning. 

It was married up with a business strategy that had, in my judgment, not been tested on the scale the Department of Defense operates and with the complexities of the rule sets and the varieties of 

travel in which our travelers engage. 

Senator COBURN. I just do not buy that. Northrop Grumman has 

been contracting with the Federal Government for a long time. 

Mr. CHU. No, sir, that is not the issue of the contractor—actually 

it started out as BDM, it did not start out with Northrop Grumman, which was, in turn, bought by TRW, that was in turn bought 

by Northrop Grumman. So Northrop Grumman has inherited this 

system, just as my office has inherited the system. 

But to your excellent question, what is the generic problem that 

led to less success than was originally envisioned? My personal 

view, and that is all it is, my personal hypothesis, is that we tried 

on a full scale both an ambitious vision and a new business strategy for how we might develop such software. It was originally going 

to be a fee-for-service system. In other words, the Department 

would pay a fee every time they used it and the developer would 

therefore absorb all the costs. 

My personal view is trying that many new things on that scale 

at once was not the right procurement strategy. 

Senator COBURN. I do not buy that. The fact is that we do not 

have policies that say we buy something and we are going to get 

what we paid for and there is a consequence if a vendor does not 

supply it. 

What we have said is there is no consequence. We are going to 

keep giving you money, whether you deliver or not. 

Let me go on to a couple of other things. 

Mr. CHU. Sir, if I could just respond a moment, I think you are 

speaking to the change in procurement strategy that occurred early 

in this Administration in which the Department switched from that 

original strategy to the present one, which is more classic in its 

construction. 

My understanding—I have asked the same question. Why did we 

change? What were the causes of this change? 

My understanding is that it was exactly because of the issue that 

Senator Coleman raised. The military departments, the Uniformed 

Services, came to the then-responsible agency and complained that 

the system was not going to cover the breadth of functionality, the 

types of travel that they needed. It was too much oriented to ordiVerDate 0ct 09 2002 10:09 Apr 23, 2007 Jkt 032354 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 C:\DOCS\32354.TXT SAFFAIRS PsN: PAT
24

nary domestic business travel, not the variety of military situations 

that are actually confronted. 

So in order to meet those new requirements, the Department decided to switch procurement strategies. I am not sure it is entirely 

fair to blame other parties for that. 

Senator COBURN. If they were spending their own money, they 

would have gotten one heck of a lot better value out of this. And 

remember we are not spending our money. We are spending our 

grandchildren’s money. 

Mr. CHU. Sir, I am equally upset at the expense that is involved 

here, but I have also had the privilege of watching the Department 

try fixed-price development contracts, which I think is what you 

are arguing for. There is merit to that if it is well-understood technology. If it is not, what the Department has found, is that often 

you get into much worse trouble. 

Senator COBURN. I would tell you Expedia.com is well understood 

technology. Travelocity.com is well understood technology. You did 

not have to redevelop that. You could have bought it. Nobody did 

that. What we did is——

Mr. CHU. Sir, as I——

Senator COBURN. I have a limited amount of time and I want to 

get to another area. 

Mr. CHU. Sir, but if I may—just to keep the record straight, 85 

to 90 percent of the code in this system is not for what 

Expedia.com does or Travelocity.com does, 85 or 90 percent of the 

code is for back office accounting function. 

Senator COBURN. That is fine, but you already said——

Mr. CHU. That is where the expense is. 

Senator COBURN [continuing]. They did not concentrate on that, 

and that is where the problems are with the system. 

Mr. CHU. No, sir. As I have been best able to assemble the 

record, that is what they did concentrate on. That is where most 

of the expense really lies. 

Senator COBURN. Is in the back office. 

Mr. CHU. Is in the back office. 

Senator COBURN. I do not have any complaints. I think they have 

done a good job on that. But if that is the case in the back office 

and we are still at twice the contract price and we have not gotten 

the front part, which could have been contracted out. 

Let me go on to another area. I want to know, a Federal judge 

said that you all did not own this, the DOD does not own this, in 

2004. In a September 23 letter to the DTS contractor, Northrop 

Grumman said they would sign over the ownership rights to the 

DOD if requested. 

Have you done that? Do you own it? 

Mr. CHU. The General Accounting Office witness, I think, accurately summarized the situation, which is that there are elements 

of the system that the Defense Department does not ‘‘own’’. We 

have the rights in perpetuity to that software and we may use it 

with a different agent. 

Senator COBURN. It was my understanding, Northrop Grumman 

said they would sign over the ownership rights to that if requested. 

Mr. CHU. I am not a lawyer, sir, but my understanding of the 

legal situation is that, as a technical matter, what we have are the 

25

rights in perpetuity. In other words, we can use it as if we owned 

it. We cannot sell it to somebody. 

Senator COBURN. I am not asking you whether or not to sell it. 

Mr. CHU. We have the rights—my understanding is we have——

Senator COBURN. If we paid for it, is it going to be turned around 

and sold to somebody else, as well? 

Mr. CHU. We have the rights in perpetuity to the system and we 

have the right to allow someone else to be our agent for it. 

Senator COBURN. The other thing you said you are developing, 

according to the Defense Authorization Bill, the metrics on how you 

are going to make the decision. I have a request for you. The request is that before you start making that decision, I think it would 

be very wise to share those metrics with this Subcommittee. 

Mr. CHU. I would be delighted to. 

Senator COBURN. If those metrics are the wrong metrics and we 

get another year down the road and another set of measurements 

that do not mean anything, all we are going to do is spend a lot 

more money. 

Mr. CHU. We have nothing to hide, sir. We would be glad to 

share the metrics with you. 

Senator COBURN. I would be very appreciative of that, so we can 

look at it and say are we really making the good decision? 

With that, I will yield back. 

Senator COLEMAN. Thanks, Senator Coburn. 

Secretary, if 85 percent of this relates to accounting, would it be 

then difficult is to strip out the travel function? 

Mr. CHU. I am not a software engineer. In principle you would 

believe—but I do not know: It is true you could think about a different front end. The business issue would be, are you better off 

correcting the problems with this front end—and I use front end 

very generically here, it is not physical—or would you be better off 

acquiring another front end? 

I have learned enough about the system and its functionality to 

understand that a good deal of the expense in terms of the code on 

the front end has to do with embedding DOD travel policy. 

So for example, we want a feature that triggers a review if you 

try to book premium class travel. That is made complicated by the 

fact that the airlines do not have standard codes. They all vary as 

to what this is. 

So it is not as if you could just take something without also paying attention to what policy controls we want to impose on the system. 

So I am sorry to offer a less than clear answer, but my belief is 

yes, you could contemplate a different front end. 

Senator COLEMAN. Do you disagree with the statement of the 

first panel that we still do not know if the DTS is the best most 

cost-effective travel system for the Department of Defense? 

Mr. CHU. I was actually struck, Senator, in listening to the prior 

witnesses, when you started on that question, you asked what are 

the alternatives? And there was a full 60 seconds of silence. There 

really is not an off-the-shelf alternative that does all of the things 

DTS does. 

And therein lies the difficulty. This comes back, in some ways, 

to some of Senator Coburn’s excellent questions about procurement 

26

strategy. If we decided to switch to ‘‘something else,’’ either in part 

or in whole, what is that? Where is that system? What would it 

cost to customize to the various needs the Department has? 

In fact, I have asked the most egregious question, suppose we 

just turn the whole thing off? What would happen? What I discovered would happen is we would revert to a series of labor-intensive 

manual practices. Certainly on the back-end accounting front, you 

do not want to do that. 

We are exploring all options, sir. 

Senator COLEMAN. One of the problems with why you cannot answer that question is because in 2002, when there was a report 

that was issued that said that—and this is the study by the Department’s Office of Program Analysis and Evaluation that I think 

you headed yourself for 12 years. 

Mr. CHU. In an earlier era, yes, sir. 

Senator COLEMAN. By the way, 2002, that is this Administration. 

Mr. CHU. That is correct. 

Senator COLEMAN. This Administration had a study that said 

look at some alternatives. Are you troubled by the fact that, in fact, 

those pilots or those recommendations were never implemented? 

Mr. CHU. I think what I would highlight is the Department’s decision to start correcting the fundamental problem here, which is 

travel policy in the Department. It was in three different offices 

until February of this year. It has been brought together under my 

office’s jurisdiction. We have the same objective you do, which is 

very traveler oriented. How are we going to make the traveler effective? 

Because one of the costs here, and one of the savings in my judgment, is if I have a traveler who arrives rested and ready to go, 

I have a more productive employee than someone who is worn out 

because they took a slightly cheaper connecting flight through some 

city pair fare that someone happens to love. 

So we have a different view of this. We have gotten ourselves to 

a different place. Should we have gotten here faster? Absolutely. I 

make no apology, make no attempt, rather, to defend the fact that 

we should have gotten here faster. We should have. Absolutely. 

Senator COLEMAN. Again, are you troubled by the fact that a 

2002 report of the Office of Program Analysis and Evaluations recommendations, particularly recommendations for looking at pilots 

and alternatives, were never implemented? Are you troubled by 

that? 

Mr. CHU. I think whether I am troubled or not, the real issue is 

what are we going to do going forward? That is where my focus is. 

Senator COLEMAN. And our focus is what are we going to do 

going forward. 

Mr. CHU. Right. 

Senator COLEMAN. I have no further questions. Senator Coburn. 

Senator COBURN. Commonsense tells you to step back from this 

thing and say we ought to be able to learn we did not do this one 

right. It does not mean people’s efforts and their desires were 

wrong. No reflection on that. As you can tell, I am very frustrated. 

From our other Subcommittee, we think there is $40 billion a 

year in waste inside the Pentagon, in terms of procurement. And 

27

this is just a little symptom of what is going on. So I think we 

ought to look at that. 

What I will assure you is that if this thing is not straightened 

out by next year, the Senate will not move a thing until it is. Because if we cannot fix the small things like a travel system for the 

Pentagon, there is no way we are ever going to solve the bigger 

ones. 

The commonsense is this thing works on an accounting basis but 

does not work on travel. Go contract with Travelocity or one of the 

others and get the travel portion of it done. Tell them what you 

want and they will do it. They are in it for money. And they can 

do it cheaper, better, faster than we will ever develop a system inside the government. 

So we ought to be using the outside vendors who have already 

experienced and already done it wrong several times, rather than 

to try to relearn it ourselves. 

What I would think is keep the accounting portion, tell the people here how it is going to be. Some outside vendor is going to come 

and say we will give you a great deal. We will cut you a deal better 

than anybody in the country. And we will write it the way you 

want it and we will just use our system. This is Travelocity for the 

Defense Department. You will have it done and the work will be 

done and you will save us and our kids a ton of money. 

We should not keep beating ourselves in the head trying to do 

something that we are not qualified to do. 

Mr. CHU. Senator, we are not trying to do that. 

Senator COLEMAN. That is why the metrics are very important. 

Mr. CHU. That is why this independent study is important. That 

is why we are going to use it as our guide to the future. 

I do want to emphasize the Department is not writing the code 

for this. This has been an outside vendor from the start. I did not 

choose the vendors, I did not choose the procurement strategy. But 

we are where we are. 

Senator COBURN. I understand, but the point is you better get it 

fixed. That is all I am saying. 

Mr. CHU. We are committed to it. 

Senator COBURN. And you better find the answer between this 

time and next year or there is not going to be any money going to 

the Pentagon, as long as I am a U.S. Senator, until this is fixed. 

Senator COLEMAN. Mr. Secretary, the question that is still out 

there: Is this the best most effective system? And we really do need 

an answer to that. 

My last observation is——

Mr. CHU. Sir, if I may though, I would urge those who ask the 

question to offer the alternatives. What is the specific alternative? 

Not generic, ‘‘let us try again.’’

Because I have—you referred to my 12 years in Program Analysis and Evaluation. I have watched the Department try again and 

watched it better become the enemy of good enough. That can be 

a very expensive procurement strategy. 

Senator COLEMAN. And 4 years ago there was a directive to at 

least look at alternatives, look at pilots, and those were not followed. So we are in this place today. I do not want to keep going 

28

back to yesterday. I am really not happy about yesterday. I am concerned about tomorrow. 

My last observation though is this, we talk a lot about the back 

end system. But in the end, this is about people. Folks are not 

using this for reasons. I understand the policy and the process, and 

we want to make sure. But I think you have got—we are in the 

customer service—your customers are your employees, in this instance. And I think you have got to be listening to your customer, 

listening to your employees who are telling you loudly that this 

system on the travel end simply does not work. 

Mr. CHU. Sir, we are and we are committed to doing so. 

I should emphasize there are 600,000 users of the booking function in DTS today, people in the Department. That is a very significant customer base. So I think it is a little unfair to say it is not 

being used. 

But it is not where it needs to be. I agree with you. We are eager 

to hear those criticisms. We are eager to respond to those criticisms. Some of them have to do with underlying policies in the Department and how the travel industry treats those policies. 

Senator COLEMAN. I would note, without engaging in debate, that 

both the GAO and the DOD IG have reported and testified that Department information on DTS usage is unreliable. But we are back 

to the same problem. We do not have sufficient data. We do not 

have sufficient analysis. We know the question out there. 

We share a goal. The goal is the best most cost-effective system, 

good for the taxpayers, good for the employees, good for all of us. 

Let us figure out how to reach that goal. 

Thank you, Mr. Secretary. 

Mr. CHU. Agreed. Thank you, sir. 

Senator COLEMAN. With that, this hearing is now adjourned. 

[Whereupon, at 11:29 a.m., the Subcommittee was adjourned.] 

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