United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Oversight 

and Investigations, Committee on Armed 

Services, House of Representatives

DEFENSE TRAVEL 

SYSTEM 

Overview of Prior Reported 

Challenges Faced by DOD 

in Implementation and 

Utilization 

Statement of McCoy Williams 

Managing Director 

Financial Management and Assurance 

For Release on Delivery

Expected at 3:00 p.m. EDT

Tuesday, April 15, 2008

 

GAO-08-649T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 15, 2008

DEFENSE TRAVEL SYSTEM 

Overview of Prior Reported Challenges Faced by DOD 

in Implementation and Utilization 

Highlights of GAO-08-649T, a testimony 

before the Subcommittee on Oversight 

and Investigations, Committee on Armed 

Services, House of Representatives 

In 1995, the Department of Defense 

(DOD) began an effort to 

implement a standard 

departmentwide travel system, the 

Defense Travel System (DTS). This

testimony is based on previously 

issued GAO reports and 

testimonies that highlighted 

challenges confronted by DOD in

the implementation of DTS. More

specifically, today’s testimony 

focuses on prior GAO reporting

concerning (1) the lack of

quantitative metrics to measure the 

extent to which DTS is actually

being used, (2) weaknesses with 

DTS’s requirements management

and system testing, and (3) two key 

assumptions related to the 

estimated cost savings in the 

September 2003 DTS economic

analysis were not reasonable. 

Today’s testimony also highlights

some actions that DOD could 

explore to help streamline its 

administrative travel processes 

such as using a commercial

database to identify unused airline

tickets.

What GAO Recommends

In its January and September 2006

reports, GAO made several

recommendations aimed at

improving the management of DTS.

In commenting on these reports,

DOD generally agreed with the 

recommendations and described

efforts to address them. In

commenting on the draft of the

September 2006 report, DOD 

disagreed with the finding that the 

reported savings were unrealistic. 

However, DOD did not provide any 

data to support its assertion. 

Overhauling the department’s antiquated travel management practices and 

systems has been a daunting challenge for DOD. In several prior reports and 

testimonies, GAO identified several key implementation issues regarding 

DOD’s ability to make DTS the standard travel system for the department. 

Specifically, GAO reported that DTS was not being used to the fullest extent 

possible, and DOD lacked comprehensive data to effectively monitor its 

utilization. At the time of GAO’s 2006 review, DOD’s utilization data were 

based on a model that was developed in calendar year 2003. However, the

model had not been completely updated to reflect actual DTS usage at that 

time. The lack of up-to-date utilization data hindered management’s ability to

monitor progress toward the DOD vision of DTS as the standard travel 

system. Additionally, the continued use of the department’s legacy travel 

systems resulted in the underutilization of DTS and adversely affected the 

expected savings that DTS could achieve. 

Furthermore, GAO previously reported weaknesses in DTS’s requirements 

management and system testing practices. GAO found that DTS’s 

requirements were still inadequate. GAO noted that until DOD improves 

DTS’s requirements management practices, the department will not have 

reasonable assurance that DTS can provide the intended functionality. 

Additionally, GAO’s 2006 report of the September 2003 DTS economic analysis 

found that the two key assumptions used to estimate annual net savings were 

not based on reliable information. Two cost components represented the 

majority of the over $56 million in estimated net savings—personnel savings 

and reduced commercial travel office fees. GAO’s analysis found that 

$24.2 million in personnel savings related to the Air Force and the Navy were 

not supported. 

• Air Force and Navy DTS program officials stated that they did not 

anticipate a reduction in the number of personnel, but rather the shifting 

of staff from the travel function to other functions. 

• The Naval Cost Analysis Division stated that the Navy will not realize any

tangible personnel cost savings from the implementation of DTS. 

In regard to the commercial travel office fees, GAO’s 2006 reporting disclosed 

that the economic analysis assumed that 70 percent of all DTS airline tickets 

would either require no intervention or minimal intervention from the 

commercial travel offices resulting in an estimated annual net savings of 

$31 million. However, the support provided by the DTS program office was an 

article in a trade industry publication. The article was not based on 

information related to DTS, but rather on the experience of one private-sector 

company. In addition, GAO identified concepts that the department can adopt 

to streamline its travel management practices. 

To view the full product, including the scope 

and methodology, click on GAO-08-649T. For 

more information, contact McCoy Williams at 

(202) 512-2600 or williamsm1@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

Thank you for the opportunity to discuss our two reports1

 and related 

testimonies2

 regarding the problems encountered by the Department of 

Defense (DOD) in its efforts to implement the Defense Travel System 

(DTS). In 1995, the DOD Task Force to Reengineer Travel issued a report 

that pinpointed three principal causes for DOD’s inefficient travel system: 

(1) travel policies and programs were focused on compliance with rigid 

rules rather than mission performance, (2) travel practices did not keep 

pace with travel management improvements implemented by industry, and 

(3) the travel system was not integrated. To address these concerns, DOD 

established the Project Management Office—Defense Travel System 

(PMO-DTS) to acquire travel services that would be used DOD-wide as the 

department’s standard end-to-end travel system.3

 The department 

estimated that DTS would be deployed at an estimated 11,000 locations 

during fiscal year 2007. The September 2003 economic analysis noted that 

DTS, when fully implemented, would result in annual net savings of over 

$56 million during fiscal years 2009 to 2016. In December 2003, the 

department’s Chief Information Officer approved funding for DTS of 

approximately $564 million. Of this amount, the contract for the design, 

development, and deployment of DTS was for about $264 million. The 

remaining costs are associated with areas such as the operation and 

maintenance of DTS, operation of the PMO-DTS, the voucher payment 

process, and management and oversight of the numerous contracted 

commercial travel offices. 

 1

GAO, DOD Business Transformation: Defense Travel System Continues to Face 

Implementation Challenges, GAO-06-18 (Washington, D.C.: Jan. 18, 2006) and Defense

Travel System: Reported Savings Questionable and Implementation Challenges Remain, 

GAO-06-980 (Washington, D.C.: Sept. 26, 2006). 

2

GAO, Defense Travel System: Estimated Savings Are Questionable and Improvements 

Are Needed to Ensure Functionality and Increase Utilization, GAO-07-208T (Washington, 

D.C.: Nov. 16, 2006), and DOD Business Transformation: Preliminary Observations on

the Defense Travel System, GAO-05-998T (Washington, D.C.: Sept. 29, 2005). 

3

DOD expects DTS to perform all functions related to travel or ensure that other systems 

are provided with adequate information to provide this functionality. For example, 

obligating funds associated with travel is a necessary function, and DTS is expected to 

(1) make sure that adequate funds are available before authorizing travel either through 

information contained in its system or by obtaining the necessary information from another 

system, (2) obligate funds through issuance of approved travel orders, and (3) provide

DOD’s financial management systems with the necessary information so that those systems 

can record the obligation. Since DTS is required to ensure that all travel-related 

functionality is properly performed, DOD commonly refers to DTS as an “end-to-end travel 

system.” 

Page 1 GAO-08-649T 
My testimony today is based on our prior reports and testimonies4

 and I 

will highlight three key findings we previously reported upon. 

• The department did not have quantitative metrics to measure the 

extent to which DTS was actually being used. 

• DOD had not addressed several functional problems associated with 

weak requirements management and system testing. 

• Two key assumptions related to the estimated cost savings in the 

September 2003 DTS economic analysis were not reasonable.

Finally, I will highlight suggestions of actions that the department could 

explore to help streamline its travel processes. 

The underlying work done to support our reports and testimonies was 

performed in accordance with generally accepted government auditing 

standards. Details on our scope and methodology are discussed in each 

respective report and testimony. 

Our prior reports and testimonies5

 related to DTS have highlighted various

management challenges that DOD confronted in attempting to make DTS 

the standard end-to-end travel system for the department. For example, 

our 2006 report noted that the department did not have quantitative 

metrics to measure the extent to which DTS was being used. At the time of 

our review in 2006, the reported DTS utilization rates were based on a 

methodology that was developed using estimated data, and PMO-DTS 

program officials acknowledged that the model had not been updated with 

actual data as DTS continued to be implemented at the 11,000 sites. As a 

result, the PMO-DTS relied on outdated information in calculating DTS 

utilization rates that were reported to DOD management and the Congress. 

Additionally, we have previously reported the continued use of the 

department’s legacy travel systems resulted in the underutilization of DTS

and adversely affected the savings DTS could achieve. 

Summary 

We also reported in 2006 that DOD had not addressed several functional 

problems associated with weak requirements management and system 

 4

GAO-06-18, GAO-06-980, GAO-07-208T, and GAO-05-998T.

5

GAO-06-18, GAO-06-980, GAO-07-208T, and GAO-05-998T. 

Page 2 GAO-08-649T 
testing. Requirements represent the blueprint that system developers and 

program managers use to design, develop, test, and implement a system. 

Because requirements provide the foundation for system testing, they 

must be complete, clear, and well documented to design and implement an 

effective testing program. Adequately defined and tested requirements are 

one of the key elements to help reduce a project’s risks to acceptable

levels.6

 We identified 246 unique General Services Administration (GSA) 

city pair flights that should have been identified on one or more DTS flight 

displays according to the DOD requirements. However, 87 of these flights 

did not appear on one or more of the required listings. As a result, DTS 

users did not have access to needed flight information. 

Furthermore, our 2006 report noted that DOD’s September 2003 DTS 

economic analysis found that two key assumptions used to estimate cost 

savings were not well supported. Two primary areas represented the 

majority of the over $56 million of estimated annual net savings DTS was 

expected to realize—personnel savings of $24.2 million and reduced 

commercial travel office fees of $31 million. The $24.2 million estimated 

annual personnel savings were attributed to the Air Force and Navy.7

However, Air Force and Navy DTS 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. 

Further, the Naval Cost Analysis Division stated that the Navy will not 

realize any tangible personnel cost savings from the implementation of 

DTS. DOD officials responsible for reviewing economic analyses stated 

that while shifting personnel to other functions is considered a benefit, it 

should be considered an intangible benefit rather than tangible dollar 

savings since the shifting of personnel does not result in a reduction of 

DOD expenditures. 

In regard to the estimated annual savings of $31 million attributed to lower 

commercial travel office fees, we requested, but the PMO-DTS could not 

 6

“Acceptable levels” refers to the recognition that any systems acquisition effort will have 

risks and will suffer the adverse consequences associated with defects in the processes. 

However, effective implementation of disciplined processes, which include: project 

planning and management, requirements management, risk management, quality 

assurance, and testing, reduces the possibility of the potential risks actually occurring and 

prevents significant defects from materially affecting the cost, timeliness, and performance 

of the project. 

7

The economic analysis identified annual savings of $11.3 million and $12.9 million for the 

Air Force and Navy, respectively. 

Page 3 GAO-08-649T 
provide, any analysis of travel data to support the assumption that 

70 percent of all airline tickets would be considered “no touch”—meaning 

that there would be no or minimal intervention by the commercial travel 

office, thereby resulting in lower commercial travel office fees. We found 

that the 70 percent assumption was based on an article that appeared in a

travel industry trade publication.8

In addition, as noted in our January 2006 report,9 opportunities existed to 

achieve the vision of a travel system that reduces the administrative 

burden and cost while supporting DOD’s mission. At that time, some of the 

actions we suggested that the department could take to help streamline its 

travel management practices, included (1) automating approval of changes 

to authorized travel expenses, (2) using a commercial database to identify

unused airline tickets, and (3) utilizing restricted airfares where cost 

effective. 

In our two reports, we made 14 recommendations to help improve the 

department’s management and oversight of DTS. In commenting on our 

reports, the department generally agreed with the recommendations and 

described its efforts to address them. However, in commenting on a draft

of our September 2006 report,10 DOD disagreed with our finding that the 

estimated personnel savings are unrealistic. The department’s comments 

noted that DOD is facing an enormous challenge and continues to identify

efficiencies and eliminate redundancies to help leverage available funds. 

In our response, we noted that the department provided no new data that

countered our finding. 

In September 1993, the National Performance Review called for an 

overhaul of DOD’s temporary duty (TDY) travel system. In response, DOD 

created the DOD Task Force to Reengineer Travel to examine the travel

process. In January 1995, the task force issued the Report of the 

Department of Defense Task Force to Reengineer Travel.

11 On 

Background 

 8

American Express News Releases: American Express’ Interactive Travel Update, (New

York, N.Y.: Aug. 11, 2003), http://corp.americanexpress.com/gcs/cards/us/ni/pr/081303.aspx. 

9

GAO-06-18. 

10GAO-06-980. 

11DOD, Report of the Department of Defense Task Force to Reengineer Travel 

(Washington, D.C.: January 1995). 

Page 4 GAO-08-649T 
December 13, 1995, the Under Secretary of Defense for Acquisition, 

Technology, and Logistics and the Under Secretary of Defense 

(Comptroller)/Chief Financial Officer issued a memorandum, 

“Reengineering Travel Initiative,” establishing the PMO-DTS to acquire

travel services that would be used DOD-wide. In a 1997 report to the 

Congress, the DOD Comptroller pointed out that the existing DOD TDY 

travel system was never designed to be an integrated system.12

Furthermore, the report stated that because there was no centralized 

focus on the department’s travel practices, the travel policies were issued 

by different offices and the process had become fragmented and 

“stovepiped.” The report further noted that there was no vehicle in the 

current structure to overcome these deficiencies, as no one individual 

within the department had specific responsibility for management control 

of the TDY travel system. To address these concerns, the department 

awarded a firm fixed-price, performance-based services contract in May 

1998. Under the terms of the contract, the contractor was to start 

deploying a travel system and to begin providing travel services for 

approximately 11,000 sites worldwide, within 120 days of the effective date

of the contract, completing deployment approximately 38 months later. 

Our reports and testimonies13 related to DTS have highlighted various 

management challenges that have confronted DOD in attempting to make 

DTS the standard end-to-end travel system for the department. The issues

we have reported on include underutilization of DTS, weaknesses in DTS’s 

requirements management and system testing practices, and the adequacy

of the economic analysis. These reported weaknesses are summarized 

below. 

DTS Faced Numerous 

Challenges 

• DTS underutilization. Our January 2006 and September 2006 

reports14 noted the challenge facing the department in attaining the 

anticipated DTS utilization. More specifically, as discussed in our 

September 2006 report, we found that the department did not have 

reasonable quantitative metrics to measure the extent to which DTS 

was actually being used. The reported DTS utilization was based on a 

 12Office of the Under Secretary of Defense (Comptroller), Department of Defense Travel 

Reengineering Pilot Report to Congress (June 1997). 

13GAO-05-998T, GAO-06-18, GAO-06-980, and GAO-07-208T. 

14GAO-06-18 and GAO-06-980. 

Page 5 GAO-08-649T 
DTS Voucher Analysis Model15 that was developed in calendar year 

2003 using estimated data, but over the years had not been completely 

updated with actual data. 

The DTS Voucher Analysis Model was prepared in calendar year 2003 

and based on airline ticket and voucher count data that were reported 

by the military services and defense agencies, but the data were not 

verified or validated. Furthermore, PMO-DTS officials acknowledged 

that the model had not been completely updated with actual data as 

DTS continued to be implemented at the 11,000 sites. At the time, we 

found that the Air Force was the only military service that submitted 

monthly metrics to the PMO-DTS officials for use in updating the DTS 

Voucher Analysis Model. Rather than reporting utilization based on 

individual site system utilization data, DOD relied on outdated 

information in the reporting of DTS utilization to DOD management 

and the Congress. We have previously reported16 that best business 

practices indicate that a key factor of project management and 

oversight is the ability to effectively monitor and evaluate a project’s 

actual performance against what was planned. In order to perform this 

critical task, best business practices require the adoption of 

quantitative metrics to help measure the effectiveness of a business 

system implementation and to continually measure and monitor 

results, such as system utilization. The lack of accurate and pertinent 

utilization data hindered management’s ability to monitor its progress 

toward the DOD vision of DTS as the standard travel system as well as 

to provide consistent and accurate data to Congress. 

DTS’s reported utilization rates for the period October 2005 through 

April 2006 averaged 53 percent for Army, 30 percent for Navy, and 

39 percent for Air Force. Because the PMO-DTS was unable to identify 

 15DOD developed a model in calendar year 2003 that compares the expected usage against 

the actual usage. The expected usage was obtained by using historical data, such as ticket 

counts, to determine the expected number of vouchers processed by a given location. For 

example, if a location had 1,000 vouchers as its expected number of vouchers per the

model, but processed 750 actual vouchers through DTS, then the PMO model considered

that that location had achieved a 75 percent utilization rate. The model then took the 

individual computations for each DTS location and “rolled them up” to determine the total 

utilization for individual service performance on a monthly basis.

16GAO, Financial Management Systems: Additional Efforts Needed to Address Key 

Causes of Modernization Failures, GAO-06-184 (Washington, D.C.: Mar. 15, 2006), and

Financial Management Systems: Lack of Disciplined Processes Puts Implementation of

HHS’ Financial System at Risk, GAO-04-1008 (Washington, D.C.: Sept. 23, 2004). 

Page 6 GAO-08-649T 
the total number of travel vouchers that should have been processed 

through DTS (total universe of travel vouchers), we reported that these 

utilization rates may have been over- or understated. PMO-DTS 

program officials confirmed that the reported utilization data were not 

based on complete data because the department did not have

comprehensive information to identify the universe or the total number 

of travel vouchers that should be processed through DTS. PMO-DTS 

and DTS military service officials agreed that the actual DTS utilization 

rate should be calculated by comparing actual vouchers processed in 

DTS to the total universe of vouchers that should be processed in DTS. 

The universe would exclude those travel vouchers that could not be 

processed through DTS, such as those related to permanent change of 

station travel. 

The underutilization of DTS also adversely affected the estimated 

savings. As discussed in our September 2005 testimony17 there were at 

least 31 legacy travel systems operating within the department at that 

time. The testimony recognized that some of the existing travel 

systems, such as the Integrated Automated Travel System, could not be 

completely eliminated because the systems performed other functions, 

such as permanent change of station travel claims that DTS could not 

process. 

However, in other cases, the department was spending funds to 

maintain duplicative systems that performed the same function as DTS. 

Since these legacy systems were not owned and operated by DTS, the 

PMO-DTS did not have the authority to discontinue their operation. We 

have previously stated that this issue must be addressed from a 

departmentwide perspective. 

Further, because of the continued operation of the legacy systems at 

locations where DTS had been fully deployed, DOD components were 

paying the Defense Finance and Accounting Service (DFAS) higher 

processing fees for processing manual travel vouchers as opposed to 

processing the travel vouchers electronically through DTS. According 

to an April 13, 2005, memorandum from the Assistant Secretary of the 

Army (Financial Management and Comptroller), DFAS was charging 

the Army $34 for each travel voucher processed manually and $2.22 for 

each travel voucher processed electronically—a difference of $31.78. 

 17GAO-05-998T. 

Page 7 GAO-08-649T 
The memorandum noted that for the 5-month period, October 1, 2004,

to February 28, 2005, the Army spent about $5.6 million more to 

process 177,000 travel vouchers manually rather than processing the 

vouchers electronically using DTS. 

• Requirements management and system testing. Our January 2006 

and September 2006 reports18 noted problems with DTS’s ability to 

properly display flight information and traced those problems to 

inadequate requirements management and system testing. As of 

February 2006, we found that similar problems continued to exist. 

Once again, these problems could be traced to ineffective requirements 

management and system testing processes. Properly defined 

requirements are a key element in systems that meet their cost, 

schedule, and performance goals since the requirements define the 

(1) functionality that is expected to be provided by the system and 

(2) quantitative measures by which to determine through testing 

whether that functionality is operating as expected. 

Requirements represent the blueprint that system developers and 

program managers use to design, develop, and acquire a system. 

Requirements represent the foundation on which the system should be 

developed and implemented. As we have noted in previous reports,19

because requirements provide the foundation for system testing, they 

must be complete, clear, and well documented to design and

implement an effective testing program. Absent this, an organization is 

taking a significant risk that its testing efforts will not detect significant 

defects until after the system is placed into production. We reported in 

September 200620 that our analysis of selected flight information 

disclosed that DOD did not have reasonable assurance that DTS 

displayed flights in accordance with its stated requirements. We 

 18GAO-06-18 and GAO-06-980. 

19See, for example, GAO-04-1008 and GAO, Army Depot Maintenance: Ineffective 

Oversight of Depot Maintenance Operations and System Implementation Efforts, 

GAO-05-441 (Washington, D.C.: June 30, 2005).

20GAO-06-980. 

Page 8 GAO-08-649T 
analyzed 15 domestic GSA city pairs,21 which should have translated 

into 246 GSA city pair flights for the departure times selected. 

However, we identified 87 flights that did not appear on one or more of 

the required listings based on the DTS requirements. 

After briefing PMO-DTS officials on the results of our analysis in 

February 2006, the PMO-DTS employed the services of a contractor to 

review DTS to determine the specific cause of the problems and 

recommend solutions. In a March 2006 briefing, the PMO-DTS 

acknowledged the existence of the problems and identified two 

primary causes. First, part of the problem was attributed to the 

methodology used by DTS to obtain flights from the Global Distribution 

System (GDS). The PMO-DTS stated that DTS was programmed to 

obtain a “limited” amount of data from GDS in order to reduce the 

costs associated with accessing GDS. This helps to explain why flight 

queries we reviewed did not produce the expected results. To resolve 

this particular problem, the PMO-DTS proposed increasing the amount 

of data obtained from GDS. Second, the PMO-DTS acknowledged that 

the system testing performed by the contractor responsible for 

developing and operating DTS was inadequate, and therefore, there 

was no assurance that DTS would provide the data in conformance 

with the stated requirements. This weakness was not new, but rather 

reconfirmed the concerns discussed in our September 2005 testimony 

and January 2006 report22 related to the testing of DTS. 

• Validity of economic analysis. As noted in our September 2006

report,23 our analysis of the September 2003 economic analysis found 

that two key assumptions used to estimate cost savings were not based 

on reliable information. Consequently, the economic analysis did not 

 21GSA awards contracts to airlines to provide flight services between pairs of cities. This is 

commonly referred to as the GSA city pair program. Under this program (1) no advanced

ticket purchases are required, (2) no minimum or maximum length of stay is required, 

(3) tickets are fully refundable and no charges are assessed for cancellations or changes, 

(4) seating is not capacity controlled (i.e., as long as there is a coach-class seat on the

plane, the traveler may purchase it), (5) no blackout dates apply, (6) fare savings average 

70 percent over regular walk-up fares, and (7) fares are priced on one-way routes

permitting agencies to plan for multiple destinations. We selected the first 15 city pairs that 

were provided by DOD to GSA in support of a GSA study on accuracy of flight displays and

fare information by DTS and the GSA eTravel providers. 

22GAO-05-998T and GAO-06-18. 

23GAO-06-980. 

Page 9 GAO-08-649T 
serve to help ensure that the funds invested in DTS were used in an 

efficient and effective manner. Two primary areas—personnel savings 

of $24.2 million and reduced commercial travel office fees of 

$31 million—represented the majority of the over $56 million of 

estimated annual net savings DTS was expected to realize. However, 

the estimates used to generate these savings were unreliable.

The personnel savings of $24.2 million was attributable to the Air Force 

and Navy.24 The assumption behind the personnel savings computation 

was that there would be less manual intervention in the processing of 

travel vouchers for payment, and therefore, fewer staff would be 

needed. However, based on our discussions with Air Force and Navy 

DTS program officials, it was questionable how the estimated savings 

would be achieved. 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 shifting staff to other 

functions. According to DOD officials responsible for reviewing 

economic analyses, while shifting personnel to other functions was 

considered a benefit, it should have been considered an intangible 

benefit rather than tangible dollar savings since the shifting of 

personnel did not result in a reduction of DOD expenditures. Also, as 

part of the Navy’s overall evaluation of the economic analysis, program 

officials stated that “the Navy has not identified, and conceivably will 

not recommend, any personnel billets for reduction.” Finally, the Naval 

Cost Analysis Division’s October 2003 report on the economic analysis 

noted that it could not validate approximately 40 percent of the Navy’s 

total costs, including personnel costs, in the DTS life-cycle cost 

estimates because credible supporting documentation was lacking. The 

report also noted that the PMO-DTS used unsound methodologies in 

preparing the DTS economic analysis. 

We also reported in 2006 that according to DOD’s September 2003 

economic analysis, it expected to realize annual net savings of 

$31 million through reduced fees paid to the commercial travel offices 

because the successful implementation of DTS would enable the 

majority of airline tickets to be acquired with either no or minimal 

intervention by the commercial travel offices. These are commonly 

referred to as “no touch” transactions. However, DOD did not have a 

 24 The economic analysis identified annual savings of $11.3 million and $12.9 million for the 

Air Force and Navy, respectively. 

Page 10 GAO-08-649T 
sufficient basis to estimate the number of transactions that would be 

considered “no touch” since the (1) estimated percentage of 

transactions that can be processed using “no touch” was not supported 

and (2) analysis did not properly consider the effects of components 

that use management fees, rather than transaction fees, to compensate 

the commercial travel offices for services provided. The weaknesses 

we identified with the estimating process raised serious questions as to 

whether DOD would realize substantial portions of the estimated 

annual net savings of $31 million. DOD arrived at the $31 million of 

annual savings in commercial travel office fees by estimating that 

70 percent of all DTS airline tickets would be considered “no touch” 

and then multiplying these tickets by the savings per ticket in 

commercial travel office fees. However, we found that the 70 percent 

assumption was not well supported. We requested, but the PMO-DTS 

could not provide, an analysis of travel data supporting its assertion. 

Rather, the sole support provided by the PMO-DTS was an article in a 

travel industry trade publication.25 The article was not based on

information related to DTS, but rather on the experience of one 

private-sector company.

As noted in our January 2006 report,26 opportunities existed at that time to 

better achieve the vision of a travel system that reduces the administrative

burden and cost while supporting DOD’s mission. Some of the suggested 

proposals are highlighted below. 

Streamlining DOD 

Travel Processes 

• Automating approval of changes to authorized travel expenses.

The business process used at the time by DTS designated the traveler’s 

supervisor as the authorizing official responsible for authorizing travel 

and approving the travel voucher and making sure the charges are 

appropriate after the travel is complete. Furthermore, should the actual 

expenses claimed on the travel voucher differ from the authorized 

estimate of expenses, the authorizing official was required to approve 

these deviations as well. For example, if the estimated costs associated 

with the travel authorization are $500 and the actual expenses are $495, 

then the authorizing official was required to approve the $5 difference. 

If the difference was caused by two different items, then each item 

 25American Express News Releases: American Express’ Interactive Travel Update, (New

York, N.Y.: Aug. 11, 2003), http://corp.americanexpress.com/gcs/cards/us/ni/pr/081303.aspx. 

26GAO-06-18. 

Page 11 GAO-08-649T 
required approval. Similarly, if the actual expenses are $505, then the 

authorizing official was required to specifically approve this $5 

increase. This policy appeared to perpetuate one of the problems noted 

in the 1995 DOD report—compliance with rigid rules rather than 

focusing on the performance of the mission. One practice that could be

used to reduce the administrative burden on the traveler and the 

authorizing official was to automatically make the adjustments to the 

travel claim when the adjustments do not introduce any risk or the cost 

of the internal control outweighs the risk. For example, processing a 

travel claim that was less than the amount authorized does not pose 

any more risk than processing a travel claim that equals the authorized 

amount since the key was whether the claim is valid rather than 

whether the amount equals the funding initially authorized and 

obligated in the financial management system. 

• Using commercial databases to identify unused airline tickets.

We have previously reported that DOD had not recovered millions of 

dollars in unused airline tickets.27 One action that DOD was taking to 

address the problem was requiring the commercial travel offices to 

prepare reports on unused airline tickets. While this action was a 

positive step forward, it required (1) the commercial travel offices to 

have an effective system of performing this function and (2) DOD to 

have an effective program for monitoring compliance. At the time, we 

suggested that a third party service, commonly referred to as the 

Airlines Reporting Corporation,28 might provide DOD with the 

necessary information to collect unused airline tickets in an automated 

manner. If the information from the Airlines Reporting Corporation 

was utilized, DOD would not have to rely on the reports prepared by 

the commercial travel offices and would have been able to avoid the 

costs associated with preparing the unused airline ticket reports. 

According to DOD officials, at the time of our review, this requirement 

had not yet been implemented in all the existing commercial travel 

office contracts, and therefore, the total costs of preparing the unused 

airline ticket reports were unknown. 

 27GAO, DOD Travel Cards: Control Weaknesses Led to Millions of Dollars Wasted on 

Unused Airline Tickets, GAO-04-398 (Washington, D.C.: Mar. 31, 2004). 

28According to the Airlines Reporting Corporation, it was established by the travel industry 

to provide prompt, efficient, secure distribution and settlement of travel purchased in the

United States. 

Page 12 GAO-08-649T 
• Utilizing restricted airfares where cost effective. DOD’s business 

rules and the design of DTS provided that only unrestricted airfares 

should be displayed. However, adopting a “one size fits all” policy did 

not provide an incentive to the traveler to make the best decision for 

the government, which was one of the stated changes documented in 

the 1995 DOD report. Other airfares, generally referred to as restricted 

airfares, may be less expensive than a given GSA city pair fare and 

other unrestricted airfares. However, as the name implies, these fares 

come with restrictions. For example, within the GSA city pair fare 

program, changes can be made in the flight numerous times without 

any additional cost to the government. Generally, with restricted 

airfares there was a fee for changing flights.29 The Federal Travel 

Regulation and DOD’s Joint Travel Regulations allow travelers to take 

restricted airfares, including on those airlines not under the GSA city 

pair contract, if the restricted airfare costs less to the government. 

Adopting a standard policy of using one type of airfare—unrestricted or 

restricted—is not the most appropriate approach for DOD to follow. A 

better approach would have been to establish guidance on when 

unrestricted and restricted airfares should be used and then monitor 

how that policy was implemented. Although development of the 

guidance is an important first step, we previously stated that

management also needs to determine (1) whether the policy was being 

followed and (2) what changes are needed to make it more effective. 

In our two reports we made 14 recommendations to help improve the 

department’s management and oversight of DTS and streamline DOD’s 

administrative travel processes. In commenting on our reports, the 

department generally agreed with the recommendations and described its 

efforts to address them. The implementation of our recommendations will 

be an important factor in DTS’s achieving its intended goals. We will be 

following up to determine whether and if so, to what extent, DOD has 

taken action to address our recommendations in accordance with our 

standard audit follow-up policies and procedures. We would be pleased to 

brief the Subcommittee on the status of the department’s actions once we 

have completed our follow-up efforts. 

Concluding Remarks 

 29Other types of restrictions include purchasing the ticket in advance or staying over a

specified number of days. 

Page 13 GAO-08-649T 
Mr. Chairman, this concludes my prepared statement. We would be happy 

to answer any questions that you or other members of the Subcommittee 

may have at this time. 

For further information about this testimony, please contact McCoy 

Williams at (202) 512-2600 or williamsm1@gao.gov. 

Contact points for our Offices of Congressional Relations and Public 

Affairs may be found on the last page of this testimony. In addition to the 

above contacts, the following individuals made key contributions to this 

testimony: Darby Smith, Assistant Director; Evelyn Logue, Assistant 

Director; J. Christopher Martin, Senior-Level Technologist; F. Abe 

Dymond, Assistant General Counsel; Beatrice Alff; Francine DelVecchio; 

and Tory Wudtke. 

Page 14 GAO-08-649T 

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