Federal Vehicle Fleets: Adopting Leading Practices Could Improve Management
Published: 2013-07-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Federal agencies (excluding the U.S. Postal Service) spend about $3 billion annually to acquire, operate, and maintain about 450,000 civilian and non-tactical military vehicles. Agencies may lease or buy vehicles from GSA, which also issues requirements and guidance on fleet management. In recent years, Congress and the President have raised concerns about the size and cost of federal agencies' fleets. In 2011, the President directed agencies to determine their optimal fleet inventories and set targets for achieving these inventories by 2015 with the goal of a more cost-effective fleet.
GAO was asked to review agency efforts to reduce fleet costs. This report addresses (1) the extent to which selected federal agencies use leading practices to manage their fleets, including their sizes and costs, and (2) any challenges these agencies face in managing their fleets and strategies they use to address these challenges. GAO selected USDA, DHS, Interior, VA, Air Force, and the Army Corps for review based on factors such as fleet size, fleet composition, and changes in fleet size from 2005 to 2011. To identify leading practices, GAO interviewed recognized private sector and government fleet management experts and GSA officials.
section_title: What GAO Found
paragraphs: GAO identified three leading practices for fleet management and found that selected federal agencies--the Departments of Agriculture (USDA), Homeland Security (DHS), the Interior (Interior), and Veterans Affairs (VA); the U.S. Air Force (Air Force); and the Army Corps of Engineers (Army Corps)--follow these practices to varying degrees. These practices are 1) maintaining a well-designed fleet-management information system (FMIS), 2) analyzing life-cycle costs to inform investment decisions, and 3) optimizing fleet size and composition. GAO identified these practices based on views provided by recognized fleet experts and determined that the practices align with legal requirements and General Services Administration (GSA) recommendations.
None of the agencies GAO reviewed capture in their FMISs all of the data elements recommended by GSA. The types of data missing most frequently are data on fleet costs, including indirect costs, such as salaries of personnel with fleet-related duties. Also, some of these systems are not integrated with other key agency systems. As a result, fleet managers face challenges in performing analyses that can guide fleet decisions. All of these agencies are making efforts to improve their data and FMISs, but some lack an approach for estimating indirect fleet costs. GSA's guidance does not discuss how to estimate these costs.
Most of the selected agencies are not fully analyzing life-cycle costs to make decisions about when to replace vehicles. In addition, although most of the selected agencies use life-cycle cost analyses to decide whether to lease or purchase vehicles, some agencies' analyses do not consider a full set of costs. As a result, agencies may not have full information with which to make vehicle replacement and procurement decisions. Officials mainly cited problems with their cost data and FMISs as contributing factors, and efforts to improve in these areas have the potential to enhance agencies' ability to conduct these types of analyses.
In response to the President's 2011 directive and related GSA guidance, the selected agencies have set targets for achieving optimal fleet size and composition. Planned changes in fleet sizes from 2011 to 2015 range from DHS's 15 percent fleet reduction to VA's 8 percent increase. GSA reviewed agencies' initial targets in 2012 and recommended some changes, but lacked supporting documentation to explain how most agencies produced their targets. GSA's lack of information on these methods limits its ability to oversee agencies' fleet optimization efforts and help agencies ensure that their fleets are the right size and composition to meet their missions cost-effectively.
In addition to data-related challenges, agency officials identified three broad fleet management challenges: meeting energy requirements, such as requirements for acquiring alternative fuel vehicles; uncertainty regarding the allocation of funding to fleet management activities; and ensuring that fleet managers have adequate expertise. Agencies have pursued or are pursuing a variety of strategies to address these challenges. These include the fleet optimization process, which calls for agencies to determine how best to fulfill requirements for alternative fuel vehicles; using a working capital fund, which provides a steady stream of funding; and providing online training for fleet managers.
section_title: What GAO Recommends
paragraphs: GAO recommends that the Administrator of GSA 1) develop and publish guidance for agencies on estimating indirect fleet costs and 2) request that agencies provide supporting documentation on their methods for determining their optimal fleet inventories. GSA agreed with the recommendations.

section_title: Letter
paragraphs: Federal agencies (excluding the U.S. Postal Service) spend about $3  billion annually to acquire, operate, and maintain about 450,000 civilian  and non-tactical military vehicles, including passenger vehicles, trucks,  and other vehicles such as ambulances and buses. Agencies can  purchase these vehicles or lease them from the General Services  Administration (GSA). In recent years, Congress, the Office of  Management and Budget (OMB), and the President have raised concerns  about the size and cost of federal agencies’ fleets. For example, in May  2011, the President issued a memorandum which, among other things,  directed agencies to determine their optimal fleet inventories, using a  methodology which emphasizes elimination of unnecessary vehicles and  ensuring the cost-effectiveness of maintaining these inventories. In  addition, recent legislative proposals have called for reductions in  agencies’ fleets.reduce federal vehicle fleet costs. This report addresses (1) the extent to  which selected federal agencies use leading practices to manage their  fleets, including the size and cost of their fleets, and (2) any challenges  these agencies face in managing their fleets and strategies they use to  address these challenges.
Given these concerns, you asked us to review efforts to  We assessed the extent to which the following agencies use leading  practices to manage their fleets: the Departments of Agriculture (USDA),  the Interior (Interior), Homeland Security (DHS), and Veterans Affairs  (VA); and the United States Air Force (Air Force) and the United States  Army Corps of Engineers (Army Corps) within the Department of  Defense. Collectively, these agencies account for about 46 percent of the  roughly 450,000 civilian and non-tactical military vehicles maintained by  the federal government (excluding the U.S. Postal Service). In selecting  these agencies for our review, we considered both civilian and military  agencies with fleets of more than 5,000 vehicles. We looked for variation  in fleet characteristics, such as age of passenger vehicles, changes in  fleet size from 2005 to 2011, and changes in fleet composition (owned  versus leased) from 2005 to 2011, with the goal of capturing a range of  agency characteristics. Within USDA, Interior, DHS, and VA, we selected  the subagencies with the largest fleets and selected a sufficient number  to account for two-thirds of each department’s non-tactical fleet.  Consequently, in USDA we reviewed the Natural Resources  Conservation Service and Forest Service; in DHS we reviewed U.S.  Customs and Border Protection and Immigration and Customs  Enforcement; in Interior we reviewed the National Park Service, Fish and  Wildlife Service, and Bureau of Land Management; and in VA we  reviewed the Veterans Health Administration. Within these four  departments, we focused most of our work on these subagencies’  management of their fleets, except in areas where the department level  has primary responsibility, such as reporting to GSA on department-wide  plans to determine and achieve optimal fleet inventories. Specifically,  except where noted, we focused our work on fleet management practices,  such as the collection and analysis of fleet cost data, of these eight  subagencies as well as the Air Force and Army Corps. Throughout this  report, we refer to these subagencies and their departments as well as to  the Air Force and Army Corps as “agencies.”
To determine the extent to which these selected federal agencies use  leading practices to manage their fleets, including the size and cost of  these fleets, we first identified key leading fleet management practices.  To do so, we interviewed recognized fleet management experts from  consulting companies and private, local government, and nonprofit  entities as well as representatives of fleet management associations. To  identify agency practices, we reviewed agency fleet management  policies, procedures, plans, and other documentation on their fleet  management practices and conducted interviews with fleet management  officials at our selected agencies. We also obtained information from  agencies on their fleet management information systems and on the  types of data that they maintain in these systems and consider in making  investment decisions, such as decisions about whether to own or lease  vehicles. In addition, we examined selected agencies’ assignments of  home-to-work and executive vehicles. To select agencies for our review  and to describe changes in selected agencies’ fleet inventories over time,  we used data in GSA’s Federal Fleet report and additional data provided  by the agencies. We assessed the reliability of this data by reviewing  program documentation and quality assurance tests and discussing data  elements with GSA and agency staff responsible for these data and found  the data sufficiently reliable for these purposes. To identify any  challenges these agencies face in managing their fleets and strategies  they use to address these challenges, we interviewed agency fleet  managers from our selected agencies. We also obtained the views of  GSA officials and the experts identified above about these challenges and  strategies. We analyzed these interviews to identify the challenges that  agency fleet managers identified most frequently and strategies agencies  are pursuing to address these challenges. Further details about our scope  and methodology can be found in appendix I.
We conducted this performance audit from July 2012 to July 2013 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The size and cost of federal vehicle fleets have been subjects of concern  for many years. In 2002, OMB sent a memorandum to the heads of  executive branch agencies directing them to examine the size of their  vehicle fleets and report the size, composition, and cost of their fleets as  part of their budget submission process. In 2004, we reported that  because of a lack of attention to key vehicle fleet management practices,  the agencies we reviewed could not ensure their fleets were the right size  or composition to meet their missions. Most recently, in May 2011, the  President directed each federal agency to determine its optimal fleet  inventory—including the number and types of vehicles needed—and to  set targets for achieving this inventory by December 31, 2015. Key goals  of this process are to eliminate unnecessary vehicles, ensure the cost- effectiveness of maintaining vehicle inventories, and meet alternative fuel  vehicle goals.
From fiscal years 2002 through 2012, the number of federal civilian and  non-tactical military vehicles (excluding postal vehicles) increased 19  percent, from about 364,000 to 450,000 vehicles. Federal agencies use  vehicles—specifically non-tactical vehicles such as passenger cars and  trucks, and special purpose vehicles (e.g., ambulances and buses)—to  carry out their missions. See table 1 for a breakdown of the fleets at the  agencies we selected to study. Reported total costs associated with these  agencies’ fleets in fiscal year 2012 ranged from $48 million for the Army  Corps’ fleet of 8,041 vehicles to $523 million for DHS’ fleet of 50,170  vehicles.
Federal agencies are responsible for acquiring, maintaining, and  managing their vehicle fleets. They are responsible for deciding the  number and type of vehicles they need and how to acquire them,  including whether to own or lease them and when to replace them. Four  of our selected agencies—USDA, Air Force, DHS, and Interior—own  most of the vehicles in their fleets. VA and the Army Corps, lease most of  the vehicles in their fleets. Agencies must develop a maintenance  program for their owned and commercially leased vehicles. Further,  agencies must operate their fleets in a manner that enables them to fulfill  their mission and meet various federal requirements and directives that  affect their fleets and fleet management. These include various statutes,  executive orders, and policy initiatives that direct federal agencies to,  among other things, collect and analyze data on the costs of operating  their fleets, reduce petroleum consumption, acquire alternative fuel  vehicles, and eliminate non-essential vehicles. (See table 2.) In addition,  agencies must follow federal vehicle management regulations.
GSA plays a key role in helping agencies manage their fleets. GSA’s  Office of Government-wide Policy (OGP) promulgates federal vehicle  management regulations, issues guidance on federal fleet operations,  and provides reports on the federal fleet. Federal regulations on fleet  management include requirements regarding agencies’ fleet management  information systems, vehicle replacement policy, and vehicle fuel  efficiency, among other things. OGP also establishes policies and issues  guidance to help agencies manage their fleets effectively and meet  federal requirements. Guidance includes bulletins on various aspects of  fleet management, including fleet management information systems and  methodologies for determining the optimal fleet size for agency fleets.  OGP also promotes interagency collaboration through various  committees and councils, including the Federal Fleet Policy Council, and  has sponsored an annual conference on fleet management. GSA’s OGP  is also responsible for reviewing annually the Federal Automotive  Statistical Tool (FAST) submissions from agencies. FAST is a web-based  reporting tool, jointly sponsored by GSA and the Department of Energy  (DOE), for agencies to report data on their fleets, such as number of  vehicles, costs, and miles driven. FAST is used to satisfy statutory and  regulatory reporting requirements and GSA uses it to produce an annual  Federal Fleet Report.
GSA’s Fleet and Automotive organization manages vehicle-purchasing  and vehicle-leasing programs that offer federal agencies an array of  automotive products, including alternative fuel vehicles, sedans, light  trucks, buses, and heavy trucks. GSA purchases over 50,000 vehicles  annually for federal agencies at prices that, according to GSA, are an  average of 17 percent below the manufacturer’s invoice price. Supported  by a network of regional Fleet Management Centers, GSA also leases  more than 200,000 vehicles to over 75 federal agencies. Federal  agencies may also lease from commercial vendors in certain instances.
section_title: Selected Agencies Follow Leading Practices for Fleet Management to Varying Degrees
paragraphs: We identified three leading practices for fleet management: 1) maintaining  a well-designed fleet management information system (FMIS), 2)  analyzing life-cycle costs to inform investment decisions, and 3)  optimizing fleet size and composition and found that the selected  agencies in our review follow these practices to varying degrees. Most of  the selected agencies lack the data needed to support sound fleet  decision making and oversight and some of their fleet data systems are  not integrated with other key agency systems. None of these agencies  are fully analyzing lifecycle costs to make vehicle investment decisions.  All of the agencies we examined have carried out an internal process for  determining their optimal fleet size and composition and have set targets  for achieving these optimal inventories, but most have not provided GSA,  which reviews these targets, with clear information on the methods they  used for producing them.
subsections: section_title: Leading Fleet Management Practices
paragraphs: We identified three leading practices for fleet management. We identified  these leading practices based on views provided by fleet management  experts in the private sector, local government, and fleet management  associations. We also compared these practices with legal requirements  and GSA and OMB guidance related to federal fleet management. We  found that these leading practices generally align with federal fleet  management legal requirements and GSA and OMB recommendations,  and, as discussed in the following sections, these recommendations  identify specific actions that agencies should complete to adhere to these  types of leading practices. In particular, GSA has issued guidance  containing recommendations for following all of these leading practices.  Finally, we obtained the views of GSA officials responsible for fleet  management on these leading practices. Overall, according to the experts  and GSA officials we interviewed, these practices provide a foundation for  agencies to manage fleet costs while meeting their missions. They  emphasized, in particular, that sound data systems provide the basis for  the various types of analyses that are needed to make cost-effective  investment decisions, such as decisions about whether to own or lease  vehicles, and determine appropriate fleet size and composition. See table  3 for a fuller description of these leading practices.
All of the experts we interviewed noted the importance of maintaining an  FMIS that tracks key data needed to manage the fleet. Additionally, GSA  guidance states that a sound FMIS is needed for monitoring and  analyzing fleet performance and meeting internal and external reporting  requirements. The guidance recommends that agencies’ FMISs capture a  range of information and integrate with financial and property  management systems to facilitate fleet analyses and reporting. Each of  the selected agencies we studied had established an FMIS except for  USDA’s Natural Resources Conservation Service.
Based on information provided by the selected agencies, most of their  FMISs capture the majority of the types of fleet data recommended by  GSA but none include all of these types of data. (See table 4.) GSA  recommends that agencies’ FMISs include data on fleet costs, vehicle  acquisition, utilization, repair and servicing history, accidents, and  disposal, among other things. recommended data but store some of it outside of their FMISs. Some of  the data stored outside of the FMIS are kept in electronic systems, and in  other cases, they are stored in paper file folders.
GSA has reported that depending on their missions and structures, agencies may not  need all of the recommended types of data in their FMISs, or may benefit from other data  that is not explicitly recommended; however, agencies should have the data necessary to  support relevant and comprehensive analyses.
GAO asked agencies to identify a single system as their FMIS and to report on what data are stored  in that system. Fleet data are sometimes collected and stored in systems other than the FMIS, such  as financial and property management systems. For information about whether an agency’s FMIS is  integrated with its financial and property management systems, see table 5.  Interior uses a single, centralized property management system as the department-wide FMIS.
The type of data missing most frequently from selected agencies’ FMISs  are data on costs associated with their fleets, especially indirect costs.  According to GSA’s recommendations, cost data should include direct  expenses, such as fuel, repair, and vehicle depreciation, as well as  indirect costs attributable to the fleet, such as expenditures associated  with personnel.
Six of the nine agencies with FMISs that we reviewed reported to us that  their FMISs do not capture all direct fleet costs. Most selected agencies  keep at least some direct cost data in locations other than in an FMIS,  such as in a financial management information system. For example, of  the nine agencies with FMISs:  five reported that they collect data on vehicle modification costs and  accessory equipment, but some of the data are not stored in the  FMIS; and  three reported that they track some or all of their fuel costs outside of  the FMIS.
In addition, three officials noted that some of their direct cost data lacked  the detail needed to help them track life-cycle costs and make decisions  such as when to replace vehicles.Customs and Border Protection told us that certain details on  maintenance and repair costs may not be reported due to the limitations  of their current fleet payment card, making life-cycle cost analysis difficult  to conduct.
For example, officials from DHS’s  With regard to indirect costs, eight of the nine agencies with FMISs that  we reviewed reported to us that their FMISs do not capture all indirect  fleet costs, or that the indirect costs cannot be readily discerned from  other non-fleet costs. GSA defines indirect costs as any cost that cannot  be ascribed to a particular vehicle or class of vehicles. Examples of  indirect costs include most personnel costs, office supplies, building  rental, and utility costs. While GSA identifies in its guidance the types of  indirect costs that agencies should capture in their FMISs, it has not  provided agencies with guidance on how to estimate those costs.  Indirect costs can be challenging to estimate because they may reflect  the salaries of employees who only work on fleet management part-time  or buildings that are only used partially for fleet-related purposes. Some  agencies have not yet developed an approach for estimating these costs.  For example, officials of Interior’s Bureau of Land Management, and VA’s  Veteran’s Health Administration told us that they lack a method to  attribute a certain percentage of indirect costs, such as of facilities and  equipment, to fleet management. In some cases, total personnel and  facility costs are stored in the agencies’ FMISs but the costs specifically  associated with the agency’s fleet are not readily distinguishable. For  example, DHS’s Customs and Border Protection’s FMIS records data on  facility costs, but it does not have the capability to separate facility costs  associated with fleet management from total facility costs. Out of the  nine agencies with FMISs that we reviewed: eight reported that their FMIS does not include data on facility costs,  or that facility costs in their FMIS are not readily attributable to fleet  management; seven reported that their FMIS does not include data on staffing costs,  or that staffing costs in their FMIS are not readily attributable to fleet  management; and three reported that their FMIS does not include data on fleet-related  equipment costs, including office and shop equipment, and tools.
Only one agency, USDA’s Forest Service, reported that it captures all of  the indirect fleet-related cost data recommended by GSA and can readily  distinguish fleet costs from other indirect costs. For example, Forest  Service officials track all fleet–related program management costs—such  as personnel, facility, travel, and supply costs—and include them in the  Forest Service’s fleet costs. Forest Service officials explained that it is  critical that the agency capture all fleet-related costs, because it charges  the programs and functions that use the vehicles much like how GSA  charges lessees.
In addition, of the nine agencies with FMISs we reviewed, one reported  that it does not keep all of its data on vehicle utilization in its FMIS and  three reported that they do not keep all their data on repairs and servicing  in their FMIS. Officials from DHS’s Immigration and Customs  Enforcement told us that fleet officials in headquarters have access to  limited data on vehicle utilization because some utilization data are  gathered by the mission groups that use the vehicles and are not shared  with headquarters. A few agencies also reported that limitations of the  fleet payment cards they use to record transactions have impaired their  ability to gather detailed data on servicing and repairs. Some cards record  the cost of maintenance, but do not collect information on the type of  maintenance performed.
The lack of an FMIS with comprehensive data on fleet-related costs can  make monitoring and analysis needed for fleet management challenging.  For example, several agency officials said that gathering data on the type  of maintenance performed on vehicles through methods such as  reconciling receipts or using paper logs can make it difficult for fleet  managers to perform timely analyses and guide fleet decisions. As  explained in forthcoming sections, key analyses of agencies’ fleets that  are essential for sound investment decisions and management of fleet  size and composition depend on complete and accurate data, particularly  data on costs and utilization. Furthermore, the lack of complete data in  agencies’ FMISs can impair the validity of reporting on federal fleets, and  could therefore impede the ability of GSA, OMB, and Congress to  oversee the performance of these fleets. According to GSA officials, data  gaps compromise the reporting of accurate agency fleet costs in the  FAST system. In particular, because some agencies do not track all costs  associated with their owned or leased vehicles, the expenditures  associated with all vehicles may appear lower than they actually are. GSA  uses the data that agencies report to produce its annual Federal Fleet  Report, which is used to report statistics such as costs per mile for owned  and leased vehicles. However, because these reports may not fully reflect  the costs of all vehicles, those statistics may be misleading, limiting the  usefulness of this report for oversight of federal fleet costs.
We have previously reported that integrated systems can promote efficiency. See  Information Technology: FDA Needs to Fully Implement Key Management Practices to  Lessen Modernization Risks, GAO-12-346 (Washington, D.C.: March 2012) and  Organizational Transformation: A Framework for Assessing and Improving Enterprise  Architecture Management, GAO-10-846G, (Washington D.C.: August 2010). to repeat the data entry process for the FMIS. Lack of data greatly  reduces the usefulness of FMISs to conduct fleet analysis.
Some agencies we reviewed are making efforts to upgrade and automate  their data collection, which could provide them with additional data  recommended by GSA as well as additional detailed information to  improve analysis and reporting. Most of the experts we interviewed noted  the usefulness of automated data collection to provide timely and  accurate information to guide fleet decisions. In addition, if data are  entered automatically, fewer personnel hours would be needed to collect,  reconcile, and enter data. Several agencies are seeking to adopt fleet  payment cards that will provide them with additional data on certain types  of financial transactions, which would increase their data on direct fleet  costs. For example, officials from USDA’s Natural Resources  Conservation Service told us that, in addition to implementing an FMIS, it  will obtain vehicle and repair cost data from the new USDA fleet card  program by the end of 2013.will help them collect cost data that their previous card did not collect  accurately or completely. Similarly, DHS’s Immigration and Customs  Enforcement is pursuing the capability of importing fuel and maintenance  cost data from fleet payment cards. Four agencies are also exploring  GPS systems that are capable of collecting data on utilization,  greenhouse gas emissions, and direct costs such as scheduled  maintenance and fuel consumption. For example, VA’s Veterans Health  Administration is pursuing efforts to use GPS based devices to upload  data, including utilization and direct cost data, directly into its FMIS.
Officials anticipate that the new fleet card  In 2012, GSA recommended that DHS, USDA, Interior, and VA obtain  centralized, department-wide FMISs. Various efforts are under way at  these departments to address these recommendations, as well as efforts  to integrate systems with property and financial management systems.  (See table 6.) Interior currently possesses a centralized, department-wide  FMIS, which its agencies are either using or plan to use soon. DHS,  USDA, and VA do not currently possess such an FMIS, but are exploring  new ways to store and share fleet data. For example, USDA is adopting  FedFMS, an FMIS developed by GSA for federal agencies, for its  agencies, with the exception of the Forest Service.adopt a centralized FMIS and is examining various options for doing so.  The Air Force and Army Corps already possess centralized FMISs and  are pursuing additional interfaces between systems that will provide  additional cost information.
section_title: Selected Agencies Have Adopted Strategies to Mitigate Such Challenges as Competing Requirements, Funding Allocation, and Lack of Expertise
paragraphs: As previously discussed, data availability and integration of data systems  are key challenges that affect many aspects of fleet management;  however, agency officials also identified three additional, broad  challenges: multiple and competing energy requirements, the allocation of  funding to fleet management activities, and ensuring that fleet managers  have adequate expertise in a decentralized environment. The extent to  which each agency faces these challenges varies. Nevertheless, these  were the most common challenges cited across the agencies we  reviewed. Agencies have pursued or are pursuing a variety of strategies  to address these challenges, which include the fleet optimization process,  leveraging Department of Energy (DOE) tools, using a working capital  fund, and providing online training, among other things.
subsections: section_title: Some Agencies Struggle to Meet Multiple and Competing Energy Requirements
paragraphs: Seven agencies we reviewed identified multiple and sometimes  competing energy requirements as a challenge to effective fleet  management. As described earlier, a defined set of energy requirements  and goals governs the federal fleet through statutes, regulations, and  executive orders. However, we have previously reported that these  statutes and orders were enacted and issued in a piecemeal fashion and  represent a fragmented rather than integrated approach to meeting key  national goals. We have also noted that, because of these numerous  and sometimes conflicting requirements and directives, fleet managers  often lack the flexibility and tools to meet various energy goals, such as  reducing petroleum consumption, energy consumption and greenhouse  gas emissions. For example, agencies may not acquire light-duty or  medium duty motor vehicles that are not low-greenhouse gas emitting  vehicles, and the May 2011 Presidential memorandum directed that by  December 2015, all new light duty vehicles purchased or leased by  agencies must be alternative fuel vehicles.that most alternative fuel vehicles that meet their mission needs do not   However, VA has reported  qualify as low-greenhouse gas vehicles, making it difficult to meet both  mandates.
According to May 2013 data from the Department of Energy, more than 36 percent of  publicly-available compressed natural gas stations are found in just two states—California  and Oklahoma. Also, E-85 stations are relatively uncommon. We have recently reported  that E85 suppliers are concentrated in a few regions in the country. See United States  Postal Service: Strategy Needed to Address Aging Delivery Fleet, GAO-11-386  (Washington, D.C: May 2011). accessing non-commercial fueling sites can pose unique, though not  insurmountable, challenges. For example, according to a Forest Service  official, accessing alternative fuel located on military installations can be  hindered by security concerns and differing payment systems.  Negotiations to resolve these concerns can require investments of  personnel time and effort, which represents additional cost.
The fleet optimization process required by the May 2011 Presidential  memo, financial assistance from GSA, and tools provided to agencies  by the DOE can help agencies balance competing requirements and  determine the best approach for meeting these requirements while  minimizing cost. A key goal of the fleet optimization process is to  determine what fleet size and composition would best meet the agency’s  mission while also adhering to requirements for alternative fuel and fuel- efficient vehicles. To assist agencies with the costs associated with  meeting energy requirements, GSA recently announced an initiative that  would assist agencies in paying for the increased cost of hybrid vehicles.  If agencies choose to consolidate their agency-owned vehicles into the  GSA Fleet inventory, GSA will fund the total incremental cost to replace  eligible vehicles with new, leased hybrid sedans. DOE also offers a  variety of tools to help agencies. For example, the alternative fuel locator  on DOE’s website helps agencies determine what kinds of alternative  fuels are available in a given area, and allows fleet managers to place  alternative fuel vehicles in appropriate locations. In addition, the Army  Corps and DHS have used a DOE tool to project which alternative fuel  vehicles would be appropriate replacements for some of their current  inventories. Some DOE tools can encourage collaboration, which reduces  the burden of meeting requirements and advances mutual goals. For  example, USDA plans to use DOE’s interactive map of vehicles that were  granted waivers to use non-alternative fuels to help identify partners  interested in supporting commercial development of alternative fuel  infrastructure.
section_title: Funding Allocation Can Affect Fleet Cost- Effectiveness
paragraphs: Uncertainty regarding the allocation of funds for fleet management  activities can make it difficult for fleet managers to operate their fleets  cost-effectively. Several agency officials and fleet experts explained that  predictable and reliable funding streams better support sound fleet  management and planning. For example, several officials explained that  when there are unforeseen reductions in acquisition funds that can be  used to replace vehicles, fleet managers are more likely to keep vehicles  that are older and therefore more prone to mechanical failure. As  explained previously, several fleet management experts cautioned that  keeping older vehicles can result in larger and more expensive fleets.  Some noted that in such cases, more vehicles need to be available since  the chance of breakdown is higher.
In some cases, fleet funding is allocated only for certain activities and  may not be used for options that managers consider to be more cost- effective. For example, fleet officials from VA’s Veterans Health  Administration and USDA’s Natural Resources Conservation Service  reported that funds are sometimes allocated specifically for leasing or  specifically to purchase vehicles. Officials said that the required  procurement type is not always the most cost-effective, but they have no  choice but to spend the money as directed. In other cases, funds  allocated for a specific purpose become depleted, even though additional  investment could result in overall savings. For example, Air Force fleet  officials reported that as of March 2013, there are approximately 210  underutilized vehicles, including specialized vehicles, which cannot be  moved to locations where they are needed because funding to transport  vehicles has been exhausted and additional funds have not yet been  approved. Officials said that transporting those underutilized vehicles at  a cost of approximately $2 million would help the Air Force avoid $20  million in potential acquisition costs for new vehicles.
Fleet officials cited two strategies that address challenges associated with  the allocation of funds for fleet management: (1) using a working capital   and (2) developing clear, data- based analyses on the predicted  fundoutcomes of specific funding changes. A fleet management consultant,  one of the experts we interviewed, told us that his company has  previously recommended working capital funds to help agencies better  manage the vehicle replacement cycle. Similarly, a county-level fleet  manager we interviewed reported that without its working capital fund, the  county might not be able to replace vehicles at the optimal time due to  budget constraints.
USDA’s Forest Service and Interior’s Bureau of Land Management are  the two agencies within the scope of this review that have a working  capital fund. Officials from these agencies said that a steady stream of  available capital helped them to replace vehicles on schedule and avoid a  fleet that needed excessive maintenance.recommended that agencies should operate their fleets using a revolving  fund or similar mechanism that allows them to capture all vehicle costs  and provides them with the means to replace their vehicles in a timely  manner. However, an agency must have statutory authority to establish  such a fund. Moreover, even among agencies that possess the legal  authority to establish a working capital fund, other hurdles may exist. For  example, officials from Interior’s National Park Service stated that while  having a working capital fund could be advantageous and Interior  possesses the legal authority to establish such a fund in any of its   In addition, in 2004 GSA  agencies, start-up costs are a substantial barrier, as are issues related to  fund administration.
The Air Force has programmed mission needs at every installation into an  algorithm that allows decision-makers to see the “ripple effects” of specific  funding changes. Officials stated that although funding may still be cut, it  is done strategically and with the lowest overall impact on mission  performance or with full knowledge of the consequences. Similarly, DHS’s  Customs and Border Protection has drafted a strategic plan that  considers costs, benefits and resource availability to achieve prioritized  goals, and an accompanying implementation guide to measure progress.  One expert we interviewed suggested that having data and analysis to  demonstrate the specific outcomes of funding changes will help to ensure  that decisions regarding cuts or re-allocation are made with full  knowledge.
section_title: Having Fleet Management as a Collateral Duty Makes Developing Expertise More Difficult
paragraphs: Officials of four agencies also noted that ensuring that fleet managers  consistently possess adequate expertise can be a challenge. The majority  of agencies we examined reported that fleet management is a part-time  task for some of their managers, which can make it difficult to develop  fleet expertise. Officials from these agencies said that fleet managers can  be responsible for various tasks beyond their fleet duties, such as  property management. Officials from three agencies explained that in  rural, remote locations it is not cost-effective to pay for a full-time fleet  manager since the fleet is smaller than in more metropolitan areas.They also cautioned that being part-time does not automatically indicate a  lack of expertise in fleet management. However, some officials also  agreed that when an employee only commits a portion of work hours to  fleet management it can be more difficult to manage the fleet, and it can  be challenging to consistently train a cadre of part-time workers located in  remote areas. Officials from Interior’s Fish and Wildlife Service, for  example, said that the challenge of training numerous, part-time  employees has become particularly evident as the agency tries to  implement Interior’s new FMIS. Similarly, officials from USDA’s Forest  Service reported that it is challenging to establish and maintain expertise  in an environment where responsibilities are divided among multiple  employees in different locations. Moreover, two agencies reported that it  is challenging to retain the expertise already possessed. For example, Air  Force officials explained that there is high demand for knowledgeable  fleet managers in the private sector, and the challenges associated with  deployment coupled with pay differences can make it hard to retain skilled  fleet managers. Similarly, officials of DHS’s Customs and Border  Protection told us that some managers have moved on to another job  after they were trained.
Agencies use varying approaches to enhance the expertise of their fleet  managers. Approaches differ even among agencies within the same  department. For example, within DHS, Customs and Border Protection  has a specific training program for fleet managers, while Immigration and  Customs Enforcement provides fleet management training on an as- needed basis. Officials from each of these agencies expressed that they  believed their training policies met their specific needs. Below are a few  strategies that various agencies have pursued to address the challenge of  developing consistent fleet management expertise:
Sending personnel to the annual GSA conference: Officials from  several agencies reported that the annual FedFleet conference  hosted by GSA was a valuable tool for developing and maintaining  expertise. Some found the conference useful for teaching core skills,   and others said it provided updates on the latest practices to  experienced managers.
Online training and tools: The Army Corps provides an online  toolbox that contains information on fleet management requirements  and internal processes. Similarly, Interior’s Fish and Wildlife Service  provides online fleet management training, and National Park Service  has established an online fleet management portal that provides a  variety of resources, including virtual training.
Communication and collaboration strategies to share specialized  knowledge: Officials from Interior’s Fish and Wildlife Service reported  that regional offices and the program management offices collaborate  on decisions involving heavy fleet equipment because the program  offices have expertise in that area.
Consolidation of fleet functions and expertise: Air Force is in the  process of transferring its fleet functions to one office. Air Force  officials explained that although the transfer is complex and multi- staged, the consolidation will allow for enhanced fleet management.  USDA’s Forest Service is also actively seeking ways to reduce the  number of personnel with part-time fleet responsibilities. Forest  Service officials explained that they recently conducted a study which  indicated that fleet performance could be improved if they reduced  fragmentation of personnel, and are currently deciding how to  consolidate some fleet duties. In April 2013, USDA’s Natural  Resources Conservation Service began piloting a centralized, national  fleet management team to consolidate fleet functions and expertise,  and minimize collateral fleet management duties.
section_title: Conclusions
paragraphs: Understanding where agencies might improve fleet management  practices can inform ways to achieve fleet savings across agencies and  address recent concerns about the size and cost of the federal fleet.  Specifically, fleets should be well managed to provide appropriate and  reliable transportation at the least cost, while meeting agency missions  and achieving petroleum and greenhouse gas reduction goals. Complete  data and well-designed FMISs are essential for the management of  federal fleets. Most of the agencies that we reviewed lack the complete  fleet data, particularly cost data, and some lack the integrated fleet data  systems that would facilitate the analyses, such as life-cycle cost  analysis, necessary to support sound fleet decision making. The steps  these agencies are taking to improve data collection and system  integration have the potential to improve their ability to access and  analyze data related to fleet management, including their ability to capture  and analyze life cycle costs. We are not making a recommendation to  these agencies because of the actions they are currently undertaking,  although it is too soon to tell if these actions will successfully address the  issues we have identified.
While these agencies are making some progress in improving their data  systems, some have not yet developed an approach for estimating  indirect costs that are attributable to fleet management. Calculating  indirect costs—such as costs for staff, facilities, and equipment—can be a  challenge for some agencies when only a portion of these costs is  attributable to fleet management. Current GSA fleet management  guidance does not include a methodology to calculate these indirect  costs. While developing such a method would only be one part of an  agency’s overall efforts to improve agency cost data to inform investment  decisions, it is a necessary step. By not fully tracking and analyzing total  fleet costs, including such indirect costs, some agencies may not have full  cost information with which to analyze life-cycle costs and make cost- effective investment decisions, such as decisions about whether to lease  or purchase vehicles, and may not be able to fully monitor and report on  fleet costs.
Determining the number and types of vehicles truly needed by  agencies—based on a thorough analysis of vehicle utilization, mission  needs, and alternatives—also holds the potential for cost savings. The  agencies in this review have made progress in determining their optimal  fleet inventories and have set targets and developed plans for achieving  these optimal inventories. However, GSA’s lack of information on the  methods agencies used in producing their targets limits its ability to  identify and recommend opportunities for improvement, which could  perhaps lead to additional fleet cost savings.
section_title: Recommendations
paragraphs: To help improve fleet management, we recommend that the Administrator  of GSA take the following two actions.  1.  Develop and publish guidance for agencies on estimating indirect  costs attributable to fleet management to help ensure that agencies  have complete and accurate cost data.  2.  Request that when agencies submit their annual updates on their fleet  optimization targets, they provide GSA information and supporting  documentation on the methods that they used to produce their  targets.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Acting Administrator of GSA and  to the Secretaries of Agriculture, Defense, Homeland Security, Interior,  and Veterans Affairs for review and comment. In commenting on this  draft, GSA noted that it agreed with our findings and recommendations  and that it intends to carry out the recommendations. DHS and the  Department of Defense provided comments that included additional  information on efforts they are taking to improve fleet management,  especially systems for maintaining fleet data. GSA’s, DOD’s, and DHS’s  comments are reprinted in appendices III, IV, and V, respectively. In  addition, DHS, USDA, and VA provided technical comments, which we  incorporated as appropriate. Interior did not have any comments on this  report.
We are sending copies of this report to interested congressional  committees; the Secretaries of Agriculture, Defense, Homeland Security,  Interior, and Veterans Affairs; and the Administrator of GSA. In addition,  this report will be available at no charge on GAO’s website at  http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202)512-2834 or Flemings@gao.gov. Contact points for our Office  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made major contributions to this report  are listed in appendix VI.
section_title: Appendix I: Scope and Methodology
paragraphs: We assessed the extent to which the following agencies use leading  practices to manage their fleets, including the size and costs of these  fleets: the Departments of Agriculture (USDA), Interior (Interior),  Homeland Security (DHS), and Veterans Affairs (VA), and the United  States Air Force (Air Force) and the United States Army Corps of  Engineers (Army Corps) within the Department of Defense. Collectively,  these agencies account for about 46 percent of the roughly 450,000  civilian and non-tactical military vehicles maintained by the federal  government (excluding the U.S. Postal Service). When selecting these  agencies, we considered both military and civilian agencies with fleets of  more than 5,000 vehicles. We looked for variation in fleet characteristics,  including: age of passenger vehicles, change in fleet size from 2005- 2011, and change in fleet composition (owned versus leased) from 2005- 2011, to ensure that we selected agencies with a range of fleet  characteristics. We eliminated agencies that had been the subject of a  fleet-related audit within the past 2 years, with the exception of agencies  covered in a recent report that stemmed from the same Congressional  request as this review. We considered those agencies to provide  continuity of information. To select agencies for our review and to  describe changes in selected agencies’ fleet inventories over time, we  relied on data in GSA’s Federal Fleet report and on additional data  provided by the agencies. We assessed the reliability of this data by  reviewing program documentation and quality assurance tests and  discussing data elements with GSA and agency staff responsible for  these data and found the data sufficiently reliable for these purposes.
Within USDA, Interior, DHS, and VA, we selected the subagencies with  the largest fleets and selected a sufficient number of subagencies to  account for at least two-thirds of each agency’s non-tactical fleet.  Consequently, in USDA we reviewed the Natural Resources  Conservation Service and Forest Service; in DHS we reviewed U.S.  Customs and Border Protection and Immigration and Customs  Enforcement; in Interior we reviewed the National Park Service, Fish and  Wildlife Service, and Bureau of Land Management; and in VA we  reviewed the Veterans Health Administration. Within these four  departments, we focused most of our work on these subagencies’  management of their fleets, except in areas where the department level  has primary responsibility, such as in reporting to GSA on department- wide optimal fleet inventories. Specifically, except where noted, we  focused our work on fleet management practices, such as the collection  and analysis of fleet cost data, of these eight subagencies as well as the  Air Force and Army Corps. Throughout this report, we refer to these  subagencies and their departments as well as to the Air Force and Army  Corps as “agencies.”
To identify leading fleet management practices, we interviewed  recognized fleet management experts from consulting companies and  private, local government, and nonprofit entities as well as  representatives of fleet management associations. We identified fleet  management experts by determining if they met more than one of the  following criteria: (1) winner of a fleet management award such as those  sponsored by the American Public Works Association, (2) spoke at or  organized a relevant fleet management conference such as GSA’s  FedFleet conference or the Government Fleet Expo and Conference, (3)  served as a previous GAO expert, and (4) recommended by other fleet  management experts. We interviewed 9 experts, including 2  representatives of fleet management consulting companies, 3 public  sector fleet managers, one private sector fleet manager, one fleet  manager from a nonprofit, and representatives of 2 fleet management  professional associations. These experts include:  Private, Public, and Nonprofit Fleet Managers
Two fleet managers for cities with approximately 3,000 and 500  vehicles and pieces of equipment respectively (Portland, Oregon and  Troy, Michigan)
One fleet manager for a County with 1,800 vehicles (Hillsborough  County, Florida)
One private sector fleet manager overseeing more than 4,000  vehicles
One fleet manager for a nonprofit overseeing more than 12,000
Automotive Fleet and Leasing Association
National Association of Fleet Administrators  We compared practices these experts identified to legal requirements and  GSA and Office of Management and Budget guidance related to fleet  management. We also obtained the views of GSA officials on these  leading practices. Based on the frequency with which practices were  identified, as well as our professional judgment, we synthesized this  information into a set of leading practices against which we compared  agency practices. These leading practices are: (1) maintaining a well- designed fleet management information system, (2) analyzing life-cycle  costs to inform investment decisions, and (3) optimizing fleet size and  composition.
To determine the extent to which the selected federal agencies use  leading practices to manage their fleets, including the size and cost of  these fleets, we reviewed agency fleet management policies, procedures,  plans, and other documentation on their fleet management practices and  conducted interviews with fleet management officials at these agencies.  We also developed a structured questionnaire sent to each agency  regarding whether or not they have a fleet management information  system (FMIS), the types of data that are maintained in their FMIS,  whether their FMIS is integrated with property and financial management  systems, and the efforts under way or planned to improve system  integration and fleet data collection. We used the questionnaire  responses, as well as supporting information gathered during interviews,  to determine if an agency maintained an FMIS and if so, whether it stored  all, some or none of the data elements recommended by GSA in that  system. We used the information provided by agencies, such as the  process that agencies follow in making decisions about whether to own or  lease vehicles, to determine if agencies analyze total life cycle costs for  their investment decisions. We also used information provided by  agencies to determine how agencies are optimizing their fleet size and  composition. As part of our review of fleet size and composition, we  examined agencies’ assignments of home-to-work vehicles and large or  non-alternative fuel executive vehicles. These assignments are discussed  in appendix II.
To identify challenges these agencies face in managing their fleets and  strategies they use to address these challenges, we interviewed agency  fleet managers from our selected agencies. We also obtained the views  of GSA officials and fleet experts about these challenges and strategies.  We analyzed these interviews to identify the challenges that agency fleet  managers identified the most often and the strategies most frequently  identified to address these challenges.
We conducted this performance audit from July 2012 to July 2013, in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Home-to-Work and Executive Vehicle Assignments of Selected Federal Agencies
paragraphs: The agencies we covered all have procedures in place to determine, on a  case-by-case basis, whether the assignment of home-to-work vehicles is  justified based on mission. Of these agencies, DHS’s Customs and  Border Protection and Immigration and Customs Enforcement and  Interior’s National Park Service have the largest number of home-to-work  vehicles. (See table below.) These vehicles are generally assigned for  purposes of law enforcement duties and field work, such as patrolling the  U.S. border and conducting and performing immigration law enforcement  activities and field-level audit work. Agencies we reviewed have home-to- work policies in place at the department level, or have established  policies at the agency or regional/local level establishing permissible uses  of home to work vehicle assignments. For example, the National Park  Service property management handbook states that all home-to-work  vehicle assignments must be authorized by the Secretary of the Interior,  and that monitoring of the use of home-to-work vehicles be monitored at  the local level so long as an authorization is in effect. DHS home to work  policy also requires a log be maintained to ensure use is for official  purposes only, that a detailed analysis of proposed costs associated with  home-to-work use be provided, and that these vehicles assignments be  certified annually to the DHS Office of the Chief Administrative Officer.
The President’s May 2011 memorandum to federal agencies on their fleet  management directed, among other things, that agencies post on their  respective websites the number of vehicles assigned to agency  executives that are larger than a mid-size sedan or do not use alternative  fuel. Of the agencies we reviewed, DHS’s Customs and Border  Protection and Immigration and Customs Enforcement and USDA’s  Natural Resources Conservation Service have the largest number of such  vehicles: 49, 20, and 20, respectively. In 2012, GSA noted that DHS as a  whole retains a very large executive fleet of 90 luxury sedans and large  sport utility vehicles and recommended a reduction in the size of this fleet  and in the size of the assigned vehicles. In response, DHS stated that  when their executive vehicles are up for replacement, they will closely  examine the need for each, and, if still needed for mission purposes, it  would consider replacing them with smaller, more fuel-efficient vehicles.Other agencies we reviewed maintain smaller fleets of such executive  vehicles that are either large or not alternative fuel vehicles, ranging from  zero to 14.
section_title: Appendix III: Comments from the General Services Administration
section_title: Appendix IV: Comments from the Department of Defense
section_title: Appendix V: Comments from the Department of Homeland Security
section_title: Appendix VI: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Susan A. Fleming, 202-512-2834.
section_title: Staff Acknowledgments
paragraphs: In addition to the contact above, Judy Guilliams-Tapia (Assistant  Director), Maria Edelstein, Kieran McCarthy, Alison Hoenk, Steve  Rabinowitz, Russell Burnett, Tim Guinane, Josh Ormond, Crystal Wesco,  and Colin Fallon made key contributions to this report.