Defense Travel System: Overview of Prior Reported Challenges Faced by DOD in Implementation and Utilization
Published: 2008-04-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
section_title: What GAO Found
paragraphs: 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.

section_title: Letter
paragraphs: Thank you for the opportunity to discuss our two reports and related  testimonies 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. 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.
My testimony today is based on our prior reports and testimonies 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.
subsections: section_title: Background
paragraphs: 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. On       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.  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.
section_title: DTS Faced Numerous Challenges
paragraphs: Our reports and testimonies 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 underutilization. Our January 2006 and September 2006  reports 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  DTS Voucher Analysis Model 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 reported 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  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 testimony 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.
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 reports 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,  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 2006 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  analyzed 15 domestic GSA city pairs, 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 report related to the testing of DTS.
Validity of economic analysis. As noted in our September 2006  report, 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  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. 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  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. The article was not based on  information related to DTS, but rather on the experience of one   private-sector company.
section_title: Streamlining DOD Travel Processes
paragraphs: As noted in our January 2006 report, 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.
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  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. 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, 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.
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. 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.
section_title: Concluding Remarks
paragraphs: 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.
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.
section_title: Contacts and Acknowledgments
paragraphs: 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.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. It may be reproduced and distributed in its entirety without further  permission from GAO. However, because this work may contain copyrighted images or  other material, permission from the copyright holder may be necessary if you wish to  reproduce this material separately.