Federal Acquisition: Increased Attention to Vehicle Fleets Could Result in Savings
Published: 2004-05-25T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Federal agencies spend about $1.7 billion annually to operate a fleet of about 387,000 vehicles. During the last decade, concerns have been raised about whether agencies have more vehicles than they need. In an April 2002 letter to federal agencies, the Office of Management and Budget stated that the size of the federal fleet seemed excessive. GAO was asked to determine (1) the extent to which agencies ensure that their fleets are the right size to meet agency missions, (2) whether potential savings could result from the disposal of unneeded vehicles, and (3) what actions are being taken on a governmentwide basis to improve fleet management practices. GAO focused its review on the justification for acquiring and retaining vehicles at the Departments of Agriculture, Army, Homeland Security, Navy, and Veterans Affairs.
section_title: What GAO Found
paragraphs: Because of a lack of attention to key vehicle fleet management practices, the agencies GAO reviewed cannot ensure their fleets are the right size or composition to meet their missions. Industry practices for cost-efficient fleets include the development of utilization criteria related to the mission of a vehicle and periodic fleet assessments using these criteria to determine the appropriate fleet size and composition. If unneeded vehicles are identified, they are disposed of. However, the agencies GAO reviewed have not established policies that contain clearly defined utilization criteria that would allow them to determine the number and type of vehicles they need. Further, agencies are not routinely conducting periodic fleet assessments. Two agencies, the Navy and the Forest Service within the Department of Agriculture, conduct assessments; however, these assessments are either inconsistently applied or the results are not enforced. Some agencies have begun to recognize the need to revise their guidelines to provide better criteria for determining their vehicle needs. GAO's work and reviews by inspectors general identified numerous instances where agencies were retaining vehicles they did not need, with potential savings ranging from thousands to millions of dollars if these vehicles were eliminated. For example, the Department of the Interior's Inspector General reported that a significant portion of the department's 36,000 vehicles were underutilized and estimated savings of $34 million annually if these vehicles were disposed of. GSA's Office of Governmentwide Policy and the Office of Management and Budget have recently taken a number of actions to require agencies to better manage and improve the cost-efficiency of their fleets. The Office of Governmentwide Policy is currently revising the Federal Management Regulation to require agencies to (1) appoint a central fleet manager with control over all aspects of fleet management, including fleet budgets, which are now generally controlled at the local level; (2) establish utilization criteria and periodically review fleet size; and (3) fund a fleet management information system. The Office of Governmentwide Policy plans to work in a cooperative effort with agencies to implement the revised regulation. However, based on discussions with officials from the agencies GAO reviewed, GAO anticipates that GSA will face opposition to its requirement for centralized budget control over the fleets. In 2002, the Office of Management and Budget began requiring agencies to report, as part of their budget submissions, the size, composition, and cost of their fleets for the current year and to project costs for the next 3 fiscal years.

section_title: Letter
paragraphs: Federal agencies spend about $1.7 billion annually to acquire, operate, and  maintain a fleet of about 387,000 trucks, passenger vehicles, and other  vehicles, such as ambulances and buses. These vehicles can be leased  from the General Services Administration (GSA) or commercial companies  or purchased by the agency. According to GSA data, the size of the federal  fleet has remained fairly constant over the last 6 years. However, during  the last decade, concerns have been raised about whether agencies are  acquiring more vehicles than they need to meet their missions. These  concerns culminated in an April 2002 letter to federal agencies, in which  the Director of the Office of Management and Budget (OMB), stated that  the size of the federal fleet seemed, in many cases, to be excessive and  that significant reductions may be in order.
You asked us to determine (1) the extent to which agencies ensure that  their fleets are the right size to meet agency missions, (2) whether  potential savings could result from the disposal of unneeded vehicles, and  (3) what actions are being taken on a governmentwide basis to improve  fleet management practices. We conducted our work at the Departments  of Agriculture, Army, Navy, Homeland Security, and Veterans Affairs; all of  which account for about 200,000 vehicles, or about 53 percent of the  federal government’s fleet. Within the Department of Veterans Affairs, we  focused on the Veterans Health Administration because it is responsible  for agencywide fleet management. Within Agriculture, we focused our  review on the Forest Service, Natural Resources Conservation Service  (NRCS), and Animal and Plant Health Inspection Service (APHIS), which  account for about 75 percent of Agriculture’s vehicles. Because the  Department of Homeland Security (DHS) was formed only recently and its  various organizational elements are currently operating under fleet  policies from their legacy agencies, we limited our review to the actions  the department is taking to leverage its buying power when acquiring  vehicles and to develop departmentwide fleet management guidelines. We  interviewed officials and analyzed information provided by these agencies,  as well as GSA and OMB. We focused our work on agencies’ justifications  for acquiring and retaining vehicles and did not assess their vehicle  operation, maintenance, or disposal practices. We also talked with  representatives from private industry who are familiar with efficient fleet  management practices. A detailed discussion of our scope and  methodology is in appendix I. We conducted our review from September  2003 to April 2004 in accordance with generally accepted government  auditing standards.
subsections: section_title: Background
paragraphs: The size and cost of operating the federal vehicle fleet has been a subject  of concern for many years. In 1986, Congress enacted legislation that  required agencies, among other things, to collect and analyze the costs of  their motor vehicle operations, including acquisition decisions, in order to  improve the management and efficiency of their fleets and to reduce  costs. Two years later, we reported that most agencies had not conducted  the required studies. In 1992, an interagency task force identified obstacles  to cost-efficient fleet management, including the continued lack of  compliance with the 1986 legislative requirements, and stated that  agencies lacked basic information to effectively and efficiently manage  their fleets. In 1994, we reported, among other things, that successful fleet  practices included oversight at the headquarters level to ensure that  uniform written policies and guidance are provided throughout the  organization and fleet management information systems to provide  accurate data about the fleet. We also reported that agencies need to  conduct periodic reviews to ensure their fleets are the right size and  composition.
The vehicle fleets at the agencies we reviewed are widely dispersed. For  example, the Army and Navy operate vehicles throughout the world, while  the Veterans Affairs fleet is spread across medical centers, national  cemeteries, and other locations throughout the country. The approximate  number of vehicles operated by the agencies included in our review is  shown in figure 1.
The Office of Governmentwide Policy within GSA develops policies,  disseminated through the Federal Management Regulation, and bulletins  for agency vehicle fleet management. Federal agencies, however, are  responsible for managing their own fleets, including making decisions  about the number and type of vehicles they need and how to acquire them.  OGP also collects data from agencies via the Federal Automotive  Statistical Tool (FAST) concerning fleet size, composition, and costs.  Although GSA uses these data in annual reports to OMB on the  government’s fleet size and costs, GSA officials told us that much of the  data are inaccurate because of the different systems agencies use to  collect and report information.
section_title: Fleet Management Attention Is Needed to Ensure That Fleets Are the Right Size and Composition
paragraphs: The agencies we reviewed cannot ensure that their vehicle fleets are the  right size and composition to meet their missions because of a lack of  attention to key fleet management practices. In particular, agencies  generally have not established policies with clearly defined utilization  criteria related to the mission of a vehicle to ensure that decisions to  acquire and retain vehicles are based on a validated need. In addition,  agencies have not implemented periodic assessments to determine  whether they have the right number and type of vehicles in the fleet. Some  agencies have begun to recognize the need to pay more attention to fleet  management and are taking steps to review their guidelines in an effort to  provide better criteria to determine vehicle needs and to manage their  fleets more efficiently.
subsections: section_title: Agency Policies Do Not Define Mission-Related Utilization Criteria and Fleets Are Not Periodically Assessed
paragraphs: Industry practice for cost-efficient fleets includes establishing policies and  procedures that contain clearly defined utilization criteria related to the  mission of a vehicle. These criteria are then used to conduct periodic  assessments of the fleet to identify underutilized vehicles. As previously  noted, our 1994 report highlighted the importance of these fleet  management practices. However, as shown in figure 2, most of the  agencies we reviewed do not have clearly defined criteria and have not  conducted periodic fleet assessments. We did not include DHS in this  chart because the agency is still developing most of its fleet management  guidelines, policies, and vehicle utilization standards.
The lack of appropriate utilization criteria means that local level  officials—who usually make the decisions to acquire and retain vehicles— are not basing their decisions on a validated need. Some agencies establish  the number of miles traveled, such as the 12,000 miles per year in GSA’s  guidance, as a criterion to measure vehicle utilization. However, this  criterion is not appropriate for the mission of some vehicles, such as those  used for utility work, medical transportation, or security. Therefore,  agency officials often ignore mileage standards. None of the agencies  assigned a value to other criteria, such as number of trips per day or hours  on station, to measure vehicle use when mileage is not an appropriate  measure.
Following are some examples of cases we found where the application of  specific criteria related to the mission of a vehicle would give local fleet  managers a more accurate basis on which to make decisions about  fleet size:    At one Veterans Affairs medical center, vehicles are used to transport  veterans from their homes to outpatient rehabilitation activities in a  metropolitan area outside of Boston. Veterans Affairs officials told us that  using only a mileage standard to justify the need for the vehicles is  inappropriate because they are used within a confined area. The officials  agreed that a better measure would be the number of trips or the number  of veterans served.
The Department of Defense prescribes that the military services establish  utilization measures, such as passengers carried or hours used, to measure  the need for a vehicle when mileage is not appropriate. However, neither  Army nor Navy guidelines incorporate these types of utilization criteria.
Natural Resources Conservation Service policy includes only one criterion  to establish fleet size, which is a ratio of employees to vehicles. The  definition of employees includes full- and part-time employees and  volunteers, regardless of roles or job description.
Further, agencies generally do not conduct periodic assessments of their  fleets. Decisions about whether to acquire and retain vehicles are made at  the local level with little or no headquarters oversight. These local-level  decisions are frequently based on the availability of funds rather than on a  validated need. For example, directors of Veterans Affairs medical centers  and state conservationists at the Natural Resources Conservation Service  determine whether or not to acquire vehicles based on the availability of  funds. The Army allows local commanders to acquire vehicles with  available funds without further justification within established allocation  levels. However, these levels have not been reviewed since 1991, 13 years  ago.
The Navy and the Forest Service conduct periodic assessments of fleet  size, but the results of the assessments are either not enforced or not  conducted in a systematic manner. The Navy’s Transportation Equipment  Management Centers (TEMC) conduct utilization assessments to  recommend fleet inventory levels for Navy commands, yet the commands  are not required to implement the recommended inventory levels. The  Forest Service’s guidelines contain instructions for a systematic review of  vehicle utilization at local sites, but these reviews are not consistently  performed at the locations we visited, and the local sites are not required  to report the results of the reviews to agency headquarters.
section_title: Some Agencies Are Taking Steps to Improve Fleet Management Practices
paragraphs: Some agencies have begun to focus more attention on fleet management  practices that they believe will improve the efficiency of their fleets. At the  start of fiscal year 2004, the Army and Navy reorganized to centralize the  management of facilities and equipment, including vehicles that are not  related to combat forces, at various commands and installations. The Navy  established the Naval Installations Command and the Army established the  Installation Management Agency for this purpose. Navy and Army officials  told us that these organizations should result in increased attention to fleet  management, including the enforcement of the TEMCs’s recommended  inventory level in the Navy and the revision of outdated vehicle allocation  levels in the Army. Officials told us that these organizations will provide  more centralized oversight of the Army and Navy vehicle fleets, but  individual commands will continue to determine the need for vehicles  within the established inventory objectives or allocation levels. At the time  of our review, it was too early to determine the impact these  reorganizations will have on improving fleet management practices.
In addition, some agencies are reviewing their guidelines in an attempt to  include more specific requirements for fleet management. For example,  Veterans Affairs officials told us that they are developing a vehicle manual  with detailed guidance on how to measure utilization and hope to issue it  in the fall of 2004. Department of Defense officials are in the process of  revising the department’s guidelines and are considering requiring the  application of utilization criteria tied to the mission of a vehicle to  determine the need for vehicles. In early 2003, DHS established a Fleet  Commodity Council to review strategic sourcing issues, including how the  department can leverage its purchasing power when acquiring vehicles.  The council, made up of agency fleet managers, meets quarterly. In  addition, departmentwide fleet management policies and guidelines are  being developed and will include criteria for justifying and assessing  vehicle fleet sizes.
section_title: Opportunities Exist to Dispose of Underutilized Vehicles and Realize Potential Savings
paragraphs: Our work and reviews by inspectors general identified numerous instances  where agencies had an excessive number of vehicles in their fleets. If  these vehicles were disposed of, agencies could realize savings ranging  from thousands to millions of dollars, as illustrated in the following  examples:  In February 2004, the Department of the Interior’s Inspector General  reported that a significant portion of the department’s fleet of  approximately 36,000 vehicles is underutilized and estimated savings of  $34 million.
At the end of fiscal year 2003, Navy reviews of selected activities estimated  fleet savings of $3.7 million per year if installations reduced their fleets  based on recommendations from these reviews.  In 2003, a U.S. Army Audit Agency report identified one Army garrison that  had retained 99 excess vehicles in its fleet.
A 2001 Veterans Affairs’ Inspector General report noted that accountability  over the department’s owned vehicles at a medical center could not be  reasonably assured. For example, agency auditors found one vehicle that  had been parked behind a laundry facility and had not been moved since it  was purchased in 1997. The report described the acquisition of the vehicle  as unjustified.
Appendix VII contains additional examples of reports that highlight  potential savings if unnecessary vehicles were eliminated from agencies’  fleets.
In other cases, locations have reduced their fleet size—primarily because  of pressure to cut their budgets—and consequently realized savings, as  illustrated in the following examples:     A Navy command decreased its fleet from 156 to 105 vehicles over the  course of a year, resulting in savings of about $12,000 per month. A Navy  official explained that the decrease in vehicles was driven by cuts in the  command’s budget.
A Veterans Affairs medical center, in an effort to find potential savings,  reduced its fleet by 12 vehicles, with estimated savings of about $57,000  per year.  In the 1990s, a Forest Service region eliminated 500 leased vehicles when  the agency reduced its workforce due to budget reductions, according to a  regional official.
However, because these reductions were not based on the application of  utilization criteria to identify vehicle needs, there is no guarantee that the  fleets are the right size to meet the agencies’ missions.
Industry practice for cost-efficient fleets also calls for an assessment of  the type of vehicles being acquired. Savings can be realized by changing  the composition of the fleet—buying vehicles that are less expensive and  less costly to operate and maintain. We found cases where local level  officials had taken this step. For example, in assessing the need for  vehicles to expand community outreach services, program officials at a  Veterans Affairs medical center are replacing 15 passenger vans with less  expensive sedans and minivans that will still allow them to accomplish the  program’s goals. In another case, a local Navy fleet manager was able to  help a security organization reduce its fleet costs by using less expensive  trucks for carrying dogs used by law enforcement officials.
section_title: Governmentwide Initiatives to Improve Fleet Management Practices
paragraphs: As a result of a review of governmentwide fleet practices, GSA’s Office of  Governmentwide Policy (OGP) and OMB are taking actions to require  agencies to better manage and improve the cost-efficiency of their fleets.  In 2002, OGP initiated a review of federal agencies’ fleet management  practices in cooperation with OMB. Twenty-one agencies responded to a  GSA survey, which found, among other things, that the vast majority of  agencies lack utilization criteria by which to determine vehicle needs and  identify underutilized vehicles. The survey further found that many  agencies have little control over fleet budgets and allocation levels for  vehicles and lack effective fleet management information systems. Based  on the survey results, OGP is currently revising the Federal Management  Regulation to require agencies to improve fleet management practices by,  among other things, (1) appointing a central fleet manager, (2) periodically  reviewing fleet size, and (3) funding a fleet management information  system.
In 1994, we reported that the primary role of a central fleet manager is  to establish and monitor written policies, collect and analyze fleet data,  and look for opportunities to improve fleet operations. OGP officials  believe that effective fleet management requires centralizing control at  the headquarters level over all decisions related to fleet size. Thus,  OGP will require agencies to appoint a senior management official with  decision-making authority and control over all aspects of the agency’s  fleet program, including the entire fleet budget and approval of local-level  decisions. However, we anticipate strong opposition to this requirement,  based on our discussions with agency officials outside of GSA. Many of the  headquarters officials we interviewed believe that local-level fleet  managers, given the right tools, are in the best position to make decisions  on the need for vehicles and that centralized oversight, rather than control  over the budgets and decision making, would be more appropriate.
The revised regulation will also require agencies to develop criteria against  which to evaluate the need for vehicles and to use these criteria in  performing annual fleet assessments. OGP officials told us that the  regulation will not include examples of the different criteria that could be  used to determine vehicle needs. Instead, this type of information will be  incorporated in GSA bulletins issued periodically to agencies and posted  on the GSA Web site. Based on the results of the 2002 survey, OGP had  planned to recommend that agencies base their decisions about the need  for vehicles on a staff-to-vehicle ratio; however, officials told us they will  require agencies to consider other measures more appropriate to a  vehicle’s mission. As discussed above, industry practices include  establishing multiple utilization criteria, such as mileage, number of trips  per day and hours on station, because of the differing nature of  agency missions.
OGP further intends to require agencies to fund a fleet management  information system that would allow them to accurately collect  information on the cost to acquire, operate, and maintain their fleets.  This initiative will allow agencies to better forecast fleet funding and make  well-founded decisions about when to replace vehicles. OGP plans to issue  guidelines defining the minimum functional requirements for the system.  Officials we spoke with at Defense, DHS, and Veterans Affairs stated that  they believe that developing a fleet management system is important, but  they are at varying stages of exploring options, requesting bids from  contractors, and requesting funding.
While OGP believes it has the authority to require agencies to follow its  regulation and guidelines, enforcement will be another matter. OGP  officials plan to work with agencies in a cooperative effort, through  workshops and federal fleet conferences, to help them implement the  requirements in the upcoming regulation, which they expect to issue in  October 2004. They are also considering issuing “report cards” on the  progress agencies are making in implementing and following the revised  regulation.
OMB has also taken steps to hold agencies accountable for more effective  fleet management practices. In 2002, OMB began requiring agencies, as  part of their budget submission, to report the size, composition, and  cost of their fleets for the current year and to project costs for the next  3 fiscal years. The narrative in the report must also detail the reasons for  any significant changes in fleet size, discuss the methodology used to  assign vehicles, and identify any impediments to managing the fleets.  Recognizing the difficulties with collecting reliable data, GSA and OMB  plan to work with agencies to improve their data collection and reporting.  Officials believe that as agencies move to better fleet management  information systems, the data will improve.
section_title: Conclusions
paragraphs: Despite long-standing concerns over the size of the federal fleet, the  agencies we reviewed still do not know if their fleets are the right size and  composition. Until agencies develop and apply utilization criteria tied to  the mission of the vehicles in their fleets, they will not know how many  vehicles they need to meet their missions. Moreover, by not using such  criteria to assess their fleets periodically, agencies are missing the  potential opportunity to identify excess vehicles, reduce their fleets, and  save money. While some agencies have started to take actions to improve  fleet management, at this time it is unclear how successful these efforts  will be in providing more efficient fleet management. Because of its role in  providing fleet management policy, GSA’s Office of Governmentwide  Policy is in a position to take the lead in assisting agencies to develop  appropriate utilization criteria and to assess their fleet size and  composition. That office, in conjunction with OMB, has taken steps to  focus attention at a governmentwide level on the need to improve fleet  management practices. However, the plan to require agencies to centralize  budget control over their fleets is a contentious one, and it remains to be  seen how agencies will respond once the draft regulation is issued. In the  meantime, additional measures are needed to ensure that the federal  government’s fleet does not contain excessive numbers of vehicles.
section_title: Recommendations for Executive Action
paragraphs: To help agencies determine the appropriate size and composition of their  fleets, we recommend that the Administrator of GSA direct the Office of  Governmentwide Policy to include in the revised Federal Management  Regulation the following two requirements for agencies    develop utilization criteria related to the missions of the vehicles and     conduct periodic assessments of the number and type of vehicles in their  fleets using these criteria.
To bring further attention to the potential budget impact of retaining  excessive vehicles, we recommend that the Director of OMB require  agencies, as part of the new reporting requirement in their budget  submissions, to report on (1) the criteria they used to determine the need  for vehicles and (2) the results of fleet assessments they have conducted.
To ensure that agency fleets are the right size and composition to meet  their missions, we recommend that the Secretaries of the Departments of  Agriculture, Defense, Homeland Security, and Veterans Affairs take the  following three actions    establish guidance and policies that include clearly defined utilization  criteria to be used in validating the need for vehicles based on their  missions;  require fleet managers to use these criteria in determining the need for  vehicles and in conducting periodic fleet assessments; and    establish effective oversight mechanisms to ensure that the utilization  criteria are defined and fleet assessments are carried out.
section_title: Agency Comments and Our Evaluation
paragraphs: We received written comments on a draft of this report from GSA and the  Departments of Agriculture, Defense, Homeland Security, and Veterans  Affairs, and we received oral comments from OMB. All of the agencies  generally concurred with our findings and recommendations. The written  comments are reproduced in appendixes II through VI.
GSA noted that the primary contributor to the lack of progress in fleet  management improvement has been the absence of strong management  support for fleet reform and the consequent lack of resources for acquiring  management information systems. GSA observed, however, that many  agencies are becoming more aware of these issues. GSA also noted that  although our report discusses three revisions to the Federal Management  Regulation that GSA is in the process of drafting, these three revisions are  part of a comprehensive package of 10 recommendations for fleet  management reform that came out of GSA’s Federal Fleet Review  Initiative. We focused our review on the key revisions directly related to  the justification for acquiring and retaining vehicles. GSA also stated that,  while it agrees that local managers are best qualified to know their  requirements, only a central manager can provide the consistent oversight,  policy, and budget review that has been lacking in many agencies, and it is  this deficiency GSA seeks to address by its requirement that each agency  appoint a senior management official with decision-making authority and  control over all aspects of the agency’s fleet program, including the fleet  budget. As we note in our report, during the course of our audit work, it  was clear that the agency officials we spoke with were opposed to GSA’s  position on this matter. We did not assess the ramifications of GSA’s  proposal as part of our review. In addition, GSA expressed disappointment  that we did not recommend that agencies fund a fleet management  information system. Because we found that agencies are in different stages  of implementing such systems, and because GSA already plans to require  such systems in its revised Fleet Management Regulation, we did not  believe it was necessary for us to recommend this action.
The Departments of Agriculture and Veterans Affairs agreed with our  recommendations but raised concerns about GSA’s planned revision to the  Federal Management Regulation that would require agencies to centralize  budget authority for fleet management. Veterans Affairs strongly opposes  such a requirement. It noted that, in a system as large and complex as the  department’s, such a massive administrative responsibility would be  unwieldy and inefficient and would require significant additional resource  support. The department believes that oversight at the local level is the  preferred approach to fleet management. Agriculture noted that the  budget is a complex process involving detailed review and comparison of  vehicle costs. It stated that changing priorities, such as national  emergencies, require intense local management of the fleet to ensure a  high state of mission-readiness and that, therefore, increased  centralization of the budget process would not be in the best interest of  overall fleet efficiency and mission success. As we point out in our report,  the issue of centralized budget authority is a contentious one. It will need  to be addressed by the agencies, OMB, and GSA.
Agriculture also expressed concern that our recommendation on the need  to establish utilization criteria would lead to a set of national criteria that  all local fleet managers would be required to use. That is not the intent of  our recommendation. Our recommendation is aimed at having each  agency establish utilization criteria based on the specific mission of the  vehicles in its fleet. Where a single criterion such as mileage, for example,  is inappropriate, local officials need to have alternative criteria available,  such as hours on station or number of clients served, to validate the need  for vehicles. We believe it is the responsibility of agencies to establish  clearly defined utilization criteria and guidelines to allow local officials to  appropriately apply these criteria.
The Department of Homeland Security (DHS) agreed with our  recommendations and emphasized that it has undertaken efforts, in a  relatively short time frame, to establish a departmentwide fleet  management program. It noted that the process used by its Bureau of  Customs and Border Protection for assessing vehicle utilization based on a  variety of factors is considered a best practice and will be extended to the  rest of the department. In addition, DHS stated that an updated  management directive on motor vehicle management sets forth the  requirement for maintaining systems for effective control and  accountability of motor vehicle assets and for maintaining the minimum  number of vehicles needed to meet requirements. The directive is  currently being reviewed within the department. In DHS’s view, these two  actions meet the requirement to establish effective oversight mechanisms  to ensure that fleet utilization criteria are defined and fleet assessments  are carried out and reviewed on a regular basis. While these are positive  actions, DHS needs to ensure that oversight is maintained and that  periodic fleet assessments are conducted using the appropriate criteria.
Veterans Affairs stated that it will address our recommendations with  several planned initiatives which, when completed, should rectify  identified weaknesses. For example, the department will convene a  national work group to develop a broad-based fleet management  operations manual that will include a section that defines utilization  criteria based on vehicle missions. The department is also reviewing  various options for establishing a systemwide software application to be  used as an oversight tool for managing the fleet.
The Department of Defense agreed with our recommendations. It stated  that action will be taken to ensure that utilization criteria, which may be  comprised of existing mileage goals or other appropriate criteria, will  apply to all nontactical vehicles. It will also require components to review  their vehicle inventories annually against fleet assessments and to conduct  on-site surveys or inspections on a minimum 3-year cycle (resources  permitting) with the purpose of purging or fully justifying underutilized  vehicles.
In oral comments, OMB representatives told us that they agree with our  findings and recommendations and will consider incorporating the  recommended changes to agencies’ reporting requirements in new  guidance for the fiscal year 2006 budget cycle.
As arranged with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days from its  issue date. At that time, we will send copies of this report to other  interested congressional committees; the Administrator of GSA; the  Director of OMB; and the Secretaries of Defense, Army, Navy, Agriculture,  Veterans Affairs, and Homeland Security. We will make copies of this  report available to others upon request. In addition, this report will be  available at no charge on the GAO Web site at http://www.gao.gov.
If you or your staffs have any questions regarding this report, please  contact me at 202-512-4841 or cooperd@gao.gov, or Michele Mackin,  Assistant Director at 202-512-4309 or mackinm@gao.gov. Major  contributors to this report include Marie Ahearn, Benjamin Howe,  Emma Quach, Richard Silveira, and Tatiana Winger.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine the extent to which agencies can ensure that their fleets are  the right size, we obtained and analyzed agency policies and guidelines on  fleet management from the Departments of Agriculture, Army, Navy,  Defense, Homeland Security, and Veterans Affairs. These agencies,  according to GSA data, have some of the largest fleets in the government.  Because the Department of Homeland Security was only recently formed,  its organizational elements continue to operate their vehicle fleets under  the policies of their legacy agencies. Therefore, we limited our review to  the department’s efforts to leverage its buying power through a strategic  sourcing initiative for vehicles and to the steps it is taking to establish  departmentwide guidelines on fleet management. Although the  Department of the Interior also has a large fleet, we did not include it in  our review because the Inspector General recently issued a report on that  department’s vehicle fleet. We did not assess agencies’ policies on vehicle  operation, maintenance or disposal.
To illustrate how local, state and regional officials determine the need for  vehicles, we selected local, state and regional offices based on location  and number of vehicles within each agency. We obtained and analyzed  information and interviewed fleet managers and other officials responsible  for fleet management at these locations to identify the controls, oversight,  and criteria used to determine the need for vehicles. Following are the  locations we contacted or where we conducted our work.
subsections: section_title: Department of Agriculture
subsections: section_title: Natural Resources Conservation Service
section_title: Animal and Plant Health Inspection Service
paragraphs: Washington, D.C.    Wildlife Service, Athens, Ga.    Wildlife Service, Wash.    Veterinary Service, Iowa    Veterinary Services, Conyers, Ga.    Veterinary Service, Eastern Regional Office, Raleigh, N.C.
section_title: Forest Service
paragraphs: Washington, D.C.    Southern Region, Atlanta, Ga.    Chattahoochee-Oconee National Forest, Gainesville, Ga.    Daniel Boone National Forest, Ky.    Land Between the Lakes National Recreational Area, Ky.    Pacific Northwest Region, Oreg.    Siuslaw and Willamette National Forests, Oreg.
section_title: Department of Homeland Security
paragraphs: Office of Asset Management, Washington, D.C.    Federal Law Enforcement Training Center, Glynco, Ga.    Customs and Border Protection, Washington, D.C.    Transportation Security Administration, Arlington, Va.
section_title: Department of Defense
paragraphs: Office of the Assistant Deputy Under Secretary of Defense (Transportation  Policy), Washington, D.C.
subsections: section_title: Department of the Army
paragraphs: Headquarters, Department of the Army, Office of the Assistant Chief of  Staff for Installation Management, Washington, D.C.
Fort Belvoir, Va.    United States Military Academy, West Point, N.Y.    Fort Carson, Colo.
section_title: Department of the Navy
paragraphs: Naval Facilities Engineering Command, Washington Navy Yard, D.C.    Navy Public Work Center, Washington, D.C.    Navy Public Works Center, Norfolk, Va.    Naval Air Station, Joint Reserve Base, Fort Worth, Tex.    Navy Public Works Center, Jacksonville, Fla.    Naval Station Newport, Newport, R.I.    Pacific Division, Naval Facilities Engineering Command, Transportation  Equipment Management Center, Pearl Harbor, Hawaii    Atlantic Division, Naval Facilities Engineering Command, Transportation  Equipment Management Center, Norfolk, Va.
section_title: Department of Veterans Affairs
subsections: section_title: Veterans Affairs Health Administration
paragraphs: Headquarters, Washington, D.C.    Medical Center, Bedford, Mass.    Medical Center, Baltimore, Md.    Medical Center, Jamaica Plain, Boston, Mass.    Medical Center, Brockton, Mass.
We reviewed prior GAO and other audit agency reports, reviewed other  public documents, and contacted the following offices of inspectors  general    Department of Energy,    Department of Defense,    Department of Veterans Affairs,    Department of Justice,    Department of Treasury,    Department of Transportation,    Department of Homeland Security,    Department of the Interior, and    Department of Agriculture.
We also contacted officials from the Naval Audit Service and the Army  Audit Agency.
To identify industry standards for efficient fleet management, we  discussed the fleet management practices contained in our 1994 report  and the use of utilization criteria with three industry fleet management  consultants, one of whom was a contributor to our 1994 report. We  selected these consultants based on their experience dealing with the fleet  management practices in both the public and private sectors. We also  talked with the manager of the Fleet Information Resource Center of the  National Association of Fleet Administrators.
To identify governmentwide steps to improve fleet management, we  collected, analyzed, and discussed information obtained from officials at  the Office of Management and Budget’s Office of Transportation/GSA  Branch, GSA’s Office of Governmentwide Policy, and GSA’s Office of  Vehicle Acquisition and Leasing Services, which runs the leasing program.  We also discussed with GSA officials the Office of Governmentwide  Policy’s proposed revisions to the regulation on fleet management.
We conducted our review from September 2003 to April 2004 in  accordance with generally accepted government auditing standards.
section_title: Appendix II: Comments from the Department of Agriculture
section_title: Appendix III: Comments from the Department of Defense
section_title: Appendix IV: Comments from the General Services Administration
section_title: Appendix V: Comments from the Department of Homeland Security
section_title: Appendix VI: Comments from the Department of Veterans Affairs
section_title: Appendix VII: Reviews Identifying Excess Vehicles at Various Agencies
subsections: section_title: Non-Tactical Vehicles, U.S. Army Garrison Japan, August 2003.
paragraphs: U.S. Army Garrison Japan does not  effectively use its nontactical fleet.  Utilization data were only available for 430  of the 633 vehicles at the Garrison, and  235 of these vehicles had low utilization.  The reviewers identified about 99 excess  vehicles, representing about 16 percent of  the fleet.
Report did not estimate potential savings;  however, it noted that for the 99 excess  vehicles, the estimated replacement cost  was about $3.8 million and maintenance  cost was about $42,000.
Transportation Motor Pool Operations, 8th  U.S. Army, December 1997.
No estimate on potential savings.
34 vehicles (representing 33 percent of    61 vehicles (representing 39 percent of  the fleet), and    203 vehicles (representing 54 percent of  the fleet)
Activities did not always effectively use  their nontactical support vehicles. Vehicle  usage goals set by the command were  considerably below Department of the  Army goals.
About $109,600 if activities met command’s  usage goals; $465,100 if they met the  Army’s goals.
Navy Transportation Equipment Management Center (TEMC), Atlantic Division  Selected Navy Transportation Equipment  Management Center reviews.
At the end of fiscal year 2003, Navy  reviews of selected activities estimated cost  avoidance of $3.7 million per year if  installations reduced their fleets by a total  of 775 vehicles to meet the recommended  inventory level. $3.7 million per year cost avoidance.
Management of Non-tactical  (Administrative) Transportation Vehicles,  March 1998.
Auditors found that 6,605 of the 24,387  vehicles in the review were not needed.  The Navy did not have a systematic  mechanism within the transportation  management structure to enforce Navy  policy on fleet management. $19.8 million annually.
Government Vehicle Usage at Naval Air  Station Patuxent River, Md., December  1998.
The Air Station retained 79 assigned  vehicles that were not needed to support  mission requirements because the Public  Works Transportation Department did not  have a systematic and continuous process  for the review and evaluation of vehicle  assignments. In addition, 141 of the 359  vehicle assignments were without required  justification.
Report did not specify amount, but noted  that the Naval Air Station had unnecessary  administrative transportation costs as a  result of excess vehicles.
Department of Veterans Affairs, Office of Inspector General  Review of Selected Construction Contracts,  Purchase Card Activities, and Vehicle  Administration at Veteran’s Affairs Medical  Center (VAMC), Clarksburg, West Virginia,  January 2001.
Auditors could not account for all vehicles  at the facility. Poor supervision contributed  to a lack of accountability and records were  incomplete and inaccurate. Poor business  decisions were made during the trade and  acquisition of vehicles. In one example, an  acquisition was not justified because the  vehicle had been parked behind a laundry  facility and not moved since it was  purchased in 1997. In fact, the keys were  missing at the time of the review.
Not addressed as a whole. The purchase  price of the one vehicle that did not move  was $1,800.
U.S. Department of Energy (DOE), Office of Inspector General, Office of Audit Services  The size of the fleet was not appropriate  because Richland had not established or  implemented controls required by DOE’s  Property Management Regulation. The  review found that 85 percent of 1,332  vehicles were used less than DOE’s  mileage standards, and Richland could  potentially reduce its fleet by 559 vehicles. $1.7 million annually.
The allotment of 516 on-site discretionary  vehicles was too large because the  vehicles were measured in mileage instead  of number of trips, which was the standard  for this laboratory. None of the 31 randomly  selected on-site discretionary vehicles met  the standard of 9.2 trips per day. Livermore  would need to reduce its fleet by 363  vehicles to meet the established usage  standard. $690,000 annually.
Vehicle Fleet Management at the Idaho  National Engineering and Environmental  Laboratory, March 1999.
The light vehicle fleet was larger than  necessary. The review found that  45 percent of the light vehicles were used  significantly less than the mileage  standards and that Idaho could potentially  reduce its fleet by 86 vehicles. $321,000 annually in operation,  maintenance and replacement costs.
The department and its bureaus were not  effectively managing its approximately  36,000-vehicle fleet. A significant portion of  the department’s fleet was underutilized  (44 percent). $34 million annually.
Selected Administrative Activities at the  Colorado State Office, Bureau of Land  Management, March 1996.
The state office did not complete its  required annual review and was not  managing its vehicle fleet efficiently. The  review found that 20 of the 60 owned or  leased vehicles were underutilized and  recommended a fleet reduction of up to 6  GSA vehicles. $22,000 annually for the 6 returned GSA  vehicles.