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

Letter

Background

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.

Selected Agencies Follow Leading Practices for Fleet Management to Varying Degrees

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.

Leading Fleet Management Practices

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.

Selected Agencies Have Adopted Strategies to Mitigate Such Challenges as Competing Requirements, Funding Allocation, and Lack of Expertise

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.

Some Agencies Struggle to Meet Multiple and Competing Energy Requirements

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.

Funding Allocation Can Affect Fleet Cost- Effectiveness

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.

Having Fleet Management as a Collateral Duty Makes Developing Expertise More Difficult

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.

Conclusions

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.

Recommendations

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.

Agency Comments

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.

Appendix I: Scope and Methodology

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.

Appendix II: Home-to-Work and Executive Vehicle Assignments of Selected Federal Agencies

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.

Appendix III: Comments from the General Services Administration

Appendix IV: Comments from the Department of Defense

Appendix V: Comments from the Department of Homeland Security

Appendix VI: GAO Contacts and Staff Acknowledgments

GAO Contact

Susan A. Fleming, 202-512-2834.

Staff Acknowledgments

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.