To carry out its missions, DOE relies on contractors for the management, operation, maintenance, and support of its facilities. DOE headquarters and its field offices oversee 34 major contractors at DOE sites throughout the country. The activities that these contractors conduct serve a variety of DOE missions, such as managing environmental cleanup, including the safe treatment, storage, and final disposal of radioactive wastes; developing energy technologies for transportation systems, efficient building systems, and utilities; and maintaining the safety, security, and reliability of the U.S. nuclear weapons stockpile. In support of these activities, contractors’ staff travel domestically and internationally to collaborate with officials in DOE programs, other federal programs, industry, academia, and foreign countries. All of these trips add up to hundreds of millions of dollars spent on airfare, hotels, meals, and other direct travel expenses. DOE contracts spell out the allowable costs that contractors can charge for travel expenses. Although these contracts vary, the five contractors that we reviewed are generally allowed to provide for employees the actual and reasonable costs for lodging and transportation and a maximum daily amount for meals. Air travel is to be via coach or the lowest discount fare available. However, airfare discounts available to federal government employees are generally not available to contractors. Concerned with the cost of travel in its programs, DOE included travel cost reductions in its 1995 Strategic Alignment and Downsizing Initiative. This initiative aimed to reduce Department-wide funding by $1.7 billion over a 5-year period beginning in fiscal year 1996. The initiative targeted a $175-million cost saving for travel over the same period. This saving would be achieved by maintaining travel costs at a level $35 million below the fiscal year 1995 level. DOE’s fiscal year 1995 travel cost was $307 million, of which $261 million was for contractor travel and $46 million was for federal travel. DOE anticipated a $30 million saving each year from contractor travel and a $5 million annual saving from federal travel. According to DOE officials in the Office of the Chief Financial Officer, these reduction levels represented amounts that the Department believed to be reasonable and achievable savings goals. Travel costs incurred by DOE contractors were reduced in fiscal year 1996, but since then these costs have been increasing. Thirty-four DOE contractors reported that during the fiscal year 1996-98 period, they spent over $700 million on direct travel costs. Annual contractor travel costs were reduced to about $223 million in fiscal year 1996 but increased to about $241 million in fiscal year 1997 and to about $249 million in fiscal year 1998. More than half of the reported travel was incurred by five contractors at DOE’s Oak Ridge, Sandia, Los Alamos, and Livermore facilities. The details on the cost of travel and the number of trips reported by each of the 34 contractors are contained in appendix I. The increase in DOE contractor travel costs since fiscal year 1996 is more dramatic when contrasted with other variables, such as the contractors’ overall funding and staffing. For example, at the same time that travel costs were increasing, funding for contractors was decreasing. Specifically, travel costs increased 12 percent from fiscal year 1996 to fiscal year 1998, while overall funding to contractors decreased by about 1 percent. As a result, travel costs took a larger portion of the contractors’ funding. For each $1,000 of contractor funding, the average amount needed for travel rose from $16.24 in fiscal year 1996 to $18.32 in fiscal year 1998. Similarly, while the number of trips taken remained fairly stable for this period, the number of contractor staff at the facilities decreased about 10 percent, increasing the average number of trips per person. Figure 1 illustrates the trends in travel costs, funding, staffing, and the number of trips over the past 3 fiscal years. The primary domestic and foreign destinations of DOE contractors were Washington, D.C., and Russia, respectively. Most of the travel conducted by contractors—96 percent—was to domestic locations. Trips to Washington, D.C., accounted for about 11 percent of all domestic trips. For fiscal year 1998 alone, 34 DOE contractor sites reported making over 20,000 trips to Washington, D.C., costing at least $20 million. More than percent of these trips were taken by five contractors. For example, Sandia National Laboratory reported taking over 4,500 trips to Washington, D.C., in fiscal year 1998 or the equivalent of about 87 trips each week. Albuquerque, New Mexico, which is the destination for such sites as Sandia and the DOE Albuquerque Operations Office, was the second most frequent domestic destination, accounting for 8 percent of the domestic trips taken. The remaining top destinations were Oakland/San Francisco, California; Las Vegas, Nevada; and Los Alamos, New Mexico. For foreign travel—accounting for 4 percent of the travel—contractors most frequently listed Russia as the top destination. For fiscal year 1996 to fiscal year 1998, DOE contractors took 3,829 trips to Russia, or about 15 percent of all foreign trips. The second most frequent foreign destination was the United Kingdom, which accounted for 6 percent of all foreign trips. The remaining top foreign destinations were Germany, France, and Japan. Costs are increasing for both domestic and foreign travel, but the greatest percent increase is occurring in foreign travel. Although foreign travel represents only 4 percent of the trips, it represents 11 percent of the travel cost. From fiscal year 1996 to fiscal year 1998, foreign travel costs increased by about 53 percent. More frequent trips to Russia have significantly contributed to this increase. The number of trips to Russia increased 107 percent from fiscal year 1996 to fiscal year 1998, and the cost of these trips has more than tripled. Costs increased from about $2.2 million in fiscal year 1996 to about $6.7 million in fiscal year 1998. According to contractor officials, one reason for the increase in foreign travel, particularly to Russia, was that there is a greater emphasis on nuclear nonproliferation work abroad. DOE contractors reported that most travel to domestic and foreign locations was for business purposes, that is, travel for purposes related to the mission of the facilities. This category accounted for about 70 percent of all travel for fiscal years 1996 through 1998. The next most frequent travel category was for attending conferences. The remaining trips were for training, recruitment, and other purposes. Figure 2 provides information on the major travel categories reported by DOE contractor sites. The largest category—business—covered a wide variety of activities. Our review of travel documentation showed that employees take trips to meet with DOE officials, perform field tests, conduct various reviews and inspections related to warhead components, or perform other activities directly related to accomplishing the contractor’s mission. Some trips categorized as business had dual purposes, such as to attend a conference and to conduct meetings with industry. Although it was generally difficult to determine the reasonableness of such trips, we identified some business trips that were not directly related to or needed for accomplishing the facility’s mission. For example, Los Alamos National Laboratory funded a number of trips for its employees to obtain a master of business administration degree, many of which were categorized as business trips. In fiscal year 1998, 24 laboratory employees were enrolled in courses held at the University of New Mexico’s main campus in Albuquerque—about 100 miles from Los Alamos. These employees made at least 380 trips to attend class. Various expenses were incurred, including the cost of overnight hotel stays, rental cars, and meals. For example, one laboratory employee made 38 trips to Albuquerque in fiscal year 1998, spending about $5,321. We brought this practice to the attention of DOE officials, who subsequently determined that the cost of travel and per diem while attending these classes is not justified. These officials have determined that in the future, such costs for travel and per diem will not be allowable under the contract. Attending conferences accounts for the second most frequent travel category. For the 3-year period from fiscal year 1996 through fiscal year 1998, DOE contractors reported making 56,205 trips to conferences—about 15 percent of the categorized trips—costing about $59 million. However, this figure may be understated, since we found that for at least one contractor, some conference trips were categorized as business trips. The DOE Inspector General has raised concerns about the large number of attendees at individual conferences. In a December 1998 report, the DOE Inspector General concluded that some conferences were attended by many DOE contractor participants. The report cited a May 1997 particle accelerator conference in Vancouver, British Columbia, that was attended by 520 DOE contractor employees (as well as 5 DOE employees), resulting in travel costs of about $1 million. In another case, 176 DOE and DOE contractor participants attended a January 1996 human genome conference in Santa Fe, New Mexico. The Inspector General also reported that, contrary to government policy, DOE had no internal procedures to minimize the number of conference attendees. In response to the Inspector General’s report, DOE issued requirements and responsibilities for conference management on March 22, 1999. Among other things, the requirements are intended to better ensure that the number of DOE and contractor employees attending conferences is minimized. DOE is aware of the high costs being incurred for travel and has developed cost-reduction goals to help limit these costs. A substantial amount of these reductions was projected to be obtained from the contractors. However, DOE has had limited success. Although DOE surpassed its goal in fiscal year 1996, it did not reach its annual goals in subsequent years because it did not achieve the travel cost savings that it anticipated from its contractors. To increase cost reductions in contractor travel, DOE and the contractors will have to take additional actions. These could include reducing the number of trips taken by contractor employees, obtaining lower airfares for contractors, and adopting best contractor practices for other allowable costs.