The White House Office of Management and Budget (OMB) on Friday instructed federal agencies to cut fiscal-year 2013 travel expenses by 30% from 2010 levels, 10 percentage points deeper than previously ordered cuts.
Federal agencies "must maintain this reduced level of spending each year" through fiscal-year 2016, according to a May 11 memo from Office of Management and Budget acting director Jeff Zients.
The memo also establishes new federal conference spending guidelines while promoting cost discipline in other indirect spending categories, including fleet management and real estate.
OMB instructed federal agencies to report within 90 days their plans to achieve the travel budget cuts.
Within 180 days, the Department of Defense and the General Services Administration will consult with OMB to review the Joint Federal Travel Regulations and the Federal Travel Regulation "to ensure that the policies reduce travel costs without impairing the effective accomplishment of agency missions," according to the memo.
Through that review, officials will seek to "establish or clarify" a number of federal travel policies, including requirements for government travelers to share rental cars and taxis "when appropriate"; per diem practices; the "use of noncontract air carriers" when it will "result in a lower total trip cost"; lowest logical fare and advance-purchase requirements; and "controls in place to collect refunds for unused or partially used airline tickets."
To preserve mission-critical travel, OMB noted that agencies could exclude some expenses from the 30% reduction target if agency heads determine those cuts "would undermine such critical government functions as national security, international diplomacy, health and safety inspections, law enforcement or site visits required for oversight or investigatory purposes."
The OMB memo also outlined tighter controls for conferences, including the requirement that deputy secretaries of each agency "review any conference where the agency spending could exceed $100,000."
OMB will "prohibit agencies from spending over $500,000 on a conference unless the agency’s secretary approves a waiver."
It also will require each agency to annually and publicly disclose data on full-year conference spending, "including descriptions of agency conferences that cost more than $100,000."
The directive comes a few weeks after the House and Senate passed separate bills to cut and freeze for the next five years some federal travel and meeting spending, apparently in response to a controversial 2010 GSA event held in Las Vegas that resulted in several congressional hearings and the resignation of GSA administrator Martha Johnson.
Those bills, like the OMB directive, included prohibitions on spending more than $500,000 on a single meeting, among other edicts.
Responding to the congressional bills, industry lobbying group U.S. Travel Association last week proposed that in lieu of spending cuts, federal agencies should "report all conference-related expenditures and conference contracting procedures to its inspector general at the end of each fiscal year" and "ensure that agencies select conference locations based solely on cost-effectiveness by permanently eliminating the 'blacklisting' of American cities for government conferences and meetings."
U.S. Travel released its proposal before OMB issued its directive, but the association's director of domestic policy, Erik Hansen, on Monday told Business Travel News that there were some similarities.
"A lot of the proposals that the White House issued on Friday are very similar to our proposals to increase and strengthen oversight," Hansen said. "It's very easy to see one government conference that had excessive spending and took place outside of the rules and say that there must be others. As a result, you cut federal travel budgets and conference spending across the entire government.
"We get concerned when we see proposals that slash the federal travel budget without the thoughtful analysis of where the government can cut back first. It's the across-the board cuts that we're concerned with."
OMB's updated travel-spending guidance "builds upon work already underway to scrutinize travel and conference budgets," according to the memo.
OMB in September, for example, directed agency leaders to review travel and meetings spending. That resulted in "plans to achieve nearly $1.2 billion in travel and conference savings."
OMB also noted that the Department of Homeland Security has achieved "more than $13 million in travel cost avoidance"; the State Department now holds the "majority" of its conferences in government facilities instead of hotels; and the Department of Agriculture cut $47 million from its travel budget "by reducing the number of conferences and increasing the use of videoconference technology."
Such efforts have contributed to $280 million in year-over-year savings in the first three months this year, according to OMB.
Hansen said U.S. Travel would continue to address both the OMB directive and the congressional bills.
"First, we'll continue efforts to make sure that proposals in Congress are not overreactions, and we'll work with them to make sure that if they still see the need to legislate on this topic that they do so responsibly," he said.
"Second, we'll work with the administration to address some of our concerns with its proposal. There are some requirements in OMB's memo to publicly post conference spend. We want to make sure anything they post will not impact competition or disclose price-sensitive material in contracts."
Source: Business Travel News