Government/Contractor Travel – An Overview

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» Posted by on Dec 4, 2013 in Contracting for Travel Services, History and Overview, Industry Postings | 0 comments

As the role of the United States has changed over the last two hundred years, so has government travel.  Government prohibition against the use of travel agents, originally enacted in the late 19th century when civilian government travel was likely mostly over land and agents were representatives of the railroads (one of two main forms of travel at that time), would have to be amended with the emergence of the United States as a world superpower.  Government employees and contractors now need the full services of travel agents and their world-wide connections to service providers.  The influence of the United States now reaches to the farthest points of the globe.  Necessarily this means that the cost of government travel will expand along with that influence.  The benefits of airline deregulation and CRS/GDS data tracking have enabled the government to save taxpayer money by negotiating incredibly low rates for City Pair contracts.  The yield management information derived from the GDS systems also help the airlines in understanding if they are able to provide such low rates to the government.  In this way, increased data collection has aided both the government and private sector.  Although painful to travel agents, the gradual elimination of commissions have made more transparent the cost of air fare, hotel, rail and rental car fare versus the amount spent on travel agent services, which are in the form of fees.  While transparency was not directly intended but only an effect of industry trends, nevertheless, the benefit is that it lessens taxpayer concern about hidden profits based on funds collected from them.  Further transparency and cost efficiency is achieved through the use of the electronic travel systems, which require accountability of the government traveler both in terms of approved use of government funds for travel and explanations for any funds spent in excess of per diem regulations.  The electronic travel systems require, on average, less time for the government traveler to document compliance with regulations.  The more efficiently the government can use the time of its employees provides an opportunity for cost savings to the tax payer.  Truly ironic is that the cost of government travel has increased due to the very taxes that the government levies.  One very easy way for the government to decrease the cost of travel to the taxpayer is to reduce the taxes it levies on the industry generally or to create tax incentives for travel service providers at all levels when contracting with the government.  The measures which the government can take to save taxpayer funds will hopefully be passed on to the citizenry.  Whether the cost savings result in fewer or smaller taxes is a different subject for another day.

By: Olivia Tautkus

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