Within my office we offer and manage many different credit card programs for the many customers whom we provide travel services for.  Lately we have been heavily involved with preparing for our internal transition to the new contract/vendor.  With current master contracts expiring on November 29, 2008, organizations are never permitted to extend their task orders beyond the current expiration date.  Furthermore, agencies cannot begin processing transactions under the new program until November 30, 2008.

My office services a very diverse customer base, and with that each customer’s needs are very different.  With the award of a new Master Contract, agencies must make a final determination of the task order type that best suits their needs.  Currently there are four types of task orders offered.  There is the ‘Standard’ which contains the same requirements as the Master Contract; the ‘Tailored’ which includes agency specific requirements; the ‘Tag-along’, which “piggybacks” or uses another agency’s task order; or the ‘Pooling’ arrangement where two or more agencies collaborate to develop and issue one task order which will meet the pooled agencies’ needs.

Dedicated staff within our office has been working closely with our customer agencies to ensure and facilitate a smooth transaction to the new SmartPay 2 system.

by Brian Shears

The Federal Travel Regulations (FTR) requires mandatory use of the government travel charge card by government travelers.  However,  each agency policy can mandate when an IBT should be obtained depending on what each agency considers a “frequent” or “infrequent” traveler.

If a traveler is issued an IBT government charge card, the card may only be used for official government travel expenses such as lodging, transportation expenses, and meals while on official travel.  Travelers should also be using the card’s Automated Teller Machine (ATM) capability to obtain cash advances if necessary.

Both the agency and the traveler benefit when the travel charge card is used.  Travelers no longer need to carry large sums of cash by using their government travel charge card.  As a convenience for the traveler, there are many ATM’s across the country that will accept the travel card when a cash advance is needed.  Some hotels and rental car agencies waive Federal taxes when travelers use their government travel charge card.

The government agency also benefits by receiving a rebate on purchases charged directly to the travel charge card.

By: Robyn Rice

“The contents of this message are mine personally and do not reflect any position of the Government or my agency.”

Once the Finance Office received the documents, a technician verified the per diem rates and quarter day calculations for first and last day as well as other expenses.  Voucher receipts were verified and any voucher with a discrepancy was sent back to the traveler for correction.   Once the voucher was deemed correct, the finance technician would classify expenses into Budget Object Codes (BOC) and information such as the employee’s name, SSN and Accounting were written on to a coding sheet.  The coding sheet was sent to a Data Transcriber to enter into the financial system.   This process was labor intensive, prone to error and in many cases reimbursement of a travel voucher could take several weeks.

In the mid 1990′s my agency implemented Travel Manager, an electronic COTS travel system that was hosted in-house.  With the implementation of this system we went from a paper based travel process to a fully automated one.  Travel Manager contained locations with applicable per diem and performed calculations.  The electronic routing allowed documents to be reviewed and approved electronically.  Once a document was approved it was interfaced to the financial system daily and travelers were reimbursed for expenses within a few days of submitting a voucher.  Although a Travel Management Center (TMC) was available, many travelers continued to call the airline and hotels directly to make reservations and recorded the cost in Travel Manager.

In 1998 the Smartpay program was introduced that made credit cards available to frequent travelers and by 2001 the Federal Travel Regulations (FTR) required travelers to use a TMC to book official travel.  The FTR also requires travelers to use the City Pair Program except in limited situations.  The fairs offered by the airlines are one way which allows for complex multiple destination trips. The City Pair program offers very competitive airfare that can be discounted up to 70% off of unrestricted coach fare and offers benefits such as no advance purchase, no minimum or maximum length stay, last seat availability, no blackout dates, no penalties/fees for rebooking and tickets are fully refundable.

In 2003, GSA awarded contracts for E-Gov Travel Services (ETS) to three vendors and amended the Federal Travel Regulations to require agencies to implement one of the systems by September 30, 2006.  My agency awarded a contract and began implementing ETS in the summer of 2004.  The ETS had many of the same features that the Travel Manager system had with the addition of integration with the TMC.  By using the ETS, travelers have a one-stop-shopping for travel where the process of creating the authorization also includes making on-line reservations for common carriers, hotels and rental cars.  Vouchers are easy to complete as all the traveler needs to do is to update the estimated expenses from the authorization, electronically attach receipts (which are used for post payment audits) and electronically sign to route for approval.

In 2005 Government agencies were required to implement split disbursement.  Split disbursement provides a high level of convenience to the traveler to designate charges they made to their government credit card be paid directly to the bank through the vouchering process.    Another program that began about the same time is Fedrooms.  This program initiated by GSA is managed by Carlson Wagonlit who negotiates rates and terms with hotels in cities that have a large number of visits from Federal travelers.  Hotels that participate are FEMA and ADA compliant, have a least a two star rating from Mobil Travel Guide or AAA rating, they must accept government travel cards and other forms of payment, the rate must be at or below the government per diem rate, have a 4:00pm or later cancelation policy on the day of arrival, last room availability and other amenities. Federal Travelers are to give Fedroom Properties first consideration when booking a room.

The evolution of Federal Travel has been significant over the last 20 years.  20 years ago electronic travel and on-line booking was an idea reserved for Buck Rogers and the Jetsons.  In addition to automation, the government has moved towards consolidation and elimination of stove-pipe systems.   In the future I see agencies continuing to consolidate and automate travel processing as well as to outsource travel services to a Shared Service Provider.  Federal travel may decrease with the popularity of video conferencing and on-line training but federal travelers will still need to be on-site for a variety of mission essential trips that can relate to anything from the economy, civil rights and defense to disabilities, education, and Veterans Affairs.   Travel is an important part of many agencies mission and in servicing the public.  Needless to say, I’m looking forward to being involved in the next twenty years of Government Travel evolution.

by Diana Bonnell

Disclaimer: The contents of this message are mine personally and do not reflect any position of the Government or my agency.  Use of this equipment is consistent with the agency’s policy governing limited personal use.

According to GSA, banks under contract to the Smartpay program must provide an assortment of protections against misuse. Under the program agencies may limit credit lines, use Merchant Category codes (which designate the type of business) to limit where cards may be use, access internet reports on use, monitor account activity, search for accounts with excessive disputes, arrange for reports of unusual spending activity, and locate accounts where cards have repeatedly been reported lost or stolen. According to GSA, agencies can arrange to receive customized reports to alert them to problems.

Apparently, agencies have available the tools to closely monitor and limit employee use of Smartpay cards. What GSA does not tell us is whether, and to what extent, agencies are using these tools and, to what extent employees are disciplined for card misuse. Even GSA admits that no Governmentwide policies exist concerning disciplining employees for card misuse and that most employees receive minimal training in what they may properly use the cards for. Rather than suggest that agencies need to correct this situation, I question why GSA does not issue Governmentwide requirements on training and discipline.

by Scott Goldsmith

One of the more vexing issues for some agency travel managers is the reconciliation of government Centrally Billed Account (CBA) charge card transactions originating from the agency’s chosen E-Gov Travel Service (ETS).  While in some cases the responsibility for CBA reconciliation lies with the ETS contractor and its embedded Travel Management Center (TMC), there are other cases where the agency is responsible and must match transaction data provided by the agency’s SmartPay® bank with authorization and voucher data provided by the ETS contractor.  This becomes particularly problematic if and when there is no ETS authorization number in the bank-provided charge card statement to use as a “key” to tie it back to the ETS authorization.  A reasonable person might ask, “Well, why wouldn’t the authorization number always be sent to the bank along with the other transaction information such as the date, purchaser and amount?”  The answer to this question requires an explanation of the complex relationships that exist along the pathway from the ETS contractor to the SmartPay® bank.

Air Fare Transactions

The first set of relationships pertains to charges for air fares.  When a traveler makes a reservation using the ETS’ online booking capability, the ETS creates a Passenger Name Record (PNR) in the Global Distribution System (GDS).  When a traveler’s reserved itinerary is ticketed (according to agency-defined business rules), the GDS sends the financial transaction portion of the PNR to the Airline Reporting Corporation (ARC).  The financial transaction includes data such as the date, purchaser, airline and flight number, and total air fare.  ARC then processes the transaction through VISA or MasterCard (depending on which is used by the agency’s SmartPay® bank), who then hands the transaction data off to the bank’s “Issuing Processor” (e.g., TSYS), who then sends the transaction data to the agency’s SmartPay® bank for posting to the agency’s CBA.

Concurrent with the sending of the financial portion of the transaction to ARC, the “non-financial” portion of the PNR is extracted from the GDS and sent to ATPCO, whose role it is to collect and distribute airline fare-related data.  This portion includes (but is not limited to) data such as flight origin and destination, frequent flier number, and the ETS authorization number.  After being reformatted by ATPCO, this non-financial data is sent through Visa/MasterCard to the Issuing Processor and finally to the SmartPay® bank.

This is where it gets tricky.  If ATPCO’s data is delayed and is not received by the Issuing Processor before it sends its daily file of financial transactions to the SmartPay® bank, then the ATPCO transaction is “orphaned” and cannot be matched to its financial “parent”.  Thus, when the agency looks at its monthly CBA statement, no authorization number will appear with the financial transaction.  This means that the agency travel manager will have to perform research in order to reconcile the transaction.

See Attachment 1 for a visual representation of the flows described above.

ETS Voucher Fee Transactions

Unlike air fare transactions, the transmission of charges for the ETS Voucher Fee transactions follows a single pathway; however, this pathway is fraught with its own issues that may make CBA reconciliation difficult.  For agencies that choose to do so, when an ETS vendor processes a voucher, it charges the ETS Voucher Fee to the CBA.  The financial transaction can be set up by the ETS contractor to include the Voucher Number so it can be communicated to the SmartPay® bank.  This does not guarantee that the Voucher Number will be received by the SmartPay® bank, primarily because there is no industry standard for where this data should be placed and there are numerous players and business relationships that exist in the pathway that the transaction must travel, to wit:

1. The agency has a contractual relationship with its chosen ETS contractor and a separate one with its SmartPay® bank.
2. The ETS contractor has a contractual relationship with its Merchant Bank for charge card transaction processing.
3. The Merchant Bank has a contractual relationship with its Acquiring Processor.
4. The SmartPay Bank has a contractual relationship with its Issuing Processor.
5. The Acquiring Processor and Issuing Processor are “members” of VISA and MasterCard (a.k.a, “the Associations”).

The Associations have established transaction data specifications and make changes to those specifications on an annual basis.  The ETS contractors have attempted to leverage existing data elements in those specifications in order to communicate voucher numbers to the SmartPay® banks.  This typically works for some period of time but may be disrupted if/when the annual specification update by the Association is implemented.  When this happens, agency transition managers have no information other than the date available for use in matching the voucher transaction fee to the appropriate voucher document … a frustrating position to be in.

See Attachment 2 for a visual representation of the business relationships described above.

Conclusion

For both of the scenarios described in this paper, the solution to the absence of adequate reconciliation data lies in the establishment of an industry standard for where the ETS authorization/voucher number can (and should) be placed in the financial portion of the PNR and charge card transaction.  This will require advocacy by the agencies and teaming with their ETS and SmartPay® contractors to get the appropriate data element(s) identified, documented and implemented by VISA and MasterCard.

NOTE:  TO SEE THE ATTACHMENTS PLEASE GO TO:

http://www.cgtp.net/documents/Potocko_Final_Paper.pdf

By: John Potocko

Several agencies are issuing a separate plastic for purchase card transactions and travel card transactions; even when they use the same vendor for both types of transactions. This means an employee with both purchase authority and travel authority has to carry at least two cards, reconcile two types of statements, and maybe even use two electronic access systems; if their agency uses two different vendors. The Integrated card allows one plastic Government charge card to be issued; which can carry one, two, or all business lines on the same card. An agency will have to spend time up front to make sure the authorization control sets are appropriate and the correct merchant category codes are activated for each line; but this type of work is required on separate cards as well. It’s also good for all the business lines to work together managing one program, because it allows travel, purchase, and fleet to take advantage of best practices in policies, reporting, and managing a charge card program. It brings together travel and procurement in a way that the whole agency can benefit. The advantage to the end user is clear as well, one card to carry, one statement to reconcile, and one electronic access system to learn.

Whether or not an agency chooses to implement an integrated card, one feature that evolved from our integrated card was the splendid idea to centrally bill travel transactions. Some agencies do have something called a centrally billed account, maybe they have one card number, or ten, or a hundred for the agency set up as the default. They will use this account to possibly charge airfare expenses to and then they have to do additional work when reallocating the charges to the real field level account. The reallocation seems burdensome to many agencies so it’s not always an appealing process. The Department of Interior treats it differently, more like a diversion account. They set up master accounting codes and the individually issued Government cards each have a default account number so even when the airfare expense hits the individually issued card, it shows up as centrally billed to the traveler and the Government pays the charge the day it comes in. This is how the purchase card works in several agencies, the purchases are centrally billed and just show as memo items on the cardholder statement, meaning the Government directly pays the charge. However, agencies haven’t decided to take advantage of this billing functionality on the travel card.

The improvements that centrally billing charge card transactions have provided are numerous. We not only centrally bill airline charges; but rental cars, taxis, parking, even lodging. By centrally billing lodging and other transactions, DOI is truly tax exempt since the Government is directly paying the charge. Since the rest of the Government does not follow this practice, we are always questioned and challenged on tax exemption. If we could get buy in from other agencies, it would provide more support with the lodging and rental car establishments. One concern with centrally billing transactions is the increased monitoring required because of the risk that a traveler may place a personal charge on the card. In our experience, the percentage of travelers who do not follow the appropriate policy is very small. They enjoy the flexibility of not owing hundreds of dollars on a charge card statement or being out of pocket for travel charges too much to jeopardize the program.

By taking this diversion approach, we are essentially performing the split pay best practice recommended by A-123 but even better. Instead of waiting until the voucher is filed by the traveler and diverting a certain calculated payment to the bank, the Government pays the bank charges the next day. It’s apparent how supplying those timely payments would maximize any agency’s rebate. It also lowers your risk and population available for delinquencies, since the only transactions that could even cause a delinquency is an ATM transaction or a food purchase. Our delinquency percentage has been below 2% consistently since we implemented these practices.

An Integrated charge card program and centrally billed travel transactions take work to set up correctly in the beginning of the process, and any card program requires diligent examinations. The return on investment is well worth the effort in both cases. GSA should encourage agencies to participate in Smartpay 2 user group meetings to discuss best practices, so all can take advantage of what has been successful in various Government Card programs.

by Jacqueline Lynch

The contents of this message are mine personally and do not reflect any position of the Government or my agency.

The federal government has not been able to accurately identify its annual travel spend which exceeds $15.4B a year.  An Accenture study found $7B a year in unknown types of travel expenditures, and a difference of over 50% in the travel expenses recorded on the federally mandated SmartPay travel card from expenses recorded in the President’s Budget Object Class 21 (Travel and Transportation of Persons) as submitted by federal agencies.  In the past, the Government has been unable to capture spend, determine the value of the spend, and to determine the level of compliance with federal travel programs.  The inability to know how much has actually been spent on travel means that it cannot effectively be managed.  The Government’s approximately $15.4B a year in travel spending is subject to unknown inefficiencies and costs.  The Government’s inability to wade through a morass of incomplete data from various sources has seriously hampered its ability to effectively negotiate with stakeholders in the City Pairs program among other things.

The intent of the TRX MIS contract was to provide comprehensive data on Government travel for most if not all GDS, and other travel data collection systems.  Market research was performed and the requirements for the MIS system originally were drafted from both DOD (DTMO) and the civilian agencies.  GSA evaluated the proposals and awarded the contract to TRX for the MIS initiative.

This contract provides for the first time the ability to capture and aggregate comprehensive travel data for the federal government.  This will include travel made through the Travel Management Centers (TMCs), through the ETS solutions, through the SmartPay charge card, and directly with suppliers.  A multi-year, phased in approach is being used to mitigate risks associated with technical development, integration, and minimize costs to the government.

Once the government has aggregated its travel data through a central repository for such data as the contractor provides, reports can be generated that will provide management information regarding government travel.  TRX has provided their services to numerous commercial companies which have resulted in the development of a suite of ready-to-use travel management reports.  The government will now be able to use these same reports which have given companies in the commercial marketplace the ability to better manage their travel.

Additionally, custom reports specifically tailored for the government environment are being developed for use by the federal agencies and their stakeholders.  This will include the travel reporting Information profile (TRIP) report which is a statutory requirement.  It is important to note that relocation data and the cost of administering travel is not available from the solution since it is not accumulated electronically in the available data sources at this time.

Initially it was thought that the main objections in delaying implementation would come from the airlines and vendors providing the GDS data links to the government vendor.  As it turned out, and much to everyone’s surprise, most of the delays resulted from other vendors who did not provide timely, accurate, and complete data feeds.

Initial data feeds were also somewhat delayed as additional security requirements were implemented to incorporate personally identifiable information (PII) transmission.  These requirements ensure the secure transmission of the data through an encrypted portal called Dataman.  There were some unexpected challenges regarding security on the Government side as an Authority to Operate (ATO) certificate was required to secure these records.

The rights to all of the data remains with the government, and the deployment of a third party aggregator provides the necessary consolidation of aggregated data, standardized processes, and streamlined reporting requirements.  It also provides a steady data stream necessary to accomplish strategic sourcing of services.  This process will also unencumber each of the TMC’s from trying to meet regulatory requirements processes reports such as TRIP reports and Premium Class Travel Reports.

GSA addressed the only other objection to providing this data by providing free software to transmit already available back-office data to GSA.  Although this software was originally intended primarily to ease the transmission of data from smaller TCS it is now widely used for most of the TMC data feeds as a more secure method of data transfer.  GSA also provided no-cost technical support for the system.  DataMan extracts data from back-office systems and transmits it directly to the TRX MIS system – 256k encrypted.   It is secure and automated, easily configurable, and the smaller TMC subcontractors/vendors that provided data with it to date are happy with it.  It sends the data automatically every month and requires no human intervention once set up.  At this point in time data is collected monthly and will not include some of the IBA data.  As the ATO is granted – one years worth of data will be collected to include PII as requested by the Government Agency.  TRX rolled out the pilot of the system for government wide use on 12/15/08.

Included in the MIS is the ability to perform analysis of strategic sourcing opportunities.  The capability was exercised this past year as an analysis was performed upon the request of the airline carriers.  The carriers wanted to enforce a ticketing time limit to purchase seven days prior to departure of within twenty-four hours, if within the seven day period.  This would, the carriers claimed, allow the airlines the ability to resell their seats in a timely manner to the general public and to ensure revenue opportunities were available at every juncture.

It was important to have a solution to analyze the substantial amount of  data available and provide a significant response to the request.  For the first time the government was able to view data patterns not readily seen, for instance:  Twelve percent (12%) of all airline tickets are issued for the same day of travel.  Airlines have also added several fees (fuel surcharge, baggage and interactive fees for such things as telephonic reservations and ticketing at the airline counter, etc.) to the  price of the ticket.

Under the TRX contract GSA was able to review the entire download of FY 2007 ARC airline travel data in order to preview the caliber of information that might be expected under the TRX MIS contract.  Upon review, the analysis showed 72% of government travel spend either used a TCA or CA fare on City Pair contract tickets.  76% of the segments were also City Pair routes.  An additional 16% used DG (discounted government fares), so 88% of tickets purchased were actually Government fares.  Commercial fares were used 12% of the time either as lower than contract fares, or because they were in markets not serviced by City Pair fares.  Data from ARC was broken by origin and destination, by passenger count and fare basis by passenger count.  This analysis indicated a high rate of compliance with the City pairs contract policy and showed the government to be a strong proponent of the program.  The analysis supported the government’s contention that we were a valuable customer to the airlines, as in the instances noted, the Government actually helped to fill seats for the carriers at the last minute and at an acceptable yield to the airlines.

TRX data will eventually also provide the Government with additional critical data for effectively managing other areas of their contracts.  This data is sorely needed, since prior to this time, there was  no way to efficiently manage the effectiveness of the programs nor that business activities were actually being conducted in the best interests of their customer, the U.S. Government.

New  analytical capabilities are expected to realize significant improvements for strategic sourcing, utilization of federal travel programs, compliance with federal travel policy, and travel spend data.  New benefits will include:

• Improved travel supplier agreements that provide best cost and quality choices.
• Improved use of existing programs that maximize cost savings and flexibility.
• Increased compliance with travel policy and new policy creation, improving adherence to the Federal Travel Regulation (FTR).
• Near real-time travel usage and pattern information analyses allowing for adjustments and changes in travel management that provide the required response to the needs of the federal traveler.

In conclusion, despite some unanticipated obstacles, the MIS has been launched and is now available for GSA and Government-wide use for the benefit of our government travelers, and the success of our government programs.  The data aggregation and information analyses it yields will be invaluable as GSA continues to improve strategic sourcing under the City Pairs programs, and to monitor and adjust policy to ensure compliance with the FTR and associated regulations.

by Julie Speers