Travel Management Centers

» Posted by on Dec 17, 2013 in Travel Management Centers | 0 comments

Travel agents are accredited by either ARC in North America or IATA in other parts of the world to sell airline tickets and other related travel services. ARC provides the airlines involved with services like accreditation of travel agents, uniform documents like air tickets, a computer system to report sales and remit the proceeds and finally a repository of information and data. On the other hand accredited Travel Agents have to follow ARC & Airlines rules in providing the services to the passengers.

IATA by the way is the organization that established the 3 letter codes for airports that is used to identify to make bookings (PNRS) in GDS or facilitate bag connections.

The FTR are accessible through the GDS.

Those agents that wish to work with the Government must have certain capabilities to function and perform the services required like:

  • Corporate/Government experience to conduct official travel services
  • Past performance will allow the government to assess their quality.
  • Describe the way they do Day-to-day operations and how they manage that.
  • Fulfilling the Scope of Work in technology, reservations, profile keeping, ticketing, emergency services, compliance with Fly America Act and many other capabilities that are mentioned in the RFP.

 Commissions and Transactions Fees:

Once the airlines phased out paying commissions to Travel Agents, those agents in order to maintain their operations resorted to collect the lost income by imposing a system of fees whether management fees or transaction fees as it is logical that they cannot do their jobs for nothing.

Transaction fees are a complex issue. It requires a lot of calculations modules. Each travel agent has his unique way of doing these calculations that might be based on :

  • Real and actual experience
  • Standard accounting procedures
  • Travel industry trends
  • Risk assessment
  • Industry statistical data from either ARC or IATA.

Management fees could be a lump sum figure for the whole travel services during a month.


Government contracting for travel management services began in early 80’s when a pre-world war 1 prohibition on the use of travel agent services was removed. Those accredited travel agents, once they are under contract to the Government, DoD calls them Commercial Travel Office (CTO) and GSA calls them Travel Management Center (TMC).

There are two methods of contracting for government travel services.

The DoD issue an RFP and GSA Travel Services Solutions (TSS) Multiple Award Schedule (MAS). The awarding of services will go to the winners with the experience, professional accreditation and specific capabilities.

The other method of contracting is Full & Open competition for TMC or CTO to conduct Government travel services. Government will issue a task force order sent to 3 schedule contractors for bids. The best one with value and price is usually selected. Also the Government will always put aside some contracts for small businesses. Large contractors are encouraged to subcontract to small businesses. The TSS Schedule RFP means travel agents have 90-120 days to respond to a bid.

The prices offered are firm however after one year, the governemtn can look into an EPA (Economic Price Adjustment) if needed. The terms for EPA must be negotiated before awarding the contract.

Once a bid has been awarded, implementation starts from dealing with a Project Manager to serve as a single point of reference to oversee all activities of starting the new TMC or CTO or in some cases just a renewal of contract.  If a contractor is being replaced then the new one must work along the old one to have a smooth transition with little inconvenience to travelers.

There are several implementation steps like: Project award, meeting with contractors, assurance of TMC/CTO accreditation, site visits, hiring and training of personnel, equipment, contract start date and any other step needed or come along.

There should be a test run for all activities before the start date.

Once TMCs/CTOs are functioning then they will be using GDS which are called front office. TMCs/CTOs reporting systems linked to GDS data like: Airline ticketing, Hotel Bookings, Car Rentals, Destinations, Fares and other data like CPP usage, CPP expense, unused tickets to provide full reporting to the government.

By: Metri Altwal

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