This saving would be achieved by maintaining travel costs at a level $35 million below the fiscal year 1995 level. Contractor Travel Costs Are Increasing

Travel costs incurred by DOE contractors were reduced in fiscal year 1996, but since then these costs have been increasing. 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. The remaining top destinations were Oakland/San Francisco, California; Las Vegas, Nevada; and Los Alamos, New Mexico. 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. More frequent trips to Russia have significantly contributed to this increase. Most Travel Is Related to Facilities’ Missions

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. The next most frequent travel category was for attending conferences. Figure 2 provides information on the major travel categories reported by DOE contractor sites. 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. However, DOE has had limited success. However, DOE did not establish measures to enforce these targets, nor was it prescriptive as to how these cost reductions were to be achieved. During fiscal years 1996-98, even though the number of contractor staff has dropped and some contractors reported that they increased the use of video and teleconferencing, the number of trips taken by DOE contractors had not been reduced. We noted that contractors have had some success in this area. Millions Spent Annually for Contractor Employees on Assignment to Washington, D.C.

DOE spends millions of dollars on the costs associated with management and operating contractor employees assigned temporarily or permanently to Washington, D.C. DOE’s Office of Inspector General raised concerns about the Department’s awareness of, and control over, these assignments, and DOE has taken actions to reduce the number of employees on assignments and plans to reduce it further. However, a concern remains about the payments that contractors are making to employees on long-term temporary assignments for their increased tax-related costs. For its part, DOE contractors were aware of the targets, but many contractors did not translate this into an overall strategy or plan to achieve lower travel costs. We discussed with officials from the Office of the Chief Financial Officer and the Office of Management and Administration the Department’s efforts to reduce contractor travel costs and obtained their viewpoints on the contractors’ control of travel and efforts to meet the current cost-reduction targets. Living Allowances Currently Provided by Various DOE Contractors for Employees on Assignment in Washington, D.C., Area

Assignments greater than 1 year
55% of current federal travel regulations per diem rate
Additional 10% of base pay field premium
Additional 10% of base pay location allowance
100% of current federal travel regulations rate
Additional 10% of base pay field premium
Additional 10% of base pay location allowance
25% of base pay cost of living differential
55% of current federal travel regulations per diem rate
10% of base pay assignment allowance
100% of current federal travel regulations rate
10% of base pay assignment allowance $1,000 miscellaneous allowance
15%-18% of base pay living differential (declining to zero after 5 years) $1,000 miscellaneous allowance
55% of current federal travel regulations per diem rate
80% of current federal housing allowance
40% “plus-up” of housing allowance to cover additional tax liabilities
55% of current federal travel regulations rate for stays of 1 to 6 months
Actual and reasonable costs for stays of 6 to 12 months $1,000 miscellaneous allowance
Actual and reasonable costs, plus an additional allowance to cover additional tax liabilities $1,000 miscellaneous allowance $1,000 miscellaneous allowance
60%-85% of federal travel regulations lodging rate
60%-85% of federal travel regulations lodging rate
20% of base salary cost of living adjustment (declining to zero after 5 years)

Comments From the Department of Energy

The first copy of each GAO report and testimony is free.
Why GAO Did This Study

Pursuant to a congressional request, GAO provided information on the Department of Energy's (DOE) contractor travel costs, and DOE's efforts to reduce these costs, focusing on the: (1) travel costs incurred by DOE contractors and their primary destinations during fiscal years (FY) 1996 through 1998; (2) purpose of this travel; and (3) success that DOE has had in reducing contractor travel costs and additional actions available to reduce these costs further.

What GAO Found

GAO noted that: (1) travel costs incurred by DOE contractors were reduced from $261 million in FY 1995 to $223 million in FY 1996; (2) since then, travel costs have increased--to $249 million by FY 1998--even though funding to the contractors during this period had been decreasing; (3) about 96 percent of the contractors' travel was to domestic locations, the most frequent of these being Washington, D.C. and the sites of DOE's major laboratories and test facilities: Albuquerque, New Mexico; Oakland/San Francisco, California; Las Vegas, Nevada; and Los Alamos, New Mexico; (4) the most frequent foreign destinations were Russia, the United Kingdom, Germany, France, and Japan; (5) the purpose of most travel was reported as being for business reasons, that is, travel for purposes related to the mission of the facilities; (6) this category included trips to attend meetings or perform research; (7) GAO identified trips that were miscategorized or were of questionable value to DOE; (8) for example, business trips included travel to obtain advanced degrees; (9) the second most frequently cited travel purpose was for attending conferences; (10) according to DOE's Inspector General, the large number of conference attendees is a concern; (11) the Inspector General identified hundreds of DOE contractor staff attending a 1997 conference in Vancouver, British Columbia, resulting in travel costs of about $1 million; (12) DOE's success in reducing contractor travel costs has been limited; (13) although contractor travel costs have increased since FY 1996, they have remained below the FY 1995 level--the level that DOE established as a baseline for calculating contractor travel cost savings; (14) only in FY 1996 did DOE attain the expected $30 million savings in contractor travel by achieving a $38 million reduction in that year; (15) contractors did not continue to achieve such savings because DOE did not enforce its cost reduction targets and some contractors did not have an overall strategy or plan to achieve lower travel costs; (16) DOE spends millions of dollars on travel and other costs for contractor employees on temporary or permanent assignment to Washington, D.C.; (17) DOE has reduced the number of contractor employees in Washington and is planning on further reductions; and (18) however, concerns exist over the additional compensation that contractors are providing for employees on long-term temporary assignments to cover the tax liabilities on their living allowances.