COMPTROLLER GENERAL OF THE UNITED STATES

COMPTROLLER GENERAL OF THE UNITED STATES

WASHINGTON

GO.

2C.4

June 30, 1980

B-103315

Milton D. Stewart, Esq.

Chief Counsel for Advocacy

Small Business Administration -mL G

Washington, D.C.

20416

X

l/

Dear Mr. Stewart:

Subject:

-

Your letter of-April 25, 1980,

concerning ourbyrohibition on the

use of travel agents for official

Government travel

and our decision

to lift the prohibition on a caseby-case basis

You request reconsideration of our circular dated

August 207T-1979, in which we stated that we would consider

agency plans for the use of travel agents on the basis of

analyses that adequately demonstrate economies to be

achieved or to test the use of travel agents for the purpose of demonstrating whether savings and efficiencies

will result.

It is your view that our current prohibition

against the use of travel agents for official Government

travel, set forth in 4 Code of Federal Regulations (CFR)

52.3(a), and our exception procedure envisioned in the

circular, are no longer necessary given the requirements

of OMB Circular No. A-76 (A-76); that our efforts are

duplicative of A-76; and that the decision whether to perform transportation services in-house rather than by contract

is a matter of executive policy for consideration under A-76

and is not appropriately within our decision functions.

The current prohibition against the use by Government

agencies of travel agents was promulgated pursuant to the

responsibilities of this Office related to the administration of Government transportation activities.

See 31 U.S.C.

49 (1976); id 66; 49 U.S.C. 66 (1976).

The general policy

conclusions of Circular No. A-76 do not override any

specific requirements applicable to the administration

of transportation activities.

Our prohibition runs to

those functions and activities that are Governmental in

nature and are conducted as an in-house operation whereas

B-103315

Circular No. A-76 runs to commercial or industrial

activities which may be contracted out. Thus the prohibition and the OMB Circular are not duplicative but

address different concerns.

Travel service needs beyond the administrative

requirements of agencies are now met-by dealing directly

with carriers. In the case of the Department of Defense

(DOD), Scheduled Airlines Traffic Offices (SATOs) are

provided by the Air Transport Association. Also, several

Government offices including the Department of State have

a Combined Airline Ticket Office (CATO) by arrangement with

a group of airlines. Other agencies lease teleticketing

equipment. In the first two situations, services are

provided by the carrier at virtually no expense to the

Government. Concerning these services, there is no Government activity to replace by contracting out or to compare

with commercial services. Also, certain Governmental

functions cannot readily be delegated to travel agents;

i.e., filing claims with carriers, disbursing of funds

and accounting, and processing and typing travel orders

and travel advances. Moreover, travel agents cannot easily

replace Government officials in administering Government

travel requirements and regulations. We therefore remain

unconvinced that travel agents can or will provide more

efficient or less costly service than under current

practice.

The use of travel agents would create serious

administrative burdens. Problems, such as selecting an

agent from among a large number of interested firms,

obtaining refunds, and obtaining reasonable assurance of

the capability and financial condition of individual agents,

are concerns we hesitate to leave to the discretion of

individual agencies at this time.

In addition to the report of the Subcommittee on

Small Business Problems, House Committee on Small Business

(Small Business Subcommittee), you have cited, the House

Appropriations Committee has voiced its concerns on the

subject of the Government's use of travel agents. Regarding a Department of Defense plan to acquire a computerized

travel reservation service for a travel agent experiment,

the Committee found that DOD's use of SATOs was at no cost

to the Government except for providing space for the

-2-

B-103315

operation and that SATOs provided virtually all of the

DOD's travel needs. "In view of the confusion over this

matter and the likelihood that further 'in-house' procurement and use of travel agents will end up costing the

government more money * * *," the Committee ordered DOD to

suspend the procurement or leasing of all automated equipment and travel agency services pending completion of a

report on the matter. H.R. Rep. No. 96-450, 96th Cong.,

1st Sess. (1979), p. 164-166. This action by the House

Committee on Appropriations supports our view that a

blanket lifting of the prohibition and leaving the decision

to individual agencies would not be appropriate at this

time.

As we stated in our letter to the Honorable Marty

Russo, Chairman of the Small Business Subcommittee, by

relaxing our restriction on the use of travel agents to

permit lifting the ban on a case-by-case basis, we will

learn whether agencies can demonstrate cost savings and

improved efficiency. After we have had some experience

with agency proposals for which exceptions are granted

and after we and other interested parties, including

Congress, have had an opportunity to evaluate the results,

we will be in a better position to determine whether the

prohibition should be removed.

In this connection, we recently granted an exception

from our prohibition to both the Department of Labor and

the Department of State to carry out tests for a one-year

period.

Sincerely yours,

Acting Comptroller eneral

of the United States

-3-