DTMO Awarded Best-in-Class Designation
By Betsey Grundy, Defense Travel Management Office
Last November, the Office of Management and Budget (OMB) designated the US Government Rental Car Program, managed by the Defense Travel Management Office (DTMO), as a “Best in Class” sourcing solution (BIC). The program provides special rental benefits and reduced rates to federal employees traveling on official business. It is designed to meet the needs of the federal traveler, and provide quality rentals through rental car companies at over 10,000 rental locations worldwide. This designation recognizes the program as an effective and efficient government-wide sourcing solution that should be used by all federal agencies.
A BIC designation is a way to distinguish those sourcing solutions that meet certain performance criteria outlined by OMB under its effort to improve the way the government acquires goods and services. Category Management, as it is known, is a sourcing approach to buy services smarter, more strategically, and as a single enterprise, resulting in increased effectiveness, eliminated redundancies, and reduced costs. To determine the “categories,” OMB identified ten main areas of federal spend, with Travel and Lodging as one. Where possible, BIC will be designated in each category. The value of BIC designations is sharing best practices, leveraging lessons learned and expertise, and providing efficient acquisition management solutions.
To be designated as BIC, the sourcing solution must meet five key criteria that include using rigorous requirements definitions and planning processes, appropriate pricing strategies, data-driven demand management strategies, category and performance management practices, and passing an independent validation and review by the category team.
DTMO administers the program through an agreement with participating rental companies. Since implementing the current US Government Rental Car Agreement, DTMO has worked to enhance management practices for the US Government Rental Car Program through:
- Transactional data reporting – DTMO actively uses performance metrics, collects and analyzes data, and monitors performance to enable true data-driven sourcing decisions. DTMO continues to work with the rental car vendors to refine data reporting to support the BIC requirement to delineate total spend by federal agencies.
- Stakeholder integration – DTMO hosts annual meetings with federal agency stakeholders and rental car vendors in an effort to continually improve the program. DTMO conducts program reviews, and assesses specific agency and collective requirements to target solutions that meet customer needs.
- Savings – The US Government Rental Car Program provides a unique opportunity to leverage the government’s buying power. The acquisition strategy allows for an endless competition model because every rental is competed between all site suppliers. Program benefits such as free collision/damage waiver or loss/damage waiver, liability insurance coverage, and no charge for additional or underage drivers, are bundled into a single five dollar daily charge, called the Government Administrative Rate Supplement (GARS). These benefits would cost more if paid separately. The program saved over $20 million in fiscal year 2017 when compared to Business Travel News Top 100 corporate programs.
DTMO’s approach provides end-to-end program management of the US Government Rental Car Program to include acquisition, claims processing and program inquiries, supplier management, stakeholder engagement, and data analysis.
DTMO supports the government’s broad strategic sourcing initiative to manage acquisitions effectively, and wherever possible, join together with agencies to negotiate the best deal for the taxpayer. DOD staffs and manages the US Government Rental Car Program with a minimal footprint at no cost to agencies. When benchmarked against industry standards in several categories, DOD’s end-to-end approach is rated highly as a result of its supplier management that includes monthly performance data and reporting; the service it provides its customers, including its damage claims and assistance tool; supplier negotiations with rates determined by competition and market economics; and monitoring supplier spend through the tracking of program base rates.
To retain the BIC designation, the program must be reviewed annually. As part of that process, DTMO must meet these requirements:
- Complete efforts to delineate rental car spend by federal agencies.
- Provide the General Services Administration (GSA) Category Management Program Management Office quarterly/annual spend and cost savings reports in order to demonstrate program value.
- Participate in category management BIC annual program reviews where category managers review the program to ensure it continues to meet the five criteria necessary for BIC designation.
The BIC designation is by no means an end state. The department plans to continue to improve the program to realize additional efficiencies, cost savings, and improve processes. As one step to further improvement, DTMO continues to push the GSA to implement the mandatory program requirement in the Federal Travel Regulations, the policy regulations that govern non-DOD agency travel. The program is already mandated for DOD use and mandating it across the federal government would increase savings, provide benefits and improve duty of care for federal travelers, and lead to better fidelity of total program spend data.
Additionally, over the next year, DTMO plans to work with the rental car vendors and stakeholders to update the US Government Rental Car Agreement. The goal of the updated agreement is to improve the program through clarified terms and conditions, the application of best practices, and strengthened partnerships.
Additional information on the US Government Rental Car Program is available on DTMO’s website at www.defensetravel.dod.mil/site/rentalCar.cfm.