oversight

Economies Available if Federal Employees Rent Cars Under GSA Contracts

Published by the Government Accountability Office on 1971-08-11.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

Economies Available if
Federal Employees Rent Cars
Under GSA Contracts               R-160787




General Services Administration




UNITED STATES
GENERAL ACCOUNTING                   OFFICE
               UNITED STATES GENERALACCOUNTINGOFFICE
                          WASHlNGTON,     D.C.   20548




B-l    60781




Dear     Mr.   Kunzig:

       This     is our report  on economies   available              if Federal
                                                                         ,-,’
employees       rent cars under GSA contracts.

         Copies of this     report are being          sent to the Director,
Office    of Management       and Budget.

                                          Sincerely       yours,




                                          Director,       Civil    Division

The Honorable        Robert  L. Kunzig
Administrator,       General   Services          :. f,
  Administration




                         50 TH ANNIVERSARY       1921- 1971
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I                           'GENERALACCOUNTINGOFFICE                                ECONOMIES AVAILABLE IF FEDERAL
I                           Z'EPORTTO THE ADMINISTRATOR,                            EMPLOYEESRENT CARS UNDER GSA
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                             GENERALSERVICESADMINISTRATION                          CONTRACTS
1                                                                                  ,General Services Administration
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 I                          DIGEST
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                            WHYTHE REVIEWWASMADE
  I
    I                             In April   1967 the General Accounting      Office (GAO) reported on ways that
    I
                              I   the General Services    Administration     (GSA) could reduce Government ex-                 ,-y7
    I
    I                             penditures   for rental  cars.     (See p. 5.)
    I
    I                             GAO wanted to know whether the actions     taken by GSA as a result  of that
    I                             report were successful.   GAO specifically     examined into the car rental
    I
    I                             rates and models and the extent of insurance      coverage obtained by Gov-
    I                             ernment travelers.
    I
     I
     I                            When Government vehicles     are not available, Government travelers      on of-
     I                            ficial  business may rent cars (1) from commercial     car rental    firms under
     I
     I                            GSA contracts   at special   low rates obtained as the result     of competitive
        I
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                                  b%ding or (2) from other firms under informal      arrangements     at discounted
        I                         rates offered   to preferred    customers.
        I
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        I                         The Government expends about $9 million    annually   for            the rental   of cars.
        I                         Of this amount, about $7.4 million   is incurred    under            the informal   ar-
        I
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                                  rangements.
        I
        I
        I
        I                   FINDINGS AND CONCLUSIONS
            I
            I                     Following     GAO's April     1967 report,     GSA instructed    agencies     to use its
            I                     rental    contracts     to rent cars whenever possible         and simplified      the
            I
            I                     contract    ordering      and billing  procedures.       GSA also issued a "Trav-
            I                     eler's    Pocket Guide" to provide         information    about its car rental        con-
             I                                 (See p. 6.)      These actions      should have brought about greater
             I
                                  tracts.
             I                    use of rental       cars under GSA contracts         than was actually     obtained.
             I
             I
             I                    GAO's current  review of car rental     practices at seven civil     agencies
                                  showed that the majority     of cars rented by Government travelers      were
             I
             I                    rented under informal    arrangements  with commercial   rental  firms.
             I                    (See p. 7.)
             I
             I
             I                    GAO examined into 350 individual    car rentals made during    1969 under
                I                 informal  arrangements in locations   where GSA contracts   were in effect.
                I
                I                 Savings of 36 percent  of the rentals   could have been realized    if the
                I                 employees had
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                 I                                                                                 NJG.lL1971
                  I          Tear Sheet
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                                                                                                    I
         --rented   cars under    the GSA contracts,       rather   than under       the informal   I
            arrangements;                                                                           I
                                                                                                    I
                                                                                                    I
         --rented  less costly models       (for   example,    compacts     rather    than stan-
                                                                                                    !
            dard sedans); and,                                                                      I
                                                                                                    I
                                                                                                    I
         --not purchased collision       insurance   coverage in excess of the $lOO-                I
            deductible    insurance  provided by the commercial firms under the                     I
            informal   arrangements.     (See pQ 7.)                                                I
                                                                                                    I
                                                                                                    I
    Most of the seven agencies required   that employees rent cars under GSA                        I
                                                                                                    I
    contracts  when Government cars were not available   and that they rent the                     I
    less costly models available.    These requirements  were not followed.                          I

                                                                                                    I
    The agencies did not have uniform policies          on the purchase of additional               I
    collision   insurance   coverage.     In June 1970 GAO reported        to the Office            I
    of Management and Budget that a uniform Government-wide              policy on colli-               I
    sion insurance     was needed.    In June 1971 that Office       was preparing       an
                                                                                                        I
    amendment to the Government's       standard travel    regulations      which would                 I
    not allow reimbursement      of the cost of additional       insurance     coverage.                I
                                                                                                        I
    (See p. 10.)                                                                                        I
                                                                                                        I
    Because of the potential   savings,   rental   cars, when needed, should be                         I
                                                                                                        I
    obtained under GSA contracts    whenever possible.      The less costly models                      I
    should be rented whenever feasible.        (See p. 13.)                                             I
                                                                                                        I
                                                                                                        I
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                                                                                                         I
RECOiWdENDATIONS
              OR SVGGESTIOW                                                                              I
                                                                                                         I
    GSA should reemphasize to the agencies             the importance      and benefits of               I
                                                                                                         L
    renting  cars under GSA contracts  and of            renting    the less costly models.              I
    GSA and the agencies should attempt to             better    inform Government trav-                 I
                                                                                                         I
    elers of the economies available  under            the GSA contracts.                                I
                                                                                                          I
                                                                                                          I
    In view of the pending policy change regarding              collision      insurance,    GAO          I
    is not making any suggestion  on that matter.                                                         I
                                                                                                          I
                                                                                                            I
                                                                                                            I
AGENCYACTIONSAND UNRESOLVED
                          ISSUES                                                                            I
                                                                                                            I
                                                                                                            I
    GSA made a survey of 17 agencies concerning       the mandatory use of GSA
                                                                                                            I
    contracts    for renting  cars. Flany agencies stated that they were un-                                I
    willing   to agree to the mandatory use of GSA contracts          for renting                           I
                                                                                                             I
    cars because of inconvenience,     unsatisfactory    contractors,     or the lack                        I
    of contracts     in some areas.                                                                         I
                                                                                                            I
                                                                                                            I
    In view of the agencies' responses, GSA plans to set up an interagency                                  I
    task force to study ways to make the GSA rental contracts more accept-
                                                                                                                I
    able.                                                                                                       I
                                                                                                                I
    GAO discussed    the need for an effective          Government-wide   policy       on use                   I
                                                                                                                I
    of GSA contracts    for renting cars with          officials   of the Office       of                       I
                                                                                                                I
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                                                                                                                I
                                                                                                                I
                                                    2                                                           I
                                                                                                                I
                                                                                                                I
I             .
I                   Management and Budget.     They plan    to issue a policy   statement   encouraging
I                   the use of GSA contracts    and less    costly models.
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1
I                   The foregoing   plans, if effectively    implemented,   should   be beneficial
I
I                   in bringing   about economies in renting     cars.
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        I   Tear Sheet
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                         Contents
                                                         Pane
DIGEST                                                     1

CHAPTER

  1        INTRODUCTION                                    4
  2        PRIOR GAOREPORTAND RESULTANTACTIONS             5

  3       SAVINGS AVAILABLE THROUGHMOREECONOMICAL
          METHODSOF OBTAINING COMMERCIALRENTAL CARS        7

  4        CONCLUSIONS,PROPOSALS,AND AGENCYACTIONS        13

  5        SCOPEOF REVIEW                                 16

APPENDIX

  I        Letter dated August 21, 1970, from the Act-
             ing Administrator  of General Services to
             the General Accounting Office                19

                          ABBREVIATIONS

GAO        General Accounting     Office

GSA        General Services     Administration




                                                                “,. ‘. .
GENERALACCOUNTINGOFFICE                              ECONOMIES AVAILABLE IF FEDERAL
REPORTTO THE ADMINISTRATOR,                          EMPLOYEESRENT CARS UNDER GSA
GENERALSERVICESADMINISTRATION                        CONTRACTS
                                                     General Services Administration
                                                     B-160781


DIGEST
------

WHYTHE REVIEWWASMADE
     In April   1967 the General Accounting   Office  (GAO) reported on ways that
     the General Services Administration     (GSA) could reduce Government ex-
     penditures   for rental cars.   (See p. 5.)

     GAO wanted to know whether the actions     taken by GSA as a result  of that
     report were successful.   GAO specifically     examined into the car rental
     rates and models and the extent of insurance      coverage obtained by Gov-
     ernment travelers.

     When Government vehicles     are not available, Government travelers     on of-
     ficial  business may rent cars (1) from commercial car rental       firms under
     GSA contracts   at special   low rates obtained as the result   of competitive
     bidding or (2) from other firms under informal     arrangements   at discounted
     rates offered   to preferred    customers.

     The Government expends about $9 million    annually for             the rental   of cars.
     Of this amount, about $7.4 million   is incurred   under            the informal   ar-
     rangements.


FINDINGS AND CONCLUSIONS
     Following     GAO's April 1967 report,      GSA instructed     agencies to use its
     rental    contracts     to rent cars whenever possible       and simplified      the
     contract    ordering      and billing procedures.      GSA also issued a "Trav-
     eler's    Pocket Guide" to provide information          about its car rental        con-
     tracts.      (See p. 6.)      These actions should have brought about greater
     use of rental       cars under GSA contracts      than was actually      obtained.

     GAO's current  review of car rental     practices at seven civil     agencies
     showed that the majority     of cars rented by Government travelers      were
     rented under informal    arrangements   with commercial rental   firms.
     (See p. 7.)

     GAO examined into 350 individual    car rentals made during 1969 under
     informal  arrangements in locations   where GSA contracts  were in effect.
     Savings of 36 percent of the rentals    could have been realized  if the
     employees had
             --rented   cars under   the GSA contracts,       rather   than under       the informal
                arrangements;

             --rented  less costly models (for      example,      compacts     rather    than stan-
                dard sedans); and,

             --not purchased collision      insurance   coverage in excess of the $lOO-
                deductible    insurance provided by the commercial firms under the
                informal   arrangements.    (See p. 7.)

    Most of the seven agencies required  that employees rent cars under GSA
    contracts  when Government cars were not available  and that they rent the
    less costly models available.   These requirements  were not followed,

    The agencies did not have uniform policies        on the purchase of additional
    collision   insurance coverage.     In June 1970 GAO reported to the Office
    of Management and Budget that a uniform Government-wide policy on colli-
    sion insurance was needed.      In June 1971 that Office was preparing          an
    amendment to the Government's     standard travel    regulations     which would
    not allow reimbursement    of the cost of additional       insurance   coverage.
    (See p. 10.)

     Because of the potential   savings,   rental  cars, when needed, should be
     obtained under GSA contracts    whenever possible.     The less costly models
     should be rented whenever feasible.       (See p. 13.)


RECOMWENDATIONSOR SUGGESTIONS

    GSA should reemphasize to the agencies                the importance      and benefits of
    renting  cars under GSA contracts  and of               renting    the less costly models.
    GSA and the agencies should attempt to                better    inform Government trav-
    elers of the economies available   under              the GSA contracts.

     In view of the pending       policy change regarding          collision      insurance,    GAO
     is not making      any suggestion   on that matter.


AGENCY ACTIONS AND UNRESOLVEDISSUES

    GSA made a survey of 17 agencies concerning      the mandatory use of GSA
    contracts    for renting  cars. Kany agencies stated that they were un-
    willing   to agree to the mandatory use of GSA contracts         for renting
    cars because of inconvenience,    unsatisfactory    contractors,     or the lack
    of contracts     in some areas.

     In view of the agencies' responses, GSA plans to set up an interagency
     task force to study ways to make the GSA rental contracts more accept-
     able.

    GAO discussed the need for an effective                Government-wide   policy       on use
    of GSA contracts for renting cars with                officials   of the Office       of


                                                      2
Management and Budget.     They plan   to issue ,a policy   statement   encouraging
the use of GSA ccntracts    and less   costly  models.

The foregoing   plans,  if effectively   implemented,   should   be beneficial
in bringing   about economies in renting     cars.
                              CHARTER1

                            INTRODUCTION

      Rental cars can be obtained by Federal Government trav-
elers under GSA rental contracts       that have been awarded to
commercial car rental firms.       The   GSA contracts    are entered
into to obtain cars to supplement the Government-owned cars
in GSA's interagency    motor pools.      In December 1969 about
150 rental contracts    were in effect throughout       the 10 GSA
regions.    These contracts   which are awarded annually,       pri-
marily on the‘basis    of formal advertising,      provide for car
rental services in designated areas, such as airports,            air
bases, cities,   or a group of towns within a region.

        The contracts  usually provide that the commercial firms
deliver     the cars to airports,  railroad     stations, or other
arrival    points of the travelers    within the number of minutes
specified--    usually 15 minutes-- and pick up the cars at these
or other points after the travelers         have finished  using
them.

        Also cars are offered for short-term          rental    (by the
hour, day, week, or month) at airports            and other locations
by firms not under GSA contract.           Civilian    employees and
military    personnel of Government agencies, in conducting of-
ficial    business,  frequently     use such cars.       Employees of
Government contractors       and subcontractors       performing work
under cost-reimbursable-type         contracts    also use such cars,
The Government traveler        obtains the same 20-percent discount
rate that is extended to other preferred             customers,     This
rental procedure is referred         to herein as an informal ar-
rangement.
      On the basis of information obtained from GSA and a
large commercial rental firm, we estimate that the Govern-
ment spends each year for the rental of cars about $9 mil-
lion, of which about $7.4 million   is incurred under the
informal   arrangements.
                              CHAPTER2

            PRIOR GAO REPORTAND RESULTANTACTIONS

      In our April 1967 report,1   we stated that rental rates
obtained under the GSA contracts     were substantially   lower
than the rental rates obtained under informal arrangements.
It appeared to us that the more favorable       rates were ob-
tained under the GSA contracts    primarily   because such con-
tracts usually were awarded through formal advertising.         We
estimated that Government-wide savings of as much as
$350,000 annually could be realized      if cars being rented by
the using agencies and contractors     under informal arrange-
ments were rented directly   from the commercial firms at GSA
contract  rates.

       We proposed that GSA reexamine, in consultation            with
major using agencies, its role in the rental of commercial
cars for Government use, with a view to making a better re-
sponse to agency needs and increasing           the relative    share of
such rentals made under GSA contracts.             We expressed the
belief   that, if the GSA contracts       were revised to allow
agencies and authorized     contractors      to rent cars directly
from the commercial firms instead of through the GSA inter-
agency motor pools and if the related GSA lo-percent              sur-
charge for administrative     costs were eliminated,         the rental
procedures would be simplified,        less time would be required
to obtain cars, and the agencies'         reluctance     to rent cars
under GSA contracts    might be overcome,

       GSA agreed with our proposal and established    an inter-
agency task group to look into the matter of providing        car
rentals through GSA contracts.      The task group recommended
that agencies be permitted     to obtain rental cars directly
from GSA contractors    when Government cars are not available
from interagency    motor pools.


1Report to the Congress entitled  "Savings Available to the
 Government Through Revision of the Method of Supplying Com-
 mercial Rental Cars" (B-160781, April 17, 1967).
       In December 1968 GSA distributed     to the heads of Fed-
eral agencies GSA Bulletin      FPMR E-59 which provided for di-
rect ordering and billing     between the using agency and the
GSA contractor.    The bulletin    noted that it had been deter-
mined more advantageous for agencies to make arrangements
for Government travelers     to rent cars under GSA contracts    at
locations   where such cars were available.       The bulletin
stated that:

      "Agencies are expected to utilize    GSA car rental
      contracts when interagency   motor pool vehicles
      are not available  or it is otherwise determined
      to be more economical to the Government to use
      commercial rental vehicles."

       The substance of GSA Bulletin      FPMR E-59 has been incor-
porated in the GSA Federal Supply Schedule entitled            "Indus-
trial   Group 751 Motor Vehicle Rental Without Driver,"           which
has been distributed      to all Federal agencies.       This schedule
sets forth the provisions        of the GSA car rental contracts
and provides    information    on contract numbers, contractors'
names and addresses,      dispatching   points, delivery     and pickup
points,   addresses and telephone numbers for making reserva-
tions,   and terms of payments,

        In addition,     GSA has issued a 'Travelers       Pocket Guide"
which provides travelers           with an alphabetical    list of States,
cities,    contractors,       contract   numbers, telephone nzrmbers,
and types of vehicles          available   where GSA has commercial car
2ental services.          This guide states,     as does the bulletin,
that agencies are expected to utilize             GSA commercial car
rental contracts        to obtain cars when interagency        motor pool
cars are not available          or when it is otherwise determined to
be more economical to the Government to use commercial rental
cars.




                                    6
                                        CHAPTER3

                SAVINGS AVAILABLE THROUGHMOREECONOMICAL

              METHODSOF OBTAINING COMMERCIALRENT& CARS
      Our review of car rental practices   of seven civil   agen-
cies showed that the majority    of commercial cars rented by
Government travelers   in the conduct of official  business
during calendar year 1969 were rented under the more expen-
sive informal arrangements,   rather than under GSA car rental
contracts.
      Our examination into 350 individual   car rentals made un-
der the informal arrangements in locations     where GSA con-
tracts were in effect showed that savings of about 36 percent
of the total cost of the rentals could have been realized       if
the employees had (1) rented cars under the GSA contracts,
rather than under the informal arrangements,      (2) rented less
costly models, and (3) not purchased collision       insurance
coverage in excess of the $lOO-deductible     insurance provided
by the commercial firms under the informal arrangements.
The rental of cars under GSA contracts    would have eliminated
any need for such insurance payments since the contracts
provided full collision   insurance coverage.
     Representatives    of the seven agencies told us that most
of the commercial cars rented by the agencies' employees had
been obtained under the informal arrangements.     The follow-
ing table provides a breakdom of the estimated savings on
the 350 individual   car rentals reviewed by us.
                                    Estimated          savings
                                     Less                                     Total     Percent
                         GSA con-   costly             Collision    Total    rentals        of
     Department           tracts     model             insurance   savings     tested   savings
Agriculture               $   860   $        270        $   285    $1,415    $ 4,470
Commerce                      345             85            105        535     1,790
Health,     Education,
   and Welfare                940            240            190     1,370       3,425      40
Housing and Urban
   Development                865            140           195      1,200       2,875      42
Interior                      610            120           165         895      2,520      36
Labor                         435             80           100         615      1,445      43
Transportation                435       8$               - 30          550      1.525      36
     Total                $4.490    $1.020
                                     ---                $1.070     $6.580    $18.050
                                                                              __-          36



                                                   7
OBTAINING RENTAL,CARS

       The Government's standard travel regulations              assign the
using agencies the responsibility             for determining    the mode
of travel    that is most advantageous to the Government.                Our
examination     of the written      policies     of the seven civil    agen-
cies showed that five agencies had regulations               which pro-
vided that, in cases where Government-owned cars were not
available,     the traveler   utilize      cars obtained under GSA
contracts.      The remaining two agencies,           the Departments of
the Interior      and Transportation,        did not have Department-
wide regulations      on this matter.         The Department of Trans-
portation?s     Federal Aviation Administration           had such re-
quirements,     however, but they included GSA contracts             only as
an alternative      method of obtaining         commercial rental cars.

      As stated previously,     in practice   most rental cars
were rented by employees of the seven civil         agencies under
informal arrangements.      Even with the usual 20-percent       dis-
count given to Government travelers        under the informal ar-
rangements, the use of GSA rental contracts        would have been
less costly for almost all the 350 car rentals we examined
into.   GSA contracts  were in effect at the rental locations
and at the time that these cars were rented.          As indicated
by the above table, the use of the GSA contracts          would have
saved the Government about $4,490, or 25 percent of the to-
tal amount of car rentals     tested.
RENTING-LESS COSTLY MODELS
        Commercial     rental  firms generally  offer             the following
four    types     of cars under the GSA contracts,

       Type   I            Type II                   Type III             Trpe IV
American Hornet      American Rebel             American Ambassador   Station   wagon
Plymouth Valiant     Chevrolet   Chevelle       Chevrolet   Impala
Chevrolet   Nova     Dodge Coronet              Chevrolet  Be1 Air
Ford Falcon          Ford Fairlane              Chevrolet  Biscayne
Dodge Dart           Plymouth Belvedere         Ford Custom
                                                Ford Galaxie 500
                                                Ford LTD
                                                Plymouth Fury I
                                                Plymouth Fury II
                                                Plymouth Fury III


                                            8
The least costly of these cars is type I; however, in some
cases, GSA contracts   did not offer this type of car.   Al-
though daily rental rates varied,    frequently there was a
difference  of $1 between the rental rate for each type of
car offered under an individual    contract.

       Although the regulations      of five of the seven agencies
require that the traveler       obtain the less costly model--the
Departments' of Agriculture      and the Interior    do not have reg-
ulations    on this matter--we    noted that, for about 280 of
the 350 car rentals       in our test, the travelers    had obtained
type II or type III cars.        Had the travelers    selected type I
cars, when available       under the GSA contracts,    or type II,
when type I was not available,        the Government would have
realized    savings of about $1,020, or over 5 percent of the
total rentals     tested.
COLLISION INSURANCE
        The GSA rental contracts    provide insurance covering li-
ability,    loss, or damage to the rental car or to any prop-
erty when the liability,     loss, or damage is attributable     to
the use of the rental car.       Also the contracts   provide full
collision     coverage.

      Liability  and $lOO-deductible collision   insurance is
provided under the informal arrangements.      The traveler  can
obtain full collision   coverage for a payment of $2 a day.

       Five of the seven agencies have regulations       regarding
the purchase of full collision       insurance coverage.     The De-
partments of the Interior     and Labor do not have such regula-
tions.     Of the five agencies that have such regulations,        the
Departments of Agriculture;      Commerce; and Health, Education,
and Welfare allow purchase of full coverage.         The Department
of Housing and Urban Development and the Department of
Transportation's     Federal Aviation Administration     do not,

        For more than 250 of the car rentals           included in our
test, the travelers       purchased full collision         coverage.     In
all of these cases, the agencies allowed reimbursement for
the cost of the additional        coverage even though some of the
payments were made by the Department of Housing and Urban
Development's     and Federal Aviation Administration's            travel-
ers.     If the travelers     had rented the cars under GSA con-
tracts,    the additional     expenditures     for full collision      cov-
erage would have been unnecessary and savings of $1,070, or
6 percent of the total rentals          tested, would have resulted.
       Because of the lack of uniformity    among agencies' poli-
cies and practices     relating to the reimbursement of the cost
of full collision    insurance coverage, we issued a report on
June 30, 1970, to the Director,     Bureau of the Budget (now
Office of Management and Budget), concerning the need for a
uniform Government-wide policy on collision      insurance.  In
June 1971 the Office of Management and Budget was preparing
an amendment to the Government's standard travel regulations
which would not allow reimbursement of the cost of the addi-
tional   insurance coverage.



                                     10
ILLUSTRATIVE CASES

       The following  selected examples of car rentals by agency
personnel illustrate    the substantial savings that would have
resulted   had the rentals been made under GSA contracts
rather than under informal arrangements.

     1. A traveler  from the Department of Agriculture   rented
        a car at the Salt Lake City, Utah, air terminal     for
        23 days at a cost of $266.90 under an informal ar-
        rangement.    If he had rented a car available  at the
        terminal under a GSA contract,   the rental cost would
        have been $133.38 and the Government would have
        saved $133.52, or 50 percent of the rental cost.

     2. A traveler  from the Department of the Interior
        rented a car in Birmingham, Alabama, for 5 days at a
        cost of $151.02 under an informal arrangement.   Had
        he rented a car under a GSA contract  in effect in
        the Birmingham area, it would have cost $91.03 and
        the Government would have saved $59.99, or 40 per-
        cent of the rental cost.
     3. A traveler    from the Department of Transportation
        rented a car at the Salt Lake City, Utah, air termi-
        nal for 1 week at a cost of $194.38 under an infor-
        mal arrangement.      If he had rented a car under the
        GSA contract,     the cost would have been $94.03 and
        the Government would have saved $100.35, or 52 per-
        cent of the rental cost.

SIMILAR GAO EXAMINATIONAT DEPARTMENTOF DEFENSE

      We issued a report to the Secretary of Defense
(B-160781, June 17, 1970) based on a similar        examination of
the Navy's car rental practices    in which we stated that a
large number of travelers  were obtaining     cars through
sources other than GSA motor pools or GSA contracts         with
commercial rental firms.   This examination differed        from our
current review in that consideration    was given to the use of
GSA motor pool cars as an additional    alternative     to the use
of commercial rental cars obtained under the informal ar-
rangements.


                                 11
      Our review of 3,240 travel and commercial vouchers for
car rentals   in the September 1969 accounts of two Navy Re-
gional Finance Centers showed that 83 percent of the rentals
(2,701 out of 3,240) could have been made at lower rates.
At most of the cities   where these cars were rented, GSA
maintained motor pools and also provided for the rental of
cars under its contracts.    We stated that obtaining    cars un-
der either of these methods was less costly than obtaining
them under the informal arrangements.     If maximum use had
been made of GSA motor pool cars and contract     rental cars,
the total cost of the 2,701 rentals could have been reduced
from $133,160 to $44,080, a difference    of $89,080, or 67
percent,

     In August 1970 an official   of the Department of Defense
told us that steps had been taken to encourage the use of
the most economical car service available      and that further
study would be given to more efficient    distribution    of cur-
rent information  concerning car rentals,    the location    of GSA
motor pools, and the location   of GSA contractors.

     We furnished  copies of our report to the Administrator
of General Services and to the Director,  Office of Manage-
ment and Budget,




                                12
                              CHARTER4

         CONCLUSIONS,PROPOSALS,AND AGENCYACTIONS
       In view of the opportunities      for economies, we believe
that cars should be rented under GSA contracts whenever
possible-- recognizing,     of course, that Government-owned cars
should be the first     choice.    We believe also that the less
costly models available      should be rented, whenever feasible.

        Although actions taken by GSA after the issuance of
our April 1967 report were designed to bring about greater
use of the GSA rental contracts,        our current review indi-
cated that travelers      still  were not making sufficient    use
of the GSA contracts      for renting cars.     We believe that one
of the reasons greater use has not been made of the GSA
rental contracts     is that travelers    have not been made suf-
ficiently     aware of the policies    on the use of the contracts.

       In our draft of this report, we proposed to the Admin-
istrator   of General Services that GSA, in consultation     with
using agencies, reemphasize the importance and benefits        of
using GSA contracts   for renting cars and of renting the less
costly models when Government cars are not available.        We
proposed also that GSA and the agencies explore means of
making Government travelers     more aware of the GSA contracts
and the economies they offer.      We did not make a proposal
regarding collision   insurance,   in view of the action pending
by the Office of Management and Budget to amend the Govern-
ment's standard travel regulations      to provide for a uniform
Government-wide policy on this matter,

       In view of the need for a Government-wide policy on
using GSA contracts     for renting cars and on renting        the less
costly models, we proposed further        in our draft report that
the Director,    Office of Management and Budget, issue a
policy statement to all Federal agencies which would re-
quire the use of GSA contracts        for renting cars and require
the renting of less costly models unless not feasible            or
practicable.     An example of a situation       where it might not
be feasible   or practicable     to rent a car under a GSA con-
tract could involve the immediate need for a rental car for
only a couple of hours when a contract          car is not immedi-
ately available.      The benefits   of obtaining     a rental car

                                  13
under a GSA contract  that offered pickup service within
15 minutes could be offset by the time lost in picking up
and returning  the GSA rental car.
       By letter     dated August 21, 1970 (included          as the ap-
pendix),the      Acting Administrator       of General Services,     in
commenting on our draft report,            stated that GSA had concluded
that savings would be enhanced if the use of GSA contracts
for renting cars was made mandatory.              He stated also that
GSA had written        to 17 agencies asking for their views and
that the agencies'        replies   indicated    that many agencies
were unwilling       to agree to the mandatory use of GSA con-
tracts for various reasons, including              inconvenience,   unsat-
isfactory    contractors,       and absence of contracts       in some
geographical      areas.

      In  view of the agencies' responses, the Acting Admin-
istrator    stated that he was proposing to set up an inter-
agency task force that would work to improve GSA's contracts,
after which GSA would again seek to interest         the agencies
in the primary-use       (mandatory-use)  concept.   He said that
in the interim GSA planned to consult with major using
agencies to determine what steps could be taken that would
reemphasize to Government travelers        the importance of using
the GSA contracts      for renting cars and of renting less
costly models.      In June 1971 a GSA representative      told us
that GSA was preparing       an agenda for the meetings of the
interagency     task force.

       We did not examine into the merits of the agencies'
complaints    because they will be covered in the meetings of
the interagency     task force.    We recognize that, to the ex-
tent these complaints are valid,         they must be considered
in improving the GSA contracts         and making the use of the
contracts    mandatory.    We believe that the task force should
consider ways of getting      the large car rental firms inter-
ested in obtaining      more GSA contracts.      Their participation
should help to minimize inconvenience         and the other problems
indicated    by the agencies'    replies   to GSA.
      In Feburary 1971 we discussed our proposal for a
Government-wide policy with officials  of the Office of Man-
agement and Budget.   They advised us that a policy statement
encouraging the use of GSA contracts  for renting cars and
the renting of less costly models would be issued.
                                   14
     6 The foregoing    plans of GSA and the Office of Manage-
ment and Budget, if effectively       implemented, should be
beneficial    in bringing    about economies in the rental of
cars.




                                       t    .




                               15
                                 CHAPTER5

                             SCOPEOF REVIEW

           We reviewed the commercial rental car policies       and
    practices     of seven civil  agencies--the    Departments of Agri-
    culture;     Commerce; Health, Education,     and Welfare; Housing
    and Urban Development; the Interior;        labor; and Transporta-
    tion.     Discussions  rjere held with agency representatives.

          On a test basis, we compared the costs incurred by the
    seven civil    agencies in obtaining     cars under informal ar-
    rangements with the costs that would have been incurred           if
    the cars had been obtained under GSA contracts         at locations
    where the rentals     were made. For the most part, our review
    was confined to rentals made during calendar year 1969. We
    did not attempt to determine whether employees should have
    used alternative     means of transportation,    such as Government-
    owned cars.
                                                                         1
         Our review was made in Washington,D.C.,        at the GSA Cen-
    tral Office and at the above-named seven agencies.
                                                                 *



,




                                     16
r
    .




        APPENDIX




        17
                                                                                      APPENDIXI

                              UNITED      STATES    OF AMERICA
                     GENERAL       SERVICES         ADMINISTRATION
                                   WASHINGTON,      D.C.        20405




AUG 21 1970

Mr. I. M. Crawford
Assistant   Director
United States General
Accounting   Office
Washington,    DC 20548

Dear Mr. Crawford:

Thank you for affording   us an opportunity      to comment on your draft
report “Follow-up   Review on hatters   Relating    to Commercial Rental Cars,”
a copy of which was furnished    us with your letter     of June 29, 1970.

We agree it is important     that agencies take advantage of the low rates
available  under General Services Administration’s              car rental     contracts.
However, because Federal Supply Schedule contracts                for rental     vehicles
are for mandatory use by GSA only, use of the Schedule by other Federal
agencies has been limited.        This has been true despite          the fact that
agencies are aware of the savings available             to them through use of the
Schedule contracts.      In addition      to issuing    FPMR Bulletin      E-59 which you
mention on Page 4 of the draft Report, we have regularly                 distributed       to
all Federal agencies Federal Supply Schedules and Travelers                   Pocket Guides
and amendments which clearly       illustrate      that rates under the Schedules
are substantially   lower than commercial rates for similar                rental    services.
Also, in several GSA regions,        we have written       to major using agencies to
point out the advantages of using the Schedule contracts.                    This action
was prompted by inquiries      from auto rental        contractors    and Members of
Congress indicating    that the Schedule was not being utilized                 as expected.

As a result    of the limited   use of these contracts,    the savings anticipated
by the General Accounting      Office Report of April    1967 entitled    “Savings
Available   to the Government Through Revision     of the Method of Supplying
Commercial Rental Cars” have,not been realized.         ‘We concluded,    therefore,
that these savings can be realized      ouly if Federal Supply Schedule
Industrial    Group 751, Motor Vehicle    Rental Without Driver,      is mandatory
on all Federal Executive      agencies.

Accordingly,      in April   1970 we wrote to 17 agencies asking for their
comments and recommendations         for making these Schedules mandatory.
ReSpOnse8    indicated     many agencies were unwilling      to agree to mandatory use
of the Schedule contracts        for various   reasons including     lack of coverage,
inconvenience,      and poor contractors.      Therefore,    we propose to set up a
task force to develop a plan for improving           GSA’s car rental     service
contracts    before we again attempt to interest          the agencies in the primary
use concept.



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                                                           19
APPENDIX I


  In the interim,      we will  consult with major using agencies to determine what
  steps can be taken to reemphasize to Government travelers             the importance
  and benefits     of using GSA car rental    contracts   when Government vehicles
  are not available      and the benefits   of using the most economical      model of
  vehicles,    including   their use in any instances     where cars must, because
  of lack of options,      be obtained under informal     arrangements.     However,
  we feel it is beyond the scope of our authority          to endeavor to bring
  about compliance with individual        agency policies    on use of GSA contracts
  and most economical      model of vehicles.

  Sincerely,




                                           20                          U.S. GAO. Vash.. D.C.