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Public Statements

Department of Defense Appropriations Act, 2006--Continued

Location: Washington, DC



(Purpose: To curtail waste under the Department of Defense web-based travel system)

Mr. COBURN. Mr. President, I ask unanimous consent that the pending amendment be laid aside and call up Coburn amendment No. 2005.

The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. The clerk will report.

The legislative clerk read as follows:

The Senator from Oklahoma [Mr. COBURN] proposes an amendment numbered 2005.

At the appropriate place, insert the following:

SEC. __. None of the funds appropriated by this Act may be obligated or expended for the further development, deployment, or operation of any web-based, end-to-end travel management system, or services under any contract for such travel services that provides for payment by the Department of Defense to the service provider above, or in addition to, a fixed price transaction fee for eTravel services under the General Services Administration eTravel contract.

Mr. COBURN. Mr. President, this is an issue that came to my attention not long after I was sworn in as a Senator. I hope the American public pays attention to the system I am getting ready to describe because way too many things in the Federal Government are bought this way.

The goal of the Defense Travel System was a worthy goal. It said: We travel so much, we ought to have a system that gets us the best fare and can do that on a routine basis so we can save money when Defense Department employees travel. They contracted with a firm to develop that system. It was not necessarily a competitive bid contract either.

What this amendment does is prohibit money from being spent on operations and further development of the system because, quite frankly, it does not work. It works less well than any private travel system that is out there now. It works less well than the GSA's travel system.

We are now close to $500 million being spent with one contractor to develop a system that does not work. The system did not work at the first development stage, which cost $47.3 million, and the Defense Department bailed them out. It did not work. It has never met the requirements or the efficiency or the savings that it was supposed to meet.

It is kind of similar to one of those things you get into and you keep hoping it will work, keep hoping it will work, and then it does not work. Well, the American taxpayers are now on the hook for almost $500 million.

The Defense Department does not even own this program. That was recently changed so the contracting law could be avoided, in terms of going after this contractor on it, because it was not competitively bid, because it was not managed properly.

When you review the DTS system, in 2002, the DOD Inspector General said it should be shut down unless a cost-benefit analysis was prepared that showed the worthiness of its continuation. No analysis has ever been conducted. That was in 2002, and we had only spent about $100 million on it. We are now at $500 million. There is no cost-benefit analysis that has been done. Every Defense Department employee can travel cheaper following some other system than this system. We do not own it. We keep paying for it. We keep paying for the development of it.

The American taxpayers are getting hooked, and yet when we are finished with it, we are still not going to have a system that is as good as what is in the private sector. It is a boondoggle, at best.

Program Assessment and Evaluation testified they were unable to complete an analysis because the DTS office had not even kept enough documentation of their own expenditures to make a reliable assessment.

We have big contracting problems in the Defense Department, and this is the best example I know of that ought to be eliminated tomorrow.

At the end of the seventh year of an 8-year contract, a cumulative total of 370,000 travelers had utilized DTS out of 5.6 million annual DOD travelers. So for $500 million, over the 7 years, we have had 370,000 travelers. It has cost us $1,500 per ticket, not counting the price of the air fare.

There is not anybody in America who would look at this, with any common sense, and say we ought to continue this boondoggle.

The utilization rate for the current calendar year under the Defense Travel System is at 15 percent. That means only one in eight employees of DOD uses this system to buy a ticket. And then they do not always get the best price.

In order to break even with the costs of DTS annualized--in other words, its annual cost--90 percent of DOD employees would have to use it. They are not using it. DTS costs $40 to $50 million per year in operations and maintenance. Orbitz does not come close to it. The GSA accounting system does not come close to it. None of them come close to it. Yet we are continuing to spend $50 million of the American people's taxpayer dollars before we get the first ticket. So it is a system that does not work. It is broken. The contracting mechanism is broken. Yet we still have people who are going to come to the floor to defend a system that is broken.

Travel executive Robert Langsfeld testified at the hearing that DTS performed less effectively than any--any--civilian e-travel system. We have $500 million in it, and it is unending on what we are going to have, and it still works worse than any private e-travel system. We have spent half a billion dollars.

The Federal Government has also spent this money on a system that is not even reliable. It might work one day and does not work the next. It might get you the best fare, it might not.

Unlike DTS, GSA e-travel contracts do not pay operations and maintenance for the programs. They only pay a per-transaction fee.

So for what was a good idea that turned sour, we continue to pour unspoiled milk on soured milk, and it becomes soured milk. So we continue to spend money on it.

The Government still does not own DTS, as I said. It is an intellectual property--computer software and source codes. Last year, Judge George Miller of the Federal Court of Claims decided he would not even look into allegations of violations of the Competition in Contracting Act because the software and source codes are owned by the contractor. So if the contract were opened for bidding and another bidder was awarded the contract, the Government would have nothing left but a $500 million loss.

But last week, before the hearing, the contractor promised to transfer ownership of this intellectual property to the Defense Department at the end of the contract period, if requested. The reason for this, obviously, is to maintain the fiction that the open bidding on the contract in 2006 is on the level. It is not. There is no open bidding. It violates the very laws that were put on the books to try to maintain competition in contracting. Ownership of DTS bounces around to wherever it is most convenient for avoiding serious scrutiny.

One of the secret changes in the contract that was alleged to have violated the Competition in Contracting Act was the shift from a fee per transaction, as we do with all the civilian e-travel systems, to a cost plus guaranteed profit for the contractor. That has proven they are inept at developing a system. So now we have even changed the contract. Now that we spent $500 million on it, we are now going to change it. We are not going to hold them accountable. We are going to guarantee them a profit for incompetency and inefficiency. It is fair to have Defense contractors reimbursed on the same terms as civilian contractors and agency contractors who are doing the same thing. My amendment will permit that, and only that, a cost per service.

Another secret contract change was an agreement by the Government to pay $43.7 million that had been spent in development costs by the original contractor. We got absolutely nothing for that money. It just covered the losses suffered by the contractor in trying to do something they were not capable of doing, and they are still not capable of doing, rather than to go into the private sector and buy one that was already developed.

This is money the Government was not obliged to pay under the original contract, but we paid it anyway. We paid it anyway--$47 million. We are trying to pay for Katrina now. We are trying to fund the war in Iraq. We have a $500 million boondoggle that does not work, and we will have people defend that on the Senate floor. The fact is, they can't compete. That is what the testimony of the GAO is. That is what the testimony of everybody is. They do not even compete. And now they are only at a 15-percent utilization rate.

Failure carries no negative consequences when we contract this way. When we contract this way, we violate our oaths as the defender of the taxpayers of this country to spend their money wisely. I know I am up against a powerful defense contractor as I attack this process. I want to support our defense contractors. I want to make sure they are there to help us fight and win and defend our freedoms, both here and abroad. But this is the kind of garbage that needs to come out of the contracting system. It is the kind of thing that we need to put on the floor and say: Defend this. Defend it. You cannot defend it. It is indefensible that we would spend a half a billion dollars trying to get an e-travel system, when they are out there working nine times better than anything this program has developed.

I am hopeful the Members of this body, and the American public, more importantly, will call this body, will secure this body's attention on issues just like that. If we are going to not steal from our grandchildren, then we have to be about cleaning up the contracting process in the Pentagon. This is a good first step in doing that.

With that, I yield the floor and suggest the absence of a quorum.

The PRESIDING OFFICER. The absence of a quorum has been suggested. Does the Senator withhold?

Mr. COBURN. I withdraw my request.

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