This is one in our regular More With Less series exploring how federal agencies are finding and implementing innovative ways to drive efficiency and cut costs.
The U.S. government – with a travelling workforce 300 times bigger than the largest American commercial company – has negotiated airline fares so low that it will save the government nearly $6 billion in fiscal 2013.
The negotiating power of the biggest workforce in the world leads to $129 walk-up one-way fares to San Francisco from Washington Dulles, rather than the regular last-minute fare on United Airlines of $720. The GSA has negotiated these fares, leveraging a workforce that takes tens of thousands of trips every year, is always reliable as a customer, and which flies to nearly every city in the U.S. for one reason or another – everything from FEMA officials travelling to the scene of a disaster to the Center for Disease Control medical personnel checking on the latest epidemic.
“GSA’s mission is to help federal agencies save money, and that includes getting the best price for government travelers,” Mary Davie, Acting Commissioner of GSA’s Federal Acquisition Service, said in a statement. “By leveraging the government’s buying power, we are able to maximize cost-savings for federal agencies and save taxpayer dollars.”
The fares are negotiated to be one-way, but with two one-way fares totaling less than the lowest round trip flight, GSA officials said.
Every major airline bids on the government business, because the size and steadiness of the workforce means plenty of business. The flights are negotiated on price, mainly, but other factors, such as directness of the flights and the number of intermediary stops and the number of flights a day, also play a role in which airline gets the GSA’s contracts.
For example, a regular government flying route is Washington, D.C. to Boston. Jet Blue got the contract for the “city pairs” flights, as the GSA’s contracts are known, because it agreed to provide the flights for $49 one way at the cheapest, but in no case higher than $89. Regularly, the lowest fare for that flight is $218. That’s how the government ends up with billions in savings. United provided the Washington-Chicago rate as low as $103, as opposed to the regular $179 fare, officials said.
“We are steady Eddie,” said Tim Burke, director of travel and transportation services and the Federal Acquisition Service of GSA. “That makes us pretty attractive. We blanket the U.S and the globe with the volume and where we travel, and we travel consistently.”
The City Pairs Program allows for last minute bookings, multi-leg trips and round-trip fares at the lowest price possible. In addition, the government retains the right to adjust or cancel flights with no extra charges. Only federal employees on official business are eligible for the rates. The rates become effective on Oct. 1, 2012.