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SGTP eNews 6/26/06

“Pandemics & Other Contingencies for YOU!”

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September 6-8
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1.    Weekly Pandemic Monitor
2.    Fear and Loathing: Avian Flu 2006
3.    Preparing for Avian Flu
4.    Contagion Fever
5.    Feds: “No One is in Charge”
6.    Flu Plan Outlines Federal Roles
7.    Honoring Those Who Went Above and Beyond
8.    IG Follows Katrina Contracts
9.    Homeland Security Turnover Hurts Morale
10.  Is FEMA Ready Now?
11.  Emily Murphy: After the Storm
12.  Don’t Blow It This Hurricane Season
13.  Disaster Planning at Day Care Centers


1. Weekly Pandemic Monitor

iJET’s Weekly Pandemic Monitor provides mission critical health intelligence, including key events, developments worldwide, insight into other organizations’ pandemic preparedness, research, trends and country assessments.

Volume 1, #19—May 10-16:

If you have trouble accessing the report, please contact Support at 866-411-iJET (4538)

Key Developments
Experts concerned about cluster of human cases of avian influenza in Indonesia.
Djibouti is first country in Horn of Africa to confirm H5N1.
Romania reports new outbreaks, after declaring May 3 that outbreaks had been eliminated.

Global Reporting Summary
Situation updates for Burkina Faso, Cambodia, Cameroon, China, Cote d’Ivoire, Czech Republic, Denmark, Djibouti, Georgia, Germany, Indonesia, Iran, Iraq, Israel, Jordan, Kazakhstan, Myanmar, Niger, Nigeria, Poland, Romania, Russia, Sudan, Turkey, United Kingdom, Vietnam and the West Bank/Gaza Strip.

Q&A Forum
How will we know that a pandemic has begun?
What is the significance of the family cluster of avian flu infections in Indonesia reported this week?
What happens if a pandemic cannot be stopped at its source?

Feature Article
Stay Home! Keeping Sick People Out of the Office

Articles of Interest
Who Should Get Influenza Vaccine When Not All Can?
Flu Preparedness Would Make California a Leader

We always appreciate your questions and comments. Please feel free to contact us at . To participate in our Q&A forum, send your question to .

2. Fear and Loathing: Avian Flu 2006

Association Meetings - June, 2006 - By Regina McGee -

“There is a fine line to walk between scaring people and preparing them.”

One of the alarming findings we report on in the article is that meeting planners, on the whole, are unprepared to deal with disasters or emergencies of any sort that might affect their events—let alone something as catastrophic as a flu pandemic. That’s the conclusion of a study conducted by Purdue University for the Professional Convention Management Association.

Probably the lack of adequate contingency planning in our field boils down to a kind of fear and loathing when it comes to thinking about negative, even life-threatening experiences.

Whatever the outcome, get moving on putting together a contingency-planning program for your events. The best antidote for fear is information and preparation.

3. Preparing for Avian Influenza - April/May 2006 - By Jack Devine and Susan Varisco

Companies need a plan in place.

The highly pathogenic H5N1 strain of the avian influenza has infected more than 180 people and killed about half of them, according to the most recent World Health Organization estimate. It is a versatile and hardly virus—infecting more types of animal species, over a wider geographical area, and causing more deaths—than any other avian influenza in history.

According to Dr. Michael T. Osterholm, director of the University of Minnesota Center for Infectious Disease Research and Policy, H5N1 and the 1918 virus are “kissing cousins of the highest order.”

Yet according his center’s poll of corporate planners, only 18 percent have completed a preparedness plan. Should a pandemic emerge, the U.S. government assumes it could sweep the globe. Containment efforts will provide little more than speed bumps. U.S. Health and Human Services estimates that 30 percent of the U.S. population, or 90 million people, could become ill over at least two successive disease waves each lasting six to eight weeks in a given community. Vaccines or anti-viral medications will not make much difference because the vaccine-production process is slow and anti-virals are in short supply.

One of the major differences between a pandemic and other business interruptions is the global, sustained nature of a pandemic. Planners may have to contend with a 30 percent reduction in work force that persists for weeks to months, occurs in multiple locations and repeats over a period of a year. The same logic applies to disruptions in critical inputs and fluctuations in client demand.

A sensible planning process starts with these basics:

  • One of the first steps should be to identify an individual or group to oversee the planning process and organize the company’s response if an outbreak should occur.
  • With a diminished work force, a key issue will be to identify critical functions and individuals, and cross-train personnel to ensure that those functions can be fulfilled.
  • Companies should develop a set of policies that encourage sick personnel to stay home, such as liberal sick leave.
  • They should shore up their IT infrastructure to allow as many personnel as possible to work from home for extended periods.
  • Because the delivery of goods and services is likely to become unreliable, planners must assess critical inputs and vendors, and develop redundancy in critical areas.
  • Finally, to identify unanticipated gaps in the system, emergency plans should be practiced, including role playing.

Whether or not a pandemic materializes, it is a good idea to update emergency plans to account for infectious disease outbreaks

4. Contagion Fever

Mastering T&E Expense Management - April 2006 - By Brendan M. Lynch

“We don’t want to spook anyone, but travel managers need to have a plan in place on how they would remove people from affected areas if that becomes appropriate,” says Mark Williams, chairperson of the Association of Corporate Travel Executives’ Global Airborne Contagion Containment Task Force.

According to the World Health Organization, if a widespread epidemic of H5N1 does occur, “high rates of illness and worker absenteeism are expected, and these will contribute to social and economic disruption,” which could include the impairment of essential services such as power, transportation and communications.

To provide perspective, the WHO uses a phased alert system that assigns the seriousness of the threat a value of one to six, with phase six being a full-blown pandemic. The world is now in phase three, whereby “a new influenza virus subtype is causing disease in humans, but is not yet spreading efficiently and sustainably among humans.”

So far, the CDC notes, transmission has not been known to continue beyond one person.

Communication breakdown
Whether or not a pandemic is brewing, travel executives should be giving their travelers clear, accurate information about any possible medical risks involved in their travel.

“You are responsible for your travelers,” says Moog’s Kathy Hall-Zientek, “and your job is to disseminate up-to-date information to them. If you don’t you’re not doing your job. We are a globalized company with employees all over the world, so I stay very involved and read all the briefings on the avian flu. I think it’s your moral responsibility to stay active, involved and abreast of the latest news and information.”

For More Information…

Centers for Disease Control and Prevention

National Business Group on Health

World Health Organization

U.S. Department of Health and Human Services

5. Pandemic Flu Plan Raises Concern: ‘No one is in charge’

Federal Times - May 15, 2006 - By Mollie Ziegler

The division of labor among agencies that the Bush administration envisions for dealing with pandemic flu ignores lessons learned from the government’s disjointed response to hurricane Katrina, critics say.

Under the White House’s plan, released May 3, the health department is responsible for medical response to an outbreak, including building stockpiles of vaccines and drug treatments, while the Homeland Security Department directs the overall response. Dozens of other agencies would be involved in overseeing other aspects of a response, such as those concerning animals, transportation and the environment.

Making progress toward the goal of pandemic preparedness is admirable, but achieving preparedness is what counts, said Rep. Christopher Shays, R-Conn., who serves on the Government Reform Committee. “A gazelle running from a hungry cougar is taking steps in the right direction,” he said. “But speed is more important than direction.”

Telework the answer

One concern in a pandemic is getting employees at responding agencies and others to work.

Some public health experts say that the effects of a pandemic could come in waves that last for weeks or months and that as many as 40 percent of employees could be absent from work due to illness, caring for family members or fear of infection, Comptroller General David Walker told the committee.

A survey of federal employees released May 11 by the Telework Exchange, a public-private partnership devoted to increasing federal telework opportunities, put the number higher: Seventy-three percent of federal employees said their agencies had provided no guidance on what to do in the case of an outbreak, and 71 percent said their agencies are not prepared to continue operating in the event of a pandemic.

In a survey by the Government Accountability Office, which Walker heads, none of 23 major agencies demonstrated they had the technology to ensure key personnel could work from home. While nine of the 23 reported they planned to have some of their essential employees work from home, only one agency had notified employees that they would be expected to do so.

The OPM would have the guidance done by early August.

6. Flu Plan Outlines Federal Roles

Agencies would need to cooperate

The Game Plan

The White House’s plan to respond to pandemic flu includes more than 300 directives for federal agencies based on the following broad responsibilities:

Homeland Security

  • Coordinate overall response
  • Organize quarantines and travel restrictions
  • Ensure the integrity of the nation’s infrastructure, maintain domestic security
  • Screen for flu at borders

Health and Human Services

  • Coordinate public health and medical emergency response
  • Provide guidance on infection control and treatment to state and local governments
  • Maintain, prioritize and distribute antiviral drugs, vaccines and other supplies
  • Track the virus


  • Assist in maintaining domestic infrastructure and essential government services
  • Maintain civil order


  • Coordinate international response
  • Help limit adverse impacts on trade and commerce
  • Assist other affected countries


  • Help limit the spread of infection, preserve the movement of essential goods


  • Coordinate veterinary response
  • Ensure safety of meat, poultry and egg products


  • Monitor and evaluate economic impact


  • Promote health, safety and welfare of employees
  • Track changes in employment, prices and other economic measures

SOURCE: National Strategy for Pandemic Influenza Implementation Plan

7. Honoring Those Who Went Above and Beyond During Katrina


Overall, there’s worry about morale of the 180,000 employees at the Homeland Security Department.

Homeland Security Secretary Michael Chertoff and Deputy Secretary Michael Jackson put bureaucracy and restructuring to the side and focused on the people of the department, especially the courage, sacrifice and dedication of those who found themselves responding to Katrina, one of the largest natural disasters in the nation’s history.

Chertoff and Jackson honored more than 75 employees and employee teams at the secretary’s second annual awards ceremony, held at Constitution Hall. Many awards ceremonies in Washington are perfunctory events, but not Chertoff’s 2005 awards fete.

8. IG Follows Trail of Hurricane Katrina Recovery Contracts

Federal Times - May 15, 2006 - By Chris Gosier

Spotlight: Richard Skinner, Homeland Security Department

Skinner has one of the biggest jobs ever for an inspector general. The billions of dollars being spent on the immediate response to Katrina dwarf the spending for other disasters that struck during his tenures at Homeland Security and the Federal Emergency Management Agency, now part of DHS.

He chairs a group of inspectors general at DHS and 19 other agencies outside the department that are spending money on the reconstruction, and has had to train their staffs on how to audit disaster spending.

He warns that the real spending hasn’t started yet: The government will award tens of billions of dollars in rebuilding grants through state and local governments to replace equipment and facilities swept away by the hurricane.

The work of an inspector general is especially challenging because of constant demands for information—from Congress, the White House, and the public. But after 38 years as an auditor, it’s still the work he loves. Why so? “The mere fact that you can influence policy,” he says.

His biggest management challenge, Skinner said, is “defining our priorities, because we only have finite resources.”

“The demands to know how our dollars are being spent, trying to balance all that with your limited resources, can be very daunting and challenging,” he said. “My best advice is, you have to have a vision. You have to really define what your primary objectives are, and you have to stay focused on that vision. There can be a lot of distractions along the way, and if you allow those distractions to take you off course, you can be ineffectual.”

9. Homeland Security Turnover Hurts Morale


It’s no secret that morale is a problem at the Homeland Security Department, created three years go in a mega-merger that pulled together 185,000 employees working in more than 220 occupations.

Bush administration officials have tried to play down turf battles and culture clashes as transitional woes that would fade after the rank and file had worked together for five to seven years, but complaints by employees continue and are starting to get to the ears of members of Congress.

Yesterday, two senior department officials acknowledged that turnover in top management jobs there appears to be adversely affecting employee morale.

Answering questions at a House hearing, K. Gregg Prillaman, the department’s chief human capital officer and Dwight M. Williams, the department’s chief security officer, suggested that the turnover rate at the top of the department spills downward into the ranks and influences morale.

Williams said senior leaders—many are political appointees—burn out because of long hours and then leave, creating gaps in the top management team. He said the department is more stable than it was 18 months ago but added, “We are not there yet.”

The creation of the department, to some extent, was a “hostile takeover” and not something employees would have voted for, Prillaman said. Efforts are underway to train line managers how to better deal with employee issues, he said.

10. Is FEMA Ready Now?

The scramble to prepare for new hurricane season

Predictions indicate 2006 likely won’t reach last year’s record of 28 named storms including 15 hurricanes, six of which struck the United States. Still, the National Oceanic and Atmospheric Administration forecasts an above average season of up to 16 named storms and 10 hurricanes, with the possibility of four hurricanes hitting here.

What’s Fixed


  • 770 truckloads of Meals Ready to Eat prepositioned (versus 170 last year)
  • 1,550 truckloads of water prepositioned (versus 600 last year)
  • 2,000 truckloads of ice prepositioned (versus 400 last year)
  • Pre-bid contracts in place for water, ice, debris removal, other suppliers


  • Satellite equipment for back-up communications
  • Improvements in communications between agencies, levels of government


  • On-the-ground teams with live video feeds mobilized to affected areas
  • Global Positioning System tracking of supplies trucks


  • Five new mobile units to register storm victims


  • Acting director has emergency management experience

What’s Not


  • Interoperability problems remain


  • No direct line between Federal Emergency Management Agency director and president
  • Coordination problems remain among feds and levels of government
  • Confusion over National Response Plan remains


  • Some shelters are in hurricane-prone regions
  • 2005 hurricane evacuees housed in trailers remain vulnerable in hurricane zones


  • FEMA is still 15 percent understaffed

SOURCE: Federal Times research

11. Emily Murphy: After the Storm

Government Computer News - May 1, 2006 - By Rob Thormeyer - Emily Murphy, GSA - Interview

To say these are trying times at the General Services Administration would be an understatement. With a new administrator named just last month, Congress finally signing off on the reorganization plan and an expected round of layoffs pending, the agency has its share of tribulations. But for chief acquisition officer Emily Murphy, it is business as usual as she implements an ambitious program to better train and educate GSA’s acquisition workforce—the lifeblood of the organization.

Drawing from her experiences at the Small Business Administration and on Capitol Hill, Murphy routinely works 12-hour days to fulfill her mission.

GCN: What are your priorities?

Murphy: It’s sort of a follow-on to what I worked on last year: the three C’s—capacity, compliance and competition. From a capacity role, last year we worked a lot on how are we going to organize, how are we going to make sure we’ve got the people in place we need to get their work done. We put in place the Defense Acquisition University-Federal Acquisition Institute partnership. This year we’re really taking it to the next level. We’ve started studying our internal program to see how we can improve that.

GCN: How will the partnership work?

Murphy: We entered into a partnership agreement with them, and we’ve aligned our training so that we can allow economies of scale and also a lot more opportunities for training to be available to our workforce—not just GSA’s workforce, but the civilian workforce.

GCN: What about the Competition ‘C’?

Murphy: Looking at the involvement of small businesses in government contracting has always been something I’m very passionate about. Currently, about 80 percent of our schedule holders are small businesses, and they get about a third of the dollars off schedules each year. It’s something GSA has been very committed to.

Additionally, we’ve been very committed to making sure there’s additional transparency in acquisition, with our E-Buy tool, which has helped us comply with [Section 803 of the Defense Authorization Act], which is DOD’s regulation on how you make awards on multiple-award schedules.

GCN: Is the pending reorganization having an impact on your shop?

Murphy: It is.

It’s really been about leveraging the tools that are currently within FSS and FTS, such as the Center for Acquisition Excellence, with the acquisition workforce tools that we had already in the CAO’s office. I think it’s going to be a very positive turn of events for not just our workforce but also for the acquisition workforce of our customer agencies that are dealing with us.

12. Don’t Blow It This Hurricane Season

Incentive - June 2006 - By Leo Jakobson

New Options abound for disaster preparedness and travel insurance.

Weather researchers predict another tough Hurricane season, which kicks off this month.

In response to these concerns, a slew of new contingency products are on offer.

From August through October, Visit Florida, the state’s tourism authority, will provide meeting planners with free Cover Your Event Insurance.

13. Disaster Planning at Day Care: Centers To Get New Guidelines for Emergencies

Wall Street Journal - June 15, 2006 - By Sue Shellenbarger

Be Prepared

Elements of a child-care emergency plan

  • Emergency and parent contact information
  • Evacuation kit with medical supplies, information
  • An emergency cell phone and source of cash
  • Back-up contact plans for phone outages
  • Plans for evacuation destinations

Back-up plan for teachers’ or nannies’ own families

SGTP eNews 6/20/06

“ E-Gov, Risk Management & Good News!”

SGTP’s EdCon’06
September 6-8
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Download SGTP eNews 6/20/06 [doc]

1.    Big Improvements Promised at GSA
2.    Hundreds of Program Managers Brace for OMB Reviews
3.    GSA Employees Offered Buyouts
4.    e-Travel: Expect Delays
5.    Nine Agencies Drop in e-Gov Ratings
6.    Agencies Enlisted to Help Lobby Congress
7.    GAO’s Tips for Better Business Systems Modernization (BSM)
8.    Editorial: Enough Excuses
9.    DoD Retracts Travel Services Solicitations
10.  DTS Delayed for Landing
11.  Navy May Join Lodging Success
12.  Have Danger, Will Advise
13.  Security Watch: Booking a Room
14.  Gloria Bohan Featured in New Book
15.  Travel Industry Indicators


1. Big Improvements Promised at GSA

Federal Times - June 12, 2006 - By Chris Gosier

The new administrator of the general Services Administration, Lurita Doan, marked her fourth day on the job by promising big improvements in the way GSA works.

Very soon, she’ll announce changes in the way GSA’s supply schedule contracts are used by federal agencies in response to disasters like Hurricane Katrina, Doan said June 2 at a conference held by the Coalition for Government Procurement, an association that represents GSA vendors.

She pledged to cut the red tape for companies trying to land schedule contracts. “I will not rest until it is possible for a business to get a basic GSA schedule within 30 days,” she said.

On June 5, Doan announced a new chief for the Federal Acquisition /Service, a centralized procurement agency that GSA is setting up to streamline its operations. GSA aims to officially stand up the agency by July 4. Jim Williams will replace acting FAS commissioner Martin Wagner, who will return to GSA’s Office of Governmentwide Policy.

Williams comes from the Homeland Security Department, where he is director of the U.S. Visitor and Immigration Status Indicator Technology program. That program, US-VISIT, coordinates with agencies outside DHS, as well as other countries, to control immigration at U.S. seaports, airports and land crossings.

“Jim has a successful track record of planning and executing successful reorganization strategies, and brings superior homeland security skills to the position.” Doan said.

GSA is taking other steps to win back business. For instance, it is working on meeting customers’ demand for more data on what they’re buying through GSA, said Jeff Koses, acting assistant commissioner for acquisition management at GSA.

2. Hundreds of Program Managers Brace for OMB Reviews

Federal Times - May 15, 2006 - By Aimee Curl

Sharpen those pencils, federal managers, and ready those reports: A new season of the Program Assessment Rating Tool has begun.

3. GSA Employees Offered Buyouts

Federal Times - May 15, 2006 - By Chris Gosier

The General Services Administration has received the administration’s approval to offer buyouts to 400 employees.

The agency, which is going through a business slump and a tumultuous reorganization, sent letters on May 5 to about 700 employees, most of them in the Federal Technology Service, who would be eligible for the buyout offers, Martin Wagner, acting commissioner of GSA’s Federal Acquisition Service, said on May 10.

In related news, GSA announced May 9 that it has filled a top post. John Johnson, assistant commissioner for service development and delivery at FTS, will be acting commissioner of Integrated Technology Services.

That post was vacated last month by Deidre Lee, who left to join the Federal Emergency Management Agency.

4. E-Travel: Expect Delays

Federal Times - May 22, 2006 - By Stephen Losey

Online Booking’s Slow Start Costs Agencies Millions

Travelers at several agencies last spring found the E-Gov Travel Service, which was meant to make the travel process easier, was instead losing the second half of their round-trip flights, according to a new report from the General Services Administration’s inspector general’s office.

That meant travel managers had to get on the phone to straighten things out with travel agents, and as soon as the agent had to personally change the travel schedule, the cheaper service fee – which online travel booking was meant to yield – vanished.

Some travelers find the system hard to use and help from vendors scant, so the new system sits largely unused and agencies maintain old systems they’re ready to dispose of. All the delays and duplication drive up costs for agencies and hurt the program’s ability to pay for itself.

GSA’s estimates are becoming more pessimistic. In a May 18 response to questions, GSA said 16 agencies will miss the deadline, and some may still be deploying their e-travel systems as late as fiscal 2008.

“Our review disclosed that cost, schedule and performance risks exist,” said the report, written by Carolyn Presley-Doss, audit manager for GSA’s acquisition programs audit office, which is part of the inspector general’s office.

International Trade Commission travel manager Queen Cox said GSA has responded well to the problems that arose during E-Gov Travel’s development.

“They were aware of their own problems,” Cox said. “We’ve got to give them the opportunity to respond to the issues” highlighted in the IG report.

But David Williams, vice president of policy at Citizens Against Government Waste, is not optimistic that E-Gov Travel will actually reap the promised benefits.

“We’re all for spending money if it will save in the long run,” Williams said. “But who knows when this will be self-sustaining? There doesn’t seem much hope.”

GSA must take a serious look at E-Gov Travel in light of the IG’s report and decide if it is worth continuing, he said.

The report shows E-Gov Travel could face problems similar to those that plague the Defense Travel System, Williams said. The Pentagon’s online travel booking and reimbursement system, also developed by Northrop Grumman Mission Systems, has been under development since 1998. Its deployment is now four years overdue and will stretch into fiscal 2007. Critics also say DTS is underused and doesn’t always capture the lowest possible air fair.

To keep that from happening GSA must get tough with vendors, Williams said. The government must hold contractors to deadlines and penalize those who don’t perform.

Agencies share in the blame for delays, the IG said. Some, such as OPM and the Interior Department, want to finish updating their financial management systems before they start using E-Gov Travel.

In a written response to the IG’s report, GSA agreed with the recommendations to develop realistic revenue estimates, form a contingency plan in case revenue falls short, increase its program management office’s involvement in agency deployment, and set up a formal customer feedback system.

5. Nine Agencies Drop in E-Gov Ratings

Many agencies’ government scores fell in the March 31 scorecard:

Serious Flaws Scored worse, from yellow to red:

  • For electronic government , Commerce, Defense, Justice Transportation and Office of Personnel Management

Mixed Results Scored Worse, from green to yellow:

  • For electronic government , Environmental Protection Agency, Housing and Urban Development, NASA and Small Business Administration

Scored better, from red to yellow:

  • For financial performance , Agency for International Development

Success Scored better, from yellow to green:

  • For electronic government, Social Security Administration
  • For budget/performance integration, Justice

SOURCE : Office of Management and Budget

6. Agencies are enlisted to help lobby Congress for more support of e-gov

Government Computer News - May 15, 2006 - By Rob Thormeyer - GCN Staff

In the latest President’s Management Agenda scorecard, nine agencies slipped in the E-government portion, and OMB officials are putting agencies on notice that they must do a better job of promoting their case on Capital Hill.

But Congress, while acknowledging OMB’s heightened presence on the Hill, doesn’t appear willing at this point to change its skeptical view of the initiative.

“Funds are tight up here, and there isn’t a lot of support here in Congress” for e-government projects, said John Scofield, spokesman for the House Appropriations Committee.

Agencies are slated to swap more than $192.9 million among themselves to keep 19 e-government and five Lines of Business initiatives up and running this year.

There is also the issue of e-government fatigue, said Dennis Heretick, chief information security officer at the Justice Department.

Justice was one of the several agencies to slip into the dreaded “red” zone in the latest round of PMA scores, meaning there are serious problems.

7. GAO’s Tips For Better BSM

Government Computer News - May 15, 2006

Business systems modernization projects must:

  • Have a clear, documented and consistent method of eliciting requirements that takes into account the needs of the specific system and all relevant users and stakeholders
  • Adequately document all requirements
  • Demonstrate adequate management of requirements including policies and procedures that fully describe a minimum set of activities required for each project and provide detailed procedures for each of the key areas of requirements elicitation, documentation, verification, and validation and management
  • Have a standardized process for the documentation of requirements that ensures full documentation of the baseline requirements
  • Have a process for ensuring that formal peer reviews are planned and completed for key products
  • Develop guidance on tracking cost and schedule impact of changes to requirements for all projects
  • Develop guidance on establishing and maintaining full bidirectional requirements traceability.

SOURCE : GAO report on Business Systems Modernization: IRS Needs to Complete Recent Efforts to Develop Policies and Procedures to Guide Requirements Development and Management

8. Enough Excuses: Make Travel System Work

Federal Times - May 22, 2006



E-Travel: Expect Delays

Add the new online travel booking system to the sorry list of delayed federal technology projects.

E-Gov Travel was launched 2 1/2 years ago by the General Services Administration with promises that any federal employee would be able to easily book a trip online by fiscal 2007 and the government would cut its costs by millions. Instead, according to GSA’s latest estimates, 16 of 24 agencies will not be using the system fully by the September deadline, and some may still be gearing up in fiscal 2008.

Many of the same problems that plagued the Pentagon’s Defense Travel System now plague the civilian agencies. Under development since 1998, DTS deployment is now four years overdue and will stretch into fiscal 2007.

A host of well-sounding reasons are offered for the delays: systems integration problems and a culture of reluctant users, for example.

Other reasons are less forgivable: a program management office that fails to lead, vendor help desks that fail to help, and computer functions that just don’t work.

Ultimately, government travelers are left with a system they cannot trust. And why should they trust a system that has been known to drop their return trips, charge incorrectly for tickets and not offer the best fares?

GSA’s program management office must step up to its job and lead. It left unresolved for at least five months a complaint that the system of one of the three vendors did not offer travelers government discounts on fares, according to a GSA inspector general report. The program office should make its mission to get to the bottom of such reported problems immediately.

9. DoD Retracts Travel Services Solicitation

Federal Times - May 15, 2006

The Pentagon canceled a solicitation May 8 to hire travel agents that would book flights and provide other travel services to department employees as part of the Defense Travel System.

The Defense Department decided it needed to rewrite the Solicitation based on feedback from industry representatives at a March 28 conference and a study conducted by the Defense Travel Management Office. A May 10 statement from the Pentagon said the DTS office realized its solicitation didn’t reflect the travel agency services it actually needed.

10. Defense Travel System Delayed for Landing

Federal Times - May 8, 2006 - By Stephen Losey

Budget cuts will stretch the deployment of the Defense Travel System into fiscal 2007 and indefinitely delay the rollout of one of its new features, the travel system’s program director said May 3.

DTS, the Pentagon’s end-to-end travel and financial management system, has had nearly $10 million cut from its budget since fiscal 2003, said Air Force Col. Brandy Johnson. Last year, Johnson said DTS would be available at 11,000 Defense Department sites by the end of fiscal 2006.

DTS was originally supposed to be completed in 2002. Darby Smith, GAO’s assistant director for financial management and assurance, said that DTS’s problems largely stem from a lack of well-defined requirements and oversight. Those shortcomings date from the project’s start 10 years ago and are fairly common among government acquisitions, Smith said.

But the setbacks are minor, Johnson said, and said DTS has “turned a corner” in getting users. In October, DTS had processed more than 1 million travel orders and 872,000 voucher claims, said Zack Gaddy, the director of the Defense Finance and Accounting Service, which oversaw DTS until it was moved to the Business Transformation Agency in February. Since then, the number of voucher claims has nearly doubled to 1.6 million and travel orders have hit 1.9 million, Johnson said.

“We’ll continue to evolve,” Johnson said. And during the next two years, DTS will aim to bypass travel agents more often and book flights and rooms directly with airlines and hotels. By “cutting out the middle man,” Johnson expects the pentagon will save even more money, though she’s not sure how much.

Travel agents would still be used to book complicated international flights, she said.

“Over the next two years, there will be gnashing of teeth, and there will be winners and losers,” Johnson said.

11. Navy May Join Lodging Success Hotel Reservations Program

Federal Times - May 8, 2006 - By Stephen Losey

The last holdout to creating a hotel booking program for all Defense Department travelers may soon yield.

The Navy’s top travel manager said May 1 that he is considering folding the Navy Elite program into Lodging Success, which in 2004 expanded from an Army-centered program to encompass cities where Air Force and Marine Corps employees travel.

Larry Barrs said he is discussing the pros and cons of a merger with the Lodging Success program. Barrs expects to have a decision by the end of July.

“We’ve got to decide if it will be reliable for us and provide the same quality of service,” Barrs said.

Barrs is studying whether the 67 hotels Lodging Success now has contracts with are near places where sailors and Navy civilians frequently travel. Lodging Success officials could decide to expand to better serve Navy customers, he said.

Lodging Success does not yet have figures on how often Marine Corps and Air Force members use the programs, since they are still newcomers.

Travelers booked more than 248,000 room nights at Lodging Success hotels in fiscal 2005.

12. Have Danger, Will Advise

The security services industry has been growing by about 10 to 12 percent annually since 9/11, said Joseph Ricci, executive director of the National Association of Security Companies.

For example, iJET Intelligent Risk Systems sends out daily “intelligence briefings’ on global hot spots for more than 400 clients, including the World Bank, Archer Daniels Midland, the multinational agricultural company, and Booz Allen Hamilton, the management consulting firm.

From iJET’s operations center in Annapolis, Md., which has been open around the clock since it began in April 2001, the company’s 30 analysts – many of whom are former military intelligence officers – continuously monitor developments in 183 countries from experts and other sources. iJet said it had more than 350 corporate clients today.

For executives who want more hands-on training, Kroll – a subsidiary of Marsh, the risk management firm based in New York City – runs programs in travel safety and security. Those range from a four-hour seminar on avoiding risk in foreign cities, to weapons instruction.

Some Web sites are helpful, said Michael McCann, former head of security for the United Nations and now chief executive officer of McCann Protective Services in New York City. He recommends the CIA’s World Factbook ( and the Web site of the Overseas Security Advisory Council (, a public-private partnership maintained by the Bureau of Diplomatic Security and the Department of State. The State Department’s Web site at offers general information, including current travel warnings, and the department encourages Americans traveling abroad to register with the local U.S. consulate or embassy, either in person or online at .

13. Have Danger, Will Advise

The Washington Post - May 11, 2006

Identity Watch

More than 240,000 travelers who booked on could find themselves victims of identity theft. In yet another company laptop disappearance, the names, addresses and credit card information of customers who booked between 2002 and 2004 were on a laptop stolen from the trunk of an employee of Ernst and Young, the outside auditor for the hotel booking site.

The files were password-protected. The information, if accessed, could be used to charge items or open new credit card accounts, security experts say. According to the nonprofit Privacy Rights Clearinghouse, an estimated 15 million people will have their identity compromised this year.

Those concerned that their personal information has been compromised should make sure credit reporting companies put a “fraud alert” on their files so that no new credit card can be opened in their names until they are contacted by phone. Compromised data is sometimes used for years, and fraud alerts must be renewed every 90 days.

To post a fraud alert, call one of the three major credit reporting bureaus: Experian (888-397-3742), Equifax (800-525-6285) or TransUnion (800-680-7289). For tips on preventing identity fraud, check the U.S. Federal Trade Commission web Site,

14. Gloria Bohan Featured in New Book

Gloria Bohan, Founder and President of Omega World Travel, is profiled in a new book: “The Woman’s Advantage: 20 Women Entrepreneurs Show You What it Takes to Grow Your Business.” The publication offers a candid look into how 20 women from around the world built successful companies. Distributed by Kaplan Publishing of Chicago, the book is available at retail and online bookstores.

Author Mary Cantando—a nationally-recognized expert on the subject of women-owned businesses—scoured the world to uncover remarkable women entrepreneurs.

“As a start-up business, Gloria knew that she had to seek out underserved markets. Wherever a customer expressed a need, she was ready to fill it. When clients asked her to provide service to new locations, she did. Within ten years, Gloria owned 15 travel offices. As she expanded beyond her initial small-town location, Gloria realized that the travel business was different from town to town and that no two customers were the same. She and her staff became aware of regional nuances and customized Omega Travel’s solutions to meet local business needs.”

15. Travel Industry Indicators

May 30,s 2006 - By: James V. Cammisa, Jr. - Travel Industry Analyst - Tel: (305) 868-3818 - E-mail:

Summer vacation travel now begins, with expectations for modest trip volume gains but more sizable increases in revenues, driven by higher travel prices.

Seasonal projections were presented in our April newsletter. They call for a 2.5 percent increase in June/July/August domestic trip volume over year ago. With travel prices estimated to be up as much as 8.5 percent, revenues could grow by 11 percent.

Government studies show gasoline outlays represent only 4.5 percent of household expenditures, and at this level are not significant enough to squeeze average household budgets.

Airline fare increases appear to be holding. January-April average domestic fares are up 10.9 percent versus year ago, based on data from the Air Transport Association (ATA). While airlines are full, the actual growth in passenger enplanements continues to be somewhat disappointing. March/April, which are the traditional Spring Break months and a good proxy for what summer air travel will look like, showed domestic passenger enplanements actually down 1.5 percent versus the year-ago period. Because of the importance of air traffic to most every sector of our industry, a closer examination of this stagnated growth warrants attention. Are higher airfares the reason? Are other factors at work?

Domestic airline capacity reductions are probably the major reason for the traffic slowdown. The ATA reports that, since 2001, the six largest airlines have withdrawn 700 aircraft from scheduled service. American, whose fleet peaked at 880 aircraft, now has 200 fewer lanes in service. With the cutbacks in fleet size, schedules have been reduced in many markets, major hubs shrunk in size, and smaller regional jets used in low volume markets. Larger, wide-bodied aircraft have been shifted to international routes.

Domestic hotel prospects for the summer remain positive, with the momentum of the early months of this year carrying through to the summer. Average room rates are expected to rise 5.3 percent; RevPAR, a strong 7.2 percent.

Business Travel , both domestic and international, receives less attention now as we enter the slower summer season. With very crowded planes and airports, we’re likely to see many business travelers postponing trips. The seasonal fall-off could therefore be sharper than usual.

Business travel rate negotiations will begin in the fall, but supplier preparation should start earlier. In this preparation, a starting assumption is that companies are doing quite well and can afford to pay more next year for their travel services. Corporate profit increases in the first half of the year will again be at double-digit rates. Companies are spending on growth and expansion, with new investment in plant and equipment. Most every indicator of business confidence is positive. And, finally, Corporate America has recovered a good deal of its own pricing power, charging more for their products and services in a period of high demand. Travel providers are certainly entitled to do the same.

SGTP eNews 5/10/06

“Federal Changes And Travel Trends”

SGTP’s EdCon’06, September 6-8
Hilton Alexandria Mark Center
Conference At A Glance & Registration

Download SGTP eNews 5/10/06 [doc]

1. – Donnie’s Web (Thanks To Gloria and Dan Bohan)
2.    Travel Industry Indicators – April 28, 2006
3.    Federal Employees Can Prepay Their Conference Registrations
4.    Web Site For Government Jobs
5.    Internet Booking Study From TIA
6.    Hotel Brands Lag On Overall Web Hits
7.    E-Mail Back In The Media Mix
8.    e Government Innovations: “Ask Louise!”
9.    Use Data You Have To Improve Data You Get
10.  Heads In The Sand: Ignoring E-Commerce
11.  Union Official Strikes At Hoteliers
12.  How To Build A Media Mix Model


1. – Donnie’s Web

Welcome to our newly expanded and updated web site. We’re very grateful to SGTP founders Dan and Gloria Bohan who, when we went through the 2000 name change, immediately protected for our use: it now fully accesses all our web site information – public, and members only. Enjoy the experience. Thanks, Gloria and Dan.

Our next newsletter will detail all the updates and adds to SGTP’s web site. Enjoy the gusto of $28 billion in government travel.

2. Travel Industry Indicators

April 28, 2006
James V. Cammisa, Jr.
Travel Industry Analyst
Tel: (305) 868-3818

Summer travel opportunities are now the focus of our industry. Prospects appear good, but there are some uncertainties that could make it a somewhat different summer than last year.

Domestic trip volume for June/July/August should show an estimated increase of 2.5 percent. We project that the auto vacation gain (+2.8%) will outpace the smaller gain expected in air travel (+1.2%).

Slower volume growth , that we anticipate, are tied to two uncertainties that are now present. For the drive vacation market, it’s not really high gasoline prices but, more importantly, the possibility of spot shortages of gasoline. Our second concern is that higher summer airfares may impact the most price-sensitive sectors of the travel market.

Spot fuel shortages this summer could occur as a result of federally mandated requirements calling for ethanol to replace MTBE as a clean air additive to gasoline. While most all of the change-over will be completed in May, there will still be limited supplies of ethanol that have to be moved by rail or tanker truck to distribution terminals, where it is blended with gasoline before being shipped to retail gas stations. Since the source of most ethanol is in the Midwest, it is shipments to the East, West and to the Southwest that could be affected by logistical problems. As of this writing, it is not clear whether the government will grant regulatory waivers to ease the MTBE to ethanol transition.

Pricing replaces volume as the central theme for Summer 2006. As noted earlier, we anticipate travel price increases (+8.5%) that will be 21/2 times the national inflation rate of 3.4 percent. Domestic resort area hotel room rates in the first quarter were 7.0 percent above year ago, based on data from Smith Travel Research (STR). In Florida, California and Arizona, the increases all were 8.5 percent or above. Car rental operators will certainly look to pricing increases to make up for the loss of transaction increases.

Consumer spending is holding up well, in spite of worries that a retrenchment would occur as consumers bring spending more in line with their incomes.

Business travel will take a seasonal holiday, but its strength will again exhibit itself in the fall. Corporate earnings for the first quarter, now being reported, will show a 15 th consecutive quarter of double-digit percentage growth rates. Consensus estimates are for S&P 500 earnings to be 11.2 percent above year ago. Transient business travel, group and meeting/convention businesses, are all showing solid volume increases, but more impressive spending increases.

Continued problems for the airlines would not be good news for those in our industry who are dependent on growth of the air travel market. During the 1995-2000 period, there was a 1.0 to 1.0 relationship between U.S. GDP growth and U.S. airline system passenger enplanements. Eliminating the 2001-03 lows for the airlines, and looking just at 2004-06, the economy now is growing three times faster than airline passenger growth.


Employee Productivity Lessons From The Airlines

While financial problems for the nation’s airlines still continue, significant progress has been made by the carriers in reducing their operating coasts. Major gains in worker profitability are contributing to this. The airlines are now operating with 20 percent fewer employees than they did in the year 2000. In 2000, labor cost represented 35 percent of total airline operating costs.

Productivity improvement clearly should be given high priority. As part of its business plan, every organization should have a comprehensive set of departmental productivity goals. The targets should be expressed statistically on a per unit cost or revenue basis, i.e., revenue per inquiry, per booking, per passenger, etc. If these targets are met, so will be bottom-line profit goals of the organization. One of the keys to generating increases in productivity is to raise targets every year for every department in the organization. Unfortunately, many only use productivity measures as static performance norms, and do not challenge their organizations by increasing the targets to higher and higher levels.

As a service industry, travel is an industry that’s labor intensive. As the airlines are finding out, their key to success in the future is dependent on their ability to carefully manage employee costs with a highly productive workforce. There are lessons here for everyone.

3. Federal Travel Regulation; Conference Planning—Prepayment Of Registration Fee

Federal Register
April 26, 2006
(Vol. 71, Number 80)

SUMMARY: This final rule amends the Federal Travel Regulation (FTR) by clarifying that advance payment of discounted conference fees may be treated as an allowable travel advance, and by adding a new section to allow for the reimbursement of the prepayment of “early bird” discounted registration fees to attend a conference or training seminar. This clarification is added to allow agencies to take advantage of discounted “early bird” registration discounts, thereby saving Government funds. The FTR and any corresponding documents may be accessed at GSA’s website at

Effective Date : This final rule is effective April 26, 2006.

For clarification of content, contact Umeki Thorne, Office of Governmentwide Policy, email or by telephone at (202) 208-7636. Please cite FTR Amendment 2006-02; FTR case 2006-302.

4. Web Site For Government Careers

The Washington Post
Tuesday, April 25, 2006
By Stephen Barr

Most of the “ask not” generation has quietly left federal service, and a mainstay of the federal government – the baby boom generation – will be retiring in the next few years. The transition to the next generation may be one of the most important facing the government because polls show that many young people see little appeal in government service.

In a bid to renew interest in public service, the nonprofit Council for Excellence in Government plans to launch an Internet-based project to provide research data and ideas that commencement speakers at middle schools, high schools and colleges can use to talk about the importance of working in government.

The Web site will provide a sampling of speeches by presidents and famous people on the importance of public service, including a selection of inspirational quotations, and some polling data on attitudes toward public service.

The council, which has about 700 former government executives as members, sponsors fellowships and other programs aimed at enhancing interest and understanding of the government. A 2004 survey conducted for the council found that only 27 percent of young people said they had been asked by their parents, teachers or others to consider government as a job option, down by 11 percentage points from two years earlier.

Federal agencies, however, will soon need an influx of new hires. Personnel officials predict that substantial numbers of federal employees – about 60,000 annually in the 2008-2010 period – will retire. In recent months, agencies have been at work on plans to step up recruitment and reduce the time it takes to hire job applicants with foreign language, technology or other critical skills.

5. TIA, Forrester Release Internet-booking Study
April 24, 2006
By Michael Milligan

Consumers like the Internet because they feel it gives them more control over their travel purchases, but many go back to the phone when booking complicated trips, according to a new study.

The study, titled “It Doesn’t Have To Suck: Making Web Travel Planning Better,” was prepared by the Travel Industry Association in cooperation with Forrester Research and released at the TIA’s TravelCom 2006 conference in New York. It reflects responses from 2,468 leisure travelers.

To access the full report, go to:

Seventy-two percent of leisure travelers are plugged into the web, and the study says that they are increasingly using it to research and book travel. About 35.2 million households are expected to buy travel online. Another 20.3 million are expected to research online but buy offline.

The research shows that as trips become more involved, travelers become increasingly reluctant to book online.

And 63% said they used Web sites’ “help” pages.

Forrester recommended that web sites take the following steps to improve the online buying experience for consumers:

  • Audit to find out what’s not selling and what product information is not available online.
  • Rethink the way they present search results, including clearly presenting product details, destination attributes and rate restrictions.
  • Offer an internal keyword-based search engine to help travelers search for information online.
  • Let consumers store and retrieve information so that they can build on it.

Use third party content to fill in certain information gaps.

6. Brands Lag On Overall Web Hits

May 1, 2006
By Christine Blank
Contributing Editor

The hotel and motel industry has come a long way since Expedia, Travelocity and other travel Web sites got into the business of selling rooms just a few short years ago. In those travel sites’ first years in business, consumers were finding hotel rooms on those sites rather than on the hotels’ own Web sites. Now, when they research for hotel rooms online, they are referred to the hotels’ Web site much more often.

Still, hotel companies need to work harder to make guests aware of their sites. A recent study shows Orbitz, Expedia and other travel Web sites still hold the top rankings in search engines when consumers search for hotel rooms.

None of the major hotel chains, such as Marriott and Radisson, is listed in SEMphonic’s overall ratings analyzing paid and organic results. Only Choice Hotels International, which includes Comfort Inn, Clarion and Sleep Inn, ranks in the Top 10 paid listings.

“We were pretty surprised to see that the larger travel aggregators were really pushing the paid market and squeezing the actual hotel companies out,” said Paul Legutko, an analyst and consultant with SEMphonic.

Hotels fare much better in organic listings, where they comprise 48 percent of the top 50 sites. Travel aggregators make up only 6 percent of the top 50 sites. But only,, and ranked in the top 10 organic listings.

In searches for “cheap” or “discount” properties, lodging aggregators such as make up 62 percent of the organic listings; travel aggregators make up 24 percent; and hotel companies make up only 6 percent, SEMphonic found.

In that case, hotels may not be willing to buy keywords such as “cheap” because they don’t want to associate their properties with those words, but those are the terms consumers use.

“As zealous as people should be about protecting their brand, it is critically important to respond to what the person is thinking when they put the word in,” said Gary Angel, c.e.o. of SEMphonic.

To improve search rankings, Angle suggests hotels implement a balanced mix of organic and paid search marketing. They need to optimize their Web sites to improve organic search results, as well as buy the right keywords on the paid search side.

To ensure a successful overall search-marketing program, it should be constantly guided by one executive within the company and be a constant effort by all staff involved in search marketing.

7. E-Mail Back In The Media Mix

BtoB’s Interactive Marketing Guide
By Carol Krol

Deliverability still a concern, but marketers forge ahead, focus on integrated message.

Need to Know

5 ways to ‘pilot’ perfect landing pages for e-mail

  1. Make one person responsible for the entire campaign. Just because e-mail messages and Web landing pages exist in different media doesn’t mean they are separate. When an e-mail recipient clicks on a link, they expect continuity. Most don’t even realize that they just migrated from their e-mail client to their Web browser.
  2. Avoid using home pages or multipurpose landing pages. The more dedicated the landing page, the more effective the results.
  3. Stay focused on the call to action. Don’t forget why you brought this person to your page. You warmed them up in the e-mail message and now you want them to complete the transaction. Keep the prospect focused on the desired action and don’t distract them with random opportunities or irrelevant information.
  4. Don’t intimidate. Limit the number of fields your prospect must complete as much as possible without compromising lead quality. You can always ask for more information later.
  5. Test. You should test landing pages with the same discipline you do e-mail messages – one element at a time. For example: Send coupons, p.s. messages, opening sentences and calls to action separately.

Source: Randall Litchfield, Inbox Marketer News, “Perfect Landings,” March 2006


  • Contrary to popular wisdom, Friday may be the best day to send e-mail. In Q4, 21% of e-mails sent on Friday were opened, followed by 20.8% of e-mails sent on Tuesday.

Source : eROI, “Q4 2005 E-mail Statistics” report

E-mail best practices

  • 52% of b-to-b newsletter subscribers use their preview pane to view e-mails, making it important for marketers to deliver their messages in this smaller window space.

Source : EmailLabs, November 2005

  • 39% of b-to-b marketers have no formal permission (opt-in) practices in place for collecting e-mail addresses. Only 7% of b-to-c marketers have no formal practice in place.

Source : Direct and Multichannel Merchant magazines

The spam problem

  • In 2005, the percent of users that “are less trusting of e-mail because of spam” decreased to 52% from 62% in 2004.

Source : Pew Internet and American Life Project 2005

  • To help manage spam, many users route opt-in e-mail to Webmail addresses. 26% of American Internet users route opt-in e-mail to Yahoo!, 21% read marketing communications through Hotmail and 13% use AOL.

Source : Lyris Technologies, March 2006

There is a lot of talk about ‘e-mail reputation.’ What does that mean, and do I need care?

Answer: It seems that every time you turn around these days people are talking about e-mail reputation, and every company in the e-mail space seems to offer a solution for it. Here’s what you really need to know:

  • Your e-mail reputation is how e-mail recipients view your e-mail program.
  • You most certainly need to care about it; reputation dictates if your messages reach the in-box, get junked or go missing.
  • You can easily control your reputation, increasing your program response as it improves.

Think of your e-mail reputation as your credit score for e-mail. Your past and present behaviors factor into your credit rating, and your future behaviors can make it better or worse. The same is true with e-mail.

While there are thousands of data points factoring into reputation, we see that there are three primary levers that most influence reputation and subsequent delivery:

Bounces: Too many bounces spell disaster in the eyes of ISPs. Removing bounces might be a hassle, but doing it regularly will have a dramatic effect on your e-mail delivery. ISPs use your unknown user rates and other bounce metrics when deciding whether to let your e-mail through.

Blacklists: Sure, you’ve heard about them but does anyone really care about blacklists? The answer is yes. Most e-mail receivers reference blacklists in order to filter unwanted e-mail. By finding out what blacklists you are on and doing everything possible to get removed, you will dramatically improve your e-mail deliverability.

Backlash: If you think that your customers’ clicking on the “This is spam” button won’t affect your e-mail reputation, you are mistaken. Complaints drive 70% of e-mail deliverability issues. By determining your complaint rates and sources, you can begin minimizing your complaint rates at ISPs and increasing your delivery rates.

8. Innovations in E-Government: The Thoughts of Governors and Mayors

Reviewed by Alison Lake
Edited by Erwin A. Blackstone, Michael L. Bognanno
And Simon Hakim,
Rowman & Littlefield Publishers Inc.
$29.95 paperback

Examples of how today’s elected officials are interacting with digital government appear in Innovations in E-Government. Innovations most effectively communicates that e-government can structurally improve public-sector operations and services using anecdotal experiences from governors and mayors around the country who describe their own experiences with making government more e-friendly.

High-profile essays from the likes of Jeb Bush, Mark Warner, Rudy Giuliani, Willie Brown and Mark Forman share space with equally interesting and/or applicable overviews from lesser-known officials. Authors were chosen for their commitment to e-government implementation and relative success in doing so. Most are forthcoming with their management and information-gathering strategies at each stage of execution.

How specifically do some localities provide around-the-clock digital government to their residents? You’ll find out the kind of data server used by the Louisiana Services Directory, and specific software programs for instituting and managing data to provide state services information. You’ll also learn about Ask Louise, an online friend to Louisiana citizens, answering questions with speed and accuracy, and giving people more access to their local government.

9. Using Data We Have To Improve Data We Get

April 3, 2006
By Mathias Thurman

Our manager plans to justify his long budget wish list by using data from tools he has already deployed.

This is my first budget season at this company. When I started, the budget was already set, and my share was pitiful. That’s to be expected; there hadn’t been a manager on staff for over a year. But I wanted to do better this year.

I will have an opportunity to make my pitch to upper management for funding the department. This presentation must be concise and easy to understand while explaining my objectives, the current state of affairs and the ramifications of not having funding. Then I will put a dollar figure on each item. I don’t expect to get all the money I want, but if my justifications are convincing, I could end up with enough to satisfy my top priorities.

Each item on my wish list will have a justification spelled out. But in case I’m asked to expand on those justifications, I will also have supporting metrics derived from infrastructure that we’ve installed since I came on board.

10. Heads In The Sand

May 1, 2006
By Steve Fox
Editor in chief

Why are businesses ignoring a potentially huge threat to e-commerce?

The solution is to take a page from the credit card companies’ playbook, aggressively monitoring transactions in real time, and demanding further authorization for moves that look fishy.

Unfortunately, in talking to regulators and many people who form bank security policy, Columnist Roger Grimes kept hearing the same story. “They’ve put so much effort into pitching authentication that they simply can’t sell the brand-new idea of transactional authorization to their bosses.

The stakes are huge, potentially billions in cash. Then there’s the lost opportunity costs to businesses, which could mount quickly if consumers lose confidence in e-commerce and stop making purchases online. “The attackers are willing to move,” Grimes says. “But no one will do anything about this until it gets too bad. We’re going to be reactionary sheep as usual.”

11. Union Official Strikes At Hoteliers

Successful Meetings
March 2006
By Rayna Katz

ON THE RECORD: John Wilhelm

President, Hospitality Industry, Unite HERE

Successful Meetings:
Unite HERE has gained a lot of strength in the last year or two. What is that attributable to?

John Wilhelm:
Our members realized it was unwise to bargain on a city-by-city basis with local owners and operators when it came time to renew contracts. Those days are long gone. Now, members realize they are dealing with billion-dollar, multinational corporations, and negotiating city by city was akin to fighting a heavyweight boxer with one arm tied behind your back.

The fact that we have contracts expiring in seven of the largest convention markets in the U.S. and Canada this year is the result of a strategic decision by our membership.

The unions had better start approaching these global corporations more comprehensively, or risk their pay, health care, and pensions.

How does that change hotel relations for the union?

Our Members are hopeful that these multinational corporations will start dealing with union issues like they deal with the rest of their corporations’ business: comprehensively instead of locally.

We are hopeful that negotiations will go more smoothly this year.

Prolonged contract negotiations cause long-term damage to a city’s reputation as a convention destination.

12. How to Build a Media Mix Model

Marketing ROI
April 2006
By Martin Wesley

Confused about how to attribute credit for sales and brand-building success? You’re not alone. It’s a hot topic given the spending on digital formats and continued media fragmentation. But firms like Vonage and XM Radio have figured it out. The answer: A discipline called media mix modeling.

For a primer on how to do it, click on:

SGTP eNews 4/20/06

“Federal Changes And Travel Trends”

SGTP’s EdCon’06, September 6-8
Hilton Alexandria Mark Center
Conference At A Glance & Registration

Download SGTP eNews 4/20/06 [doc]

1. Leaders For GSA, FEMA
2. GSA To Regain Momentum
3. Congress Approves GSA Reorganization
4. Federal Official Travel At 15.4 Billion In FY05
5. Frequent Traveler Benefits Guidelines (FTD)
6. City Pair Fuel Surcharge – FY07
7. VetBiz.Gov E-Business Portal
8. Senate Reviewing Veterans’ Job Program
9. ICE Travel Subcontract To DSA
10. Alaska Native Firms Win No-Bids
11. Travel Industry Indicators – March 31, 2006
12. Private Sector Council Goes Federal-Wide
13. Run Silent (Tom Clancy, Take Note!)


1. Leaders Named For GSA, FEMA

Federal Times
April 10, 2006
By Chris Gosier and Stephen Losey

President Bush nominated leaders for the beleaguered General
Services Administration and Federal Emergency Management Agency on April 6.

He named Virginia businesswoman Lurita Doan for the top GSA post.
Doan, if confirmed by the Senate, would replace acting administrator David Bibb, a career GSA employee who has filled the position since former administrator Stephen Perry stepped down at the end of October.
(See accompanying profile of Doan).

To head FEMA, Bush nominated David Paulison, who has led the agency on an acting basis since Hurricane Katrina.

A 30-year veteran firefighter, Paulison took the reins of FEMA in September after the agency’s sluggish response to Katrina cost former director Michael Brown his job. But the Homeland Security Department has had trouble finding an experienced emergency manager to lead the agency, according to reports.

In a statement announcing the nomination, Homeland Security noted Paulison has overseen 25 disaster declarations since he assumed his position, including Hurricane Rita. He was previously FEMA’s preparedness director.

2. GSA To Regain Momentum

Government Computer News
April 17, 2006
By Rob Thormeyer
GCN Staff

New administrator nominee, congressional approval of reorganization plan combine to give agency a boost.

Lurita Alexis Doan is about to have her hands full.

After she was nominated by President Bush to take over the struggling General Services Administration, government and industry experts said that both restoring the agency’s morale and winning back customers will be chief among several high priorities.

If nothing else, her nomination, coupled with news that Congress officially signed off on GSA’s proposal to merge the Federal Technology and Federal Supply services into the Federal Acquisition Service, provided a sorely needed adrenaline shot for the struggling agency.

Doan, whose company held more than $200 million in federal contracts when she sold it in July 2005, is relatively unknown inside government circles—which could be her biggest strength.

“From what I’ve read, she’s an out-of-the-box thinker,” said one GSA official, speaking on the condition of anonymity. “That is what we need at GSA, and she is a good business person. You put all those things together and you have a nice combination. It should bode well for GSA.”

New Technology provided secure surveillance technology at more than 85 percent of all land border ports of entry on U.S. borders with Canada and Mexico.

Morale, culture
Among her top priorities, GSA watchers say, will be to restore morale and bring back customers the agency has lost over the past few years after internal reports found contracting and spending irregularities.

Changing the culture is a huge challenge for any individual, and in this case, Doan might be short of time, given that the Bush administration is in its last two-plus years.

But one key piece of the reorganization – the so-called OneFund – still must be completed under separate legislation.

The House last year approved the creation of OneFund, but the bill has been stuck in the Senate because of concerns over how the reorganization would affect personnel at GSA’s regional offices.

3. Congress Gives GSA Approval To Reorganize

Federal Times
April 17, 2006
By Aimee Curl and Chris Gosier

Congress has given a green light for the troubled General Services Administration to complete a reorganization that’s been in the works for a year. But the most challenging task for the agency, experts say, may yet lie ahead as it tries to win back lost government customers.

“This will allow GSA to take the next step, but they’re going to have to prove it,” said Bill Gormley, a former assistant commissioner of GSA’s Federal Supply Service and president of the Washington Management Group.

“They need to prove the changes that have been made are in the best interests of the customer,” Gormley said.

The congressional action comes at a time when GSA is struggling to correct an image that it is more interested in the amount of its business than in the quality of contracting it does on behalf of its government customers.

The Senate Homeland Security and Governmental Affairs Committee is considering a bill that would let GSA combine its information technology fund and general supply fund. The House approved the bill last year, but the Senate did not.

GSA says it needs to merge the two procurement funds to remove a hassle for customers who often aren’t sure which one to use. A customer agency puts its own money into one of the two rollover funds, and GSA uses that money to pay the vendor for the products or services delivered.

The new FAS will be set up to remove barriers between purchases of information technology and other products and services. But for now, it will have to keep using the separate funds.

For many GSA employees, getting the go-ahead to reorganize means a chance to exit a prolonged state of limbo.

“Everyone was applauding it” at the GSA regional office in Atlanta after learning about the approval, said Raymond Neiner, a contract administrator at the office.

He said he and others in his office will have more certainty about what their job duties will be in the new Federal Acquisition Service.

4. War, Disaster Response Raise Travel Costs

Federal Times
April 3, 2006
By Stephen Losey

War and Hurricane Katrina drove up travel spending In fiscal 2005, and the military and the Army Corps of Engineers accounted for 88 percent of that increase.

Percent change
(Dollars in millions)
Defense Department, military
Army Corps of Engineers
Homeland Security Department

Federal travel spending hit record levels in fiscal 2005, with $15.4 billion going to sending government workers on official travel. And the agency that saw the biggest percentage jump – the Army Corps of Engineers – said much of its increase came from having to suddenly deploy large numbers of personnel after Katrine.

The Army Corps deployed nearly 2,000 engineers and other employees to the Gulf Coast in September, the last month of fiscal 2005. And getting so many employees to a devastated area carries its own set of challenges.

The Army Corps flew hundreds of its employees into staging areas in places such as Jackson, Mississippi, where they were briefed, equipped, and given shots and other medical preparation.

Engineers and employees headed overseas gather at the Army Corps’ Transatlantic Programs Center in Winchester, Virginia, for physicals and safety and cultural training.

Disaster relief operations also helped drive up fiscal 2005 travel spending by $91 million at the Homeland Security Department. By September 26, more than 4,000 Coast Guard employees and 12,000 Federal Emergency Management Agency workers had deployed to help victims of hurricanes Katrina and Rita.

5. Frequent Traveler Benefits

What is or is not allowable for government travelers came up during a recent state travel managers’ conference call earlier this month.
SGTP cites chapter 301 of GSA’s Federal Travel Regulations for the specific guidelines. We were pleased to see the ethical standards for meeting planners.

(Hard Copy)

How may I use promotional materials and frequent traveler benefits?

Promotional materials and frequent traveler benefits may be used as follows:

(a) You may use frequent traveler benefits earned on official travel to obtain travel services for a subsequent official travel assignment(s); however, you may also retain such benefits for your personal use, including upgrading to a higher class of service while on official travel.

(b) If you are offered such benefits as a result of your role as a conference planner or as a planner for other group travel, you may not retain such benefits for your personal use (see §301-53.2 of this chapter). Rather, you may only accept such benefits on behalf of the Federal Government. Such accepted benefits may only be used for official Government business.

6. GSA Clears Way For City Pairs Fuel Surcharges

Federal Times
March 13, 2006
By Deborah Funk

The General Services Administration will allow airlines to respond to fuel cost increases by adding a surcharge to tickets purchased through the City Pairs program next fiscal year.

It allows airlines to add a fuel surcharge to the price of City Pairs tickets when they have had a surcharge in place for commercial passengers for at least 14 days at the time of ticketing.

Some airline representatives, however, said they should be able to add the surcharge to the City Pairs ticket sooner, rather than waiting 14 days.

Jet fuel prices have climbed sharply in recent years.. Prices rose to $1.86 per gallon in January, compared with $1.31 a gallon a year earlier – a 42 percent increase, according to the Energy Department.

7. Reviewing A New Government E-Business Portal:

Contract Management
April 2006
By Ryan Dickover offers a nice collection of service capabilities: marketing reports can be generated complete with searcher-specific qualification parameters – in fact up to 31 different combinations can be leveraged and the report’s results ranked with selected fields displayed. Streaming three-minute video clips can be hosted off the site, helping veteran businesses showcase themselves at no additional cost (the firm must produce the video clip themselves and send it to VetBiz). The site also accepts automated feeds from CCR, Dun & Bradstreet, and even the State of California’s Department of General Services. Even more, FedBizOpps and VA Business Opportunities postings are automatically forwarded to registered firms based on NAICS and Product Service Code matching. Lastly, something important for buyers using the site – all businesses served from have self-certified as compliant with the 51 percent rule of Public Law 106-50. Each business is required to pass a system of screening questions during registration.

Additionally, because it’s Internet-based, it’s not only Federal buyers who have taken advantage of, but even corporations like K-Mart have reached veteran-owned businesses through the portal.

There are more than 10,000 veteran and service disabled veteran business loaded into VetBiz’s database, and the site’s traffic throughput jumped from 32,392 hits in 2004 to 85,193 last year – an increase of more than 200 percent.

8. Senators Seek Review Of Veterans’ Job Program

Federal Times
April 3, 2006
By Rick Maze

Concerned about joblessness among veterans but unsure what to do about it, the leaders of the Senate Veterans’ Affairs Committee are asking for help.

Senators Larry Craig, R-Idaho, the committee chairman, and Daniel Akaka, D-Hawaii, its ranking Democrat, want the Government Accountability Office to figure out whether a Labor Department program designed to help veterans find work is successful.

If so, they want to spend more money on it; if not, they want to try something else, said Jeff Schrade, committee spokesman.

Craig and Akaka are asking GAO to study the program – the Veterans’ Employment & Training Service – Because they don’t feel they have enough information to judge whether veterans are being helped.

“Under the current system, individuals only have to register and enter the employment system to be counted as an assisted veteran, thereby giving the false impression that the One-Stop Career Centers are doing a better job of finding employment and training opportunities for veterans,” said Joseph Sharpe Jr., with the American Legion’s economic commission.

9. DSA Wins Subcontract For ICE Travel And Ticketing Services

Federal Times
March 27, 2006

Travel Management
Northhrop Grumman Corp. has selected information technology firm DSA as a subcontractor to Northrop’s contract with the Immigration and Customs Enforcement Office of Detention and Removal.

DSA of Fairfax, VA., will supply travel coordinators and travel authorizers for the office’s centralized ticketing program, according to a company statement.

The travel authorizers will screen requests, coordinate commercial travel arrangements, request and manage country clearances through embassies, and coordinate travel authorizations through field offices and federal authorities.

10. Alaska Native Firms Capitalize On No-Bid Deals

Washington Post
April 12, 2006
By Griff Witte
GAO Audit Warns Of Contract Program’s Potential For Abuse Without Greater Oversight.

Alaska Native Corporations have quadrupled their share of federal small-business contracts in just the past few years, but the government has provided lax oversight that opens the door to potential abuses, according to a new audit by the Government Accountability Office.

With federal procurement offices increasingly spread thin with smaller staffs and fewer resources, the firms’ business has surged as the government turns to them for help without having to conduct competitions. From 2000 to 2004, the value of contracts received by ANCs under the small- and disadvantaged- business program jumped to $1.1 billion from $265 million, according to a draft copy of a GAO report obtained by The Washington Post.

The report quotes an unidentified contracting official as describing ANC firms as “an open checkbook” because the normal limits on no-bid awards do not apply to ANCs.

A detailed GAO review of 16 large contracts found that ANCs, which are not always run by native Alaskans but are supposed to benefit them, have devised a number of tactics to maximize their contracts. They have, for example, created new subsidiaries to inherit contracts when the original subsidiary grows too large to be considered “small.” They have also created partnerships in which the ANC firm subcontracts out much of the work to large, non-Alaskan firms. In one case the Energy Department gave an ANC firm an $80 million contract because the firm planned to give the work to a large, incumbent contractor.

“The reality is the SBA’s lack of accountability is not only hurting this nation’s small businesses, but most importantly, it is hurting tax payers,” Rep. Nydia M. Valazquez (N.Y.), ranking Democrat on the House Small Business Committee, said in a written statement.

11. Travel Industry Indicators

March 31,2006
By James V. Cammisa, Jr.
Travel Industry Analyst

First quarter performance is setting the tone for what we’re likely to see throughout 2006. While travel demand is solid, it is improved pricing power that’s really generating industry revenue growth.

Domestic travel in January/February has shown a respectable 3.6 percent year-over-year increase based on data from Smith Travel Research (STR). Their reports generally provide the best overall indicator of domestic travel demand. On a regional basis, the industrial Midwest and West are showing the strongest year-over-year increases, while the East Coast is experiencing smaller gains.

Resistance to pricing increases by travelers, at present, does not seem to be a problem. Consumers are aware that travel prices are rising, but they are not backing off. If there is resistance, it’s likely to be in leisure airfares, simply because the public has become so used to bargain fares.

Business travel is continuing to show the strength we saw throughout 2005. The business travel lead indicators that we track all remain positive. These include corporate profits, new payroll hirings, and spending for capital goods. Corporate optimism is also at high levels.

Travel spending fortunately may be affected less than other types of outlays if a retrenchment does occur. Much of the 2003-05 overspending was for consumer durable goods – autos, home furnishings, appliances, etc. Over the three-year period noted, Department of Commerce data show real durable goods spending rose by 26 percent. Spending for non-durables and services, was just 12 percent, or less than half the durable rate of increase. An argument therefore could be made that (a) durables would be impacted most by any consumer spending cutbacks, and (b) with less competition from durables, travel could actually benefit.


Industry Pricing Power Improving But
Still Has Much Further To Go

The early months of 2006 are showing a continuation of improved industry pricing power. Airfares are up 10.6 percent as compared to last year; hotel ADRs up 6.4 percent. While this is encouraging, there’s still much further to go when one looks at longer-term pricing trends.

Over the 2000-2005 period, the Consumer Price Index (CPI) rose by 13.4 percent. Our composite domestic travel price index increased by a modest 6.3 percent, or less than half the rise in the CPI. Data from Smith Travel Research show average hotel room rates over this
five–year period up just 6.6 percent. Domestic airfares were 16 percent below the levels of 2000.

In previous newsletters, we’ve pointed out the significant profit leverage that results from improved pricing power. Studies by the McKinsey Consultants show that for the average U.S. corporation a price increase of only 1 percent yields an 8 percent increase in operating profits. The studies clearly show there’s far more leverage from pricing increases than from either cost-cutting or sales increases. Almost all of the added revenue from higher prices falls to the bottom line.

As most travel marketers know, it’s not an easy task to raise prices. We live in a price-sensitive world where buyers now have ready access to price information and can comparison shop with a click of a mouse. Raising prices therefore requires the use of strategies that go beyond simply putting across-the-board increases in place. Prices can be increased in other ways, that include: (a) changing one’s business mix between higher and lower paying customers, (b) reducing transaction costs by using lower cost distribution channels, (c) lowering commission and override payments in one’s existing channels, (d) better managing discount inventories allocated to third-party intermediaries, and (e) selling more upgrades and premium services.

Another pricing strategy that has gotten less attention is selling more so-called “bundled’ products, i.e., packaging one’s product. Rather than selling just a hotel room, you’re now selling a broader travel experience that may be less price sensitive. Also, as part of a bundled offering, the price of one’s own product becomes less transparent and, with other partners in the package, there can be a sharing of the discounts and savings offered to the buyer. What this all can mean is that, surprisingly, you may get higher prices as part of a travel package than from selling a stand-alone product.

12. Industry Advisory Group Shifts Focus To Federal-Wide Fixes

Federal Times
January 30, 2006
Howard Weizmann
Private Sector Council

Since its founding two decades ago, the Private Sector Council has helped individual agencies fix their business and management problems. Thirty member companies, including IBM, Deloitte & Touch, Boeing and Pfizer, introduce business methods developed in the private sector to the federal government. The Council has worked on more than 400 projects, from helping the Agriculture Department improve its costly mail and paper Food Stamp system to helping the Coalition Provisional Authority in Iraq develop a new salary structure for the 1.3 million employees of Iraq’s civil service, military and state-owned enterprises.

In early 2005, the Private Sector Council joined with the Partnership for Public Service. Howard Weizmann, who became council president in November after about 25 years in the private sector, has announced plans to change the council’s model from dealing with individual agencies to solving governmentwide problems. His first target is the government’s often-times inefficient procurement of goods and services from the private sector. Last year alone, the government spent $320 billion to buy goods and services.

There’s an imperfect knowledge of rules by everybody. So often in federal service, you’re managed by the lowest common denominator. Someone sees a problem that may not be a problem, but the whole system stops. No one takes risks because there is no upside to taking risks.

13. Run Silent: Special Ops Sub Becomes Hub for Irregular Warfare

National Defense
April 2006
By Harold Kennedy

(For those who enjoy Tom Clancy, you can just see Sean Connery in “Hunt for Red October II”)

ABOARD THE USS OHIO—A short cruise on board this former nuclear-missile submarine off the coast of Washington state offers a glimpse into how the Navy and special operations forces plan to engage in covert military action.

During a three-year overhaul, the Ohio’s 24 nuclear intercontinental ballistic missiles, known as Tridents, were removed to make room for 154 Tomahawk cruise missiles and facilities for as many as 66 special operations troops, plus a 35-man joint command element.

The joint command unit could control the ship, any commando passengers and conceivably a task force of other ships, ground troops and air components, Rear Adm. Frank M. Drennan, commander of Submarine Groups 9 in Bangor, Wash., and 10 in Kings Bay, Ga., told National Defense.

Unlike the Tridents, which were developed during the Cold War to help dissuade the Soviet Union from launching a nuclear attack against the United States, the Tomahawks—armed with 1,000-pound conventional warheads—have been fired frequently in combat.

Two of the Ohio’s 24 vertical missile tubes have been reconfigured to serve as lock-in/lock-out chambers that allow special operators surreptitiously to exit and re-enter the sub while it is submerged.

Seven of the remaining tubes have been rebuilt to hold canisters to store equipment that the commandos will need on their missions, including “anything from rafts to munitions,” said the ship’s skipper, Cmdr. Michael K. Cockey.

Such capabilities will enable the four submarines that are being converted to operate close along hostile shores—in the green littoral waters, as opposed to the blue waters of the deep ocean—and thus play a much larger role in the war against terrorism, Drennan said.


SGTP eNews 04/10/06

“Travel Industry Marketing
Trends & Ideas – A Big One”

Download SGTP eNews 04/10/06 [doc]

1. AnCon’06 Evaluations

SGTP hosted 445 delegates during AnCon’06; 51% (225) buyers; with an overall 8.7 rating vs. 8.6 a year ago. The AnCon’06 Evaluation has all time highs for 11 of the 15 categories scored, Overall Conference Experience, Ice-Breaker Reception, Breakfast (opening), Hosted Reception, Breakfast & Annual Meeting, Awards Lunch, E-Travel Mall/E-Commerce St./Foyer, Mentor Program, Hotel & Arrangements, Faculty, Hand Out Materials.

32% of the delegates earned 723.4 CEUs for their career and professional advancement!

2. AnCon’06 Best Travel Mart Booth Winners

Choice Hotels International, Arlington Residence Court Hotel, Days Hotel & CC Dulles/Crown Plaza Dulles, Florida Keys & Key West/Monroe County TDC, OAG, All Nippon Airways, Starwood Hotels & Resorts/Sheratons, Woodfin Suite Hotels.
Congratulations To All!!

3. Travel Industry Indicators

January 28, 2006
By James V. Cammisa, Jr.
Travel Industry Analyst

Fourth-quarter performance continued to reflect travel patterns seen in the first three quarters of the year.

Domestic travel by all modes in 2005 rose an estimated 3.1 percent. The 3.1 percent gain is down from the more robust 2004 increase of 4.6 percent. From a historical perspective, 2001-2003 were the years of post-9/11 softness; 2004, the rebound year; and 2005, a return to normalcy.

Domestic airline traffic for the year showed a 1.6 percent gain in passenger enplanements. This is also below the 2004 rebound year increase of 4.8 percent. While planes are flying full, and the traffic gains respectable ones, domestic passenger counts are still below the peaks reached in 2000. The primary reason is that the major airlines have withdrawn numerous aircraft from service, or shifted them to international routes. With less domestic capacity, load factors have risen sharply, reaching 78.0 percent in 2005, 2.7 percent higher than the prior year.

Domestic hotel occupancy for the year climbed to 63.1 percent, almost at the 63.3 percent level reached in year 2000, the industry’s most profitable year.

Travel pricing increases were the best news for our industry in 2005. Our composite index of domestic travel prices was up 5.4 percent. Domestic hotel ADRs were up 5.3 percent, based on Smith Travel Research data. In the top 25 metro markets, the increase was even greater, at 7.4 percent. New York City recorded a 13.9 percent increase.

Business travel economic fundamentals are uniformly positive. Corporations are now reporting their fourth-quarter earnings, and these are meeting Wall Street analyst expectations. Profits for S&P 500 companies will record their tenth consecutive quarter of double-digit gains.

Business optimism surveys are also all consistently positive. A recent Business Roundtable Survey, conducted among 117 major corporations, shows respondents citing positives in their ability to rebuild profits, streamline their cost structures, and accumulate cash. An NABE survey of 142 corporate economists cites the optimistic outlook for new hirings and capital spending, both indicative of a climate of growth and expansion. Increases or decreases in capital spending closely parallel ups and downs in business travel.

Possible weakness in business travel, if they occur, will largely result from our own industry’s inability to meet the business traveler needs. With hotel occupancies moving higher and higher, this means more sold out rooms on prime week days, In October of last year, for example, occupancy in New York City reached 85.5 percent. Average room rates soared to $245. As for air travel, fewer domestic airline flights mean more crowded planes and fewer upgrades for business travelers. While all the economic fundamentals are right for business travel, the non-economic factors could be an impediment to strong growth.

Changes in the business environment have crippled the legacy airlines. In another area of travel, change has had the same effect. Year-end 2005 data on the travel agency market, released by the Airlines Reporting Corporation (ARC), show the number of full-service agency retail locations now down to 15,400. Since the year 2000, more than 12,000 agency locations have closed their doors. They’ve clearly been replaced by the Internet. Today, more than twice as many travelers use the Internet for travel, than those using travel agents.

4. Travel Industry Indicators

February 28, 2006
By James V. Cammisa, Jr.
Travel Industry Analyst

Early-year Distortions in travel patterns are evident, traceable to a warmer than normal winter in the Northeast, Midwest and parts of the South.

Close-to-home tourism interests benefit most, while distant escape-from-the-cold sun destinations and cruises don’t get the early season boost in advance bookings they normally do. In January, on a national basis, average temperatures were 8.5 degrees above normal. Winter snows didn’t arrive in the North until mid February.

Additional consumer economic data over the next four months will tell us whether the positives will outweigh the negatives. And, for travel, Spring Break performance will tell us how the summer leisure market is likely to perform.

Business travel continues the strength we saw in the fall of last year. Both transient business travel and meeting and convention business are working to boost hotel room demand in major business centers, and business travelers are paying significantly more for their rooms. Marriott reports that its negotiated corporate rates are up 7-9 percent this year.

Higher prices are also evident now for car rentals and for airline fares. Surveys of rental car rates in six major cities, by The Tennant Report, show a 10 percent year-over-year increase. Airline fares in January were up 8.8 percent over a year ago. But airfares are still 15 percent below what they were in 2001. Typically, hotel and rental car expense, when combined, account for essentially the same portion of the T&E dollar as airfares do alone.

Hotel sector financial performance shows a picture that is quite different, with the industry likely to record its best year ever as profits pass the $25 billion mark. Pricing is of course the key factor, as most every dollar generated from pricing increases falls to the bottom line. Smith Travel Research projects that for 2006, domestic ADRs will be up 6.0 percent and RevPar up 8.0 percent.

Hotel room inventories are being controlled a lot better, and this is accounting for some of the improvements in pricing. Online travel agencies are no longer getting the deeply-discounted inventories that they had when the hotels were trying to recover from the industry’s 2001-03 downturn.

Overseas markets are attractive also to the major hotel chains. The recent Hilton-Hilton International Group takeover by the domestic company reflects this interest. The combined company will operate in 80 countries. The acquisition of Fairmont Hotels & Resorts by an investment group that also own Raffles, is another example. It will operate in 24 countries, with 120 hotels. Particularly attractive to chains such as these are emerging mega markets such as China and India.

Trend Watch
Legacy Airline Restructuring Now Showing Progress

Most everyone in our industry has closely followed the fortunes, or lack thereof, of the legacy airlines. Their staggering losses have totaled more than $40 billion over the past five years, with four Chapter 11 bankruptcies: USAirways, United, Delta and Northwest. While external factors that included the shock of 9/11, the Iraq War and soaring jet fuel prices were at work, the legacy carriers were all operating with outdated business models, unprepared for a changed business environment.

For the airlines, what is most encouraging to us is that their new business plans now include clearly defined and distinctive strategies that didn’t exist in the past. In a landmark book, published twenty-five years ago, entitled Competitive Strategy, Harvard Business School professor and consultant, Michael Porter, pointed out that it is essential for every company in every industry to adopt one of three strategies if it is to succeed: (1) Differentiation, a strategy which sets one apart from the competition with value added benefits for the customer, or (2) Cost leadership, that enables one to underprice the competition, or (3) Focus, a strategy directed toward a particular customer or geographic market segment underserved by the competition. Without either of these, he said, one is “stuck in the middle,” likely to be viewed as a commodity with low profitability and highly vulnerable to new competition. All suffered the same fate. The only exception was Southwest, which since deregulation, has continued to be profitable.

In today’s airline restructuring plans, we now see Porter’s principles finally being adopted. United is trying to differentiate itself with distinctive business traveler services. USAirways/AmericaWest, newly merged, wants to become the industry’s largest low cost leader. Northwest has set geographic focus on Upper Midwest; Delta and American, on international routes, where they have a competitive advantage with long range aircraft and experience in business class service.

There are lessons here for us all. When the business environment changes, you’ve got to change with it. Jack Welch, retired GE chairman, put it this way: “If change is happening on the outside faster than on the inside, the end is in sight.”

5. Reelin’ In The Years

Meeting News
January 30, 2006
Source: Meeting News survey of 381 meeting buyers

Are shifting age demographics causing changes in your meetings or in the planning process?
Yes significantly 6.0%
Yes moderately 20.7%
Yes slightly 32.3%
No 40.9%

With three-fourths of planners saying they’re not doing much or anything differently in the face of generational changes, some experts say they’re missing the boat.

6. Hotel ADR Could Climb, Renovations At Record Level

Convention South
March 2006

NEW YORK---According to PricewaterhouseCoopers’ latest forecast, average daily rates (ADR) per occupied room at U.S. hotels will rise by 5.6 percent this year. “Although the national average rate of increase of 5.6 percent is high, the increases in many cities will be even higher---7 to more than 10 percent,” said Bjorn Hanson, Ph.D., and partner, PricewaterhouseCoopers Hospitality and Leisure practice. “Also, guests will see even larger increases during peak periods.”

The increase is a result of rapidly increasing occupancy, Hanson said, adding that hotel owners are recovering record levels of investment in room renovations and enhancements, including improved beds, flat-screen TVs, high-speed Internet connections and other enhancements, like irons and ironing boards at limited service hotels; 24-hour business center services; triple draping window treatments; kiosks and in-room check-out options; enhanced quality bath amenities, such as status branded items and larger soap bars; cordless telephones; quality sound systems (radios and CD players); easy-to-use clock radios; and in-room exercise equipment (treadmills, exercise bikes, stair climbers).

7. U.S. Per Diems Rise Above $300 Mark

Business Travel News
2006 Corporate Travel Index
February 20, 2006
By Jennifer Merritt

Business travelers who paid non-negotiated corporate rack rates for travel services at the end of 2005 racked up an average tab of $309.58 for hotel room rate, car rental and three meals a day in the 100 largest U.S. metropolitan areas. That dollar amount is up almost 7.5 percent from the previous year’s total of $288.13.

Of the three travel per diem components, hotels in 2005 saw the most significant increase, of approximately 15 percent. The average daily car rental rate, on the other hand, took a dip, dropping from $80.98 in 2004 to $77.58 in 2005. Index numbers did spike in 2004 from 2003, so the dip may have been flatter than the index suggests.

8. Top 25 Markets Expected To Drive Country Through 2006

March 6, 2006
By Mark Lomanno
H&MM Columnist

As with any analysis of lodging performance, the place to start is room availability. The cycle of building over the past several years in the top 25 markets reveals a remarkable pattern change.

In the early part of the decade new construction in these markets was not only well ahead of the rest of the country, but increasing at the same time when building elsewhere was slowing. That all changed in the last couple of years as the slowdown in new product openings in these markets ground to a halt.

As supply growth in most of the top 25 markets was virtually non-existent, lodging demand has made a remarkable turnaround, not only in these markets but all across the country. However, demand growth in these largest markets has been especially robust consistently outpacing the accelerating demand growth in the rest of the country. This disequilibrium in the supply/demand relationship has helped drive record occupancy percent change increases in these markets.

With occupancy levels strong and still accelerating, it is not at all surprising that average room rate growth looks to still be in the beginning stages of a long run. All underlying fundamentals that tend to drive room-rate growth are favorable at this time. In addition, it seems highly unlikely that a major change in those fundamentals will occur in the next year.

Therefore, from our perspective, it appears there is still the distinct possibility of upward lift in the pace of room-rate growth, especially in the top 25 markets.

9. Large Companies. Reap Air Discounts

Business Travel News
March 20, 2006
Source: Topaz International

Average Domestic Negotiated Discount By Corporate Air Volume, 2005

Corporate Air Volume Average Negotiated Discount

More than $100M 19.0%

Feds—32%? Is this a survivable WIN/WIN?

10. State Of The Industry Report: International Meetings

February 20,2006
By Marshall Krantz

Compared to 2005, the number of attendees at your international events this year will:

Increase 24.4%
Decrease 11.1%

How does your current lead time for international meetings compare to before 2001?

Shorter 27.1%
Longer 11.1%

61.8% of respondents answered “same as before 2001.”
Source: MeetingNews survey of 288 meetings buyers

Amid a healthy level of activity, site selection, costs and security are major concerns.

Driven by globalization and economic expansion, U.S.-based organizations are ramping up their international meetings, with more events and more attendees.

Another conclusion: As with real estate, location is the most important factor for U.S. organizations when picking destinations for their international meetings.

The same considerations that apply to corporate meetings domestically apply to international meetings: an easily accessible destination, quality accommodations and service, security and value.

Although quality trumps cost, according to the survey, companies continue to watch the bottom line as sharply as they did during the recession of 2001, especially for their largest meetings. So planners sometimes chose destinations based on their ability to get quality accommodations and service at the best price.

Still firms don’t let cost considerations get in the way of business objectives.

11. Brands Focus On Worldwide Growth

March 6, 2006
By Stacey Mieyal Higgins

American hotel companies know that franchising beyond our borders is a necessary step for continued growth. While global franchising does not compare to the scale of domestic business, industry players agree there’s a world of opportunity.

Without a doubt, China is attracting attention from American franchisors.

With the 2008 Olympics in Beijing, an emerging middle class and a population of more than one billion people, it’s no wonder hoteliers are looking east.

India also is seeing an emerging middle class. The National Highways Development Project is scheduled to be complete by 2007, according to the National Highways Authority of India Web site.

India has a lot of potential, according to Mike Leven, president and c.e.o. of U.S. Franchise Systems. The company franchises Microtel and Hawthorn Suites internationally.

There are opportunities and challenges for franchising in the Middle East, according to Ed Fuller, president and managing director, international lodging, Marriott International.

Europe will be Choice’s largest market outside the United States, but it is important to remember the different regions have different needs.

12. Brands Push Standards To Stay Competitive

February 20, 2006
By Shannon McMullen
Contributing Editor
National Report --- The fight for competitive advantage has led to a phenomenon in the hotel industry known as continuously evolving hotel brand standards.

With lodging companies focused on keeping their products fresh and meeting guests’ needs and expectations, many are using the power they hold over enforcing brand standards as a means of making sure their chains are up to par for today’s savvy travelers.

These brand edicts, however, often require significant investments from hotel owners and are strictly enforced by their respective lodging companies.
Many owners agree that this evolution—and investment--- is necessary to keep guests happy and coming back to their hotels.

Change Is Good
Although there are some hotel owners in every system that view ever-changing brand standards as burdens on their bottom lines, others embrace the opportunity to improve their operations.

There is a fine balance that must be attained between making changes that guests want and competitors have given into, and those that will really make a difference in terms of consumer loyalty and profitability, executives said.

“Brands that pioneer with changes are ultimately copyable. The key with evolving brand standards is to make sure you leverage a sustainable advantage,” said Aaron Katz, V.P., brand strategy and corporate development for Choice Hotels International.

Changes at Comfort Inn included new signage, bedding, bath products and a new breakfast package, all of which were designed to reinforce a revamped brand image centered on offering guests warmth through hospitality.

“ Guests will tell you they want everything,” Katz said. “It is not a viable option to give them everything. It doesn’t make good business sense. But today you have to give them something. It is up to the brand to be creative but provide a system for success that works around good returns. The future is now, and no one wants to be left behind.”

13. Lower-Priced Categories Outperform Pricier Segments

February 20, 2006
By Mark Lomanno
H&MM Columnist

Discussing segment performance in today’s robust lodging environment provides us with a unique opportunity to highlight relative degrees of good operating results. Regardless of the industry segment that we analyze, the current acceleration in performance results is the first time since we began tracking the industry in 1987 that virtually every industry segment is experiencing stellar results. While this is the best of news for the U.S. lodging industry, it makes it hard to distinguish between competing groups.

While there is some degree of separation among the chain scale segments, this is the first time that a lower priced category, in this case the mid-scale-without-food-and-beverage group, has performed as well as or even slightly better than pricier segments.

Looking at Smith Travel Research’s two mid-scale groups, those with F&B and those without, both outperform the industry average in the key measure of revenue per available room. While mid-scale hotels without F&B have done a bit better, the majority of their incremental performance is due to their pricing. Again, price increases in this segment rival those of luxury properties, which is one of the factors that make this cycle unique.

14. Rate Push Tops Extended Stay Priorities

March 20,2006
By Jeff Higly

National Report --- The occupancy premium that the extended-stay segment has versus the overall lodging industry is growing again. Extended-stay owners and operators said that’s a good thing, as they are looking at 2006 as a year to aggressively raise average rates.

According to “The 2006 U.S. Extended-stay Lodging Market” report from The Highland Group, the extended-stay occupancy rate in 2005 was 76.2 percent----13.1 points over the occupancy rate of the overall lodging industry. The premium peaked at 14.3 points in 2000, and its low point was 12.1 points in 2004.

Taking Off
Key facts and figures from the extended-stay segment:

  • Total extended-stay supply was 257,255 rooms at the end of 2005. Eighty-five percent of extended-stay rooms are located in the top 100 largest metropolitan statistical areas.
  • Economy extended-stay brands are absent from 40 of the top 100 MSAs.
  • With about 14,000 rooms, Atlanta is the largest extended-stay market.
  • The segment added nearly 14,000 rooms in 2005. The 5.7-percent supply growth was the largest in three years.

15. Travel Agents Vital To Hotels

March 6, 2006
By Harvey Chipkin
Contributing Editor

In 2005, Marriott International broke its record for commissions paid to agents---more than $177 million for the calendar year. Similarly, Hilton Hotels Corp. saw commission payments grow about 20 percent in 2005 over the previous year --- also a record. At Carlson Hotels Worldwide, growth in payments for selective-service brands exceeded 24 percent. For full service, the growth was about 9 percent.

Two reasons for these increases are that these companies have increased. But there is a lot more to the pattern, stemming from changes in both the agency and hotel businesses.

The attrition in the agency ranks has actually resulted in enhanced professionalism among those remaining.

Marriott continues to reach out to agents because agency bookings are always the highest rated third-party distribution channel; they are also the lowest cost distribution channel outside Marriott’s own sites.

With agents continuing to book through the Global Distribution Systems, which include Sabre, Amadeus, Apollo and Worldspan, these bookings are inexpensive---especially compared to bookings on the web sites like Travelocity and Expedia.


President: Randy Schools

Rec Gov is a co—op of over 40 recreation associations and MWRs working together to better serve their members.

Washington, D.C.

Bolling Air Force Base
Department of Commerce
Defense Intelligence Agency
EPA Env. Protection Agency Rec. Association
FCC Federal Communications Commission
Fort McNair (MDW)
Government Printing Office
HQ Army Recreation Services-Pentagon
Department of the Interior
Internal Revenue Service
Department of Labor
Library of Congress
National Archives
Security Commission Rec Association
Department of Transportation
Dept. of the Treasury Recreation Association, Inc.
USDA Employee Association (ESRA)
Veterans Administration Employee Association
Walter Reed Army Medical Center


Defense Logistics Agency
Fort America
Fort Belvoir Recreation Services
Fort Myers Military Community
Office of Naval Research Recreation – Arlington


Energy Department Employee Association
Fort Meade
National Naval Medical Center Bethesda
NIH National Institutes of Health R&W
National Institute of Standards and Technology

Out of Region
Fort McCoy – Wisconsin
Fort Hamilton – New York


17. E-mail For Customer Acquisition; Avoiding Costly Mistakes

February 13, 2006
Tricia Robinson

Question: Is using e-mail as a customer acquisition tool really such a bad idea?

Answer: Casting e-mail campaigns like a net across a sea of unsuspecting recipients is seldom a good idea. However, you can use e-mail as a customer acquisition tool. How? By carefully targeting your efforts to customers who already have a high affinity for your brand or product. Two great ways to do this are to bring current customers into the e-mail channel and to find new customers by borrowing credibility from a trusted source.

Bring current customers aboard. During the course of your communications, ask customers if they would like to join your e-mail list.

Borrow credibility from a source. Attract potential customers by participating in cross-promotions with partners or affiliated business.

Always offer something of value.

At the heart of every successful e-mail marketing program is a carefully cultivated house list comprising permission recipients who look forward to a company’s messages.

Question: How can I ensure error free e-mail campaigns when I am faced with last-minute changes?

Answer: There’s something about the speed and availability of e-mail that makes it easy to wait until the last minute. Besides the risk of poor recipient experience, the stakes are even higher now that regulations exist.

Set your campaign calendar. Set up a procedure that requires campaigns to be scheduled at least one hour before delivery.

Establish a campaign checklist. Include everything you need to get the campaign out the door. Include list build, redirects, unsubscribe, etc. You may not fill it out for every campaign, but it can serve as a much-needed reminder when processes are rushed.

Check and double-check for the unsubscribes.

Don’t skip the quality assurance process. If you don’t have a QA process, get one. If you have one, make sure you follow it every time

Don’t approve until you’re ready to go.

18. Embrace Your Competition

Contract Management
March 2006
By Marsha Lindquist

The Benefits of Embracing Your Competition
Still not convinced? Consider the following five reasons why you should embrace your competition.

1. You Make a Bigger Pie
When you get your market to recognize that the types of products or services you offer are in big demand, you help people understand what need you fulfill. This also makes the market aware of other companies that can fulfill the same need. As a result, the pie gets bigger for everyone, even companies you perceive as your competition. And when you embrace your competition, you’ll be able to reach corners of the market that you could never reach before.

2.You Complement Your Talent with Someone Else’s
Imagine your market as a glove. Perhaps when you put your hand in a glove, you can’t fill the whole thing. But your competitor can fill in the gaps. You fit together within the market because you complement each other’s talents.

3.You Look Good and They Look Good; The Win-Win Mentality
When you refer a prospect to your competitor, if they do a bad job, then their performance reflects poorly on you too. In a relationship like this, people begin to associate the two of you together. So, make sure you rub up against people who smell good.

4. You End Up with More Business
When you generate more energy and your competitors generate more energy, business picks up. That’s just the way the world works. When you contact people and meet people, then you get more business. This build up of energy results in a better market advantage because you’re not only seen with that one relationship, but you’re also seen with other relationships that are tangential to you.

5.You Learn New Skills
When you work with other people, you learn from them even if you aren’t necessarily trying. And they learn new things from you too. This learning is important, because you must fully understand how your skills complement each other and how they are different. As a result, you enhance not only what you do, but you also enhance your brand because you know better what sets you apart. This gives you the opportunity to make yourself unique, which only has a positive impact on your business.

How Can You Approach Your Competitors?
The first step in building relationships with your competitors is knowing who they are and what they do.

If they aren’t receptive, then move on to another competitor. This relationship has to be reciprocal.

19. The Myth Of Customer Loyalty

1to1 Magazine
March 2006
By John Gaffney

Are loyal customers truly more valuable? We reveal the hidden costs of poor execution and the real value of loyalty done right.

There has never been a better time to focus on building customer loyalty. Multichannel options and a barrage of messaging have made consumers more fickle than ever. Take retail, for example. The number of customers stating they’ve been shopping at a retailer for longer than one year dropped in 2005 to 77.2 percent from 88 percent the year before, according to a new report from Adjoined Consulting and SAS.

For those organizations that can capture their customers’ loyalty, the rewards are huge. A Bain & Company study shows that companies defined as loyalty leaders grow revenues twice as fast as their competitors, and do so with lower costs.

Many companies assume that a loyal customer is automatically a valuable customer. Not true. Many companies think that offering a loyalty program guarantees customer loyalty and automatically increases customer value. It doesn’t. And many companies believe they can foster loyalty with one program to fit all customers. Wrong again. Worse, many companies consider their points program a complete loyalty initiative. It’s not.

Buying into these myths has left many loyalty initiatives in limbo at best. It’s time to dispel the myths and create loyalty strategies that drive real results.

Myth 1: A loyal customer is a valuable customer
The problem with not doing so is that a customer who looks valuable on a balance sheet may in fact be a high-maintenance drain on customer service, a bully on contract terms, or even a detractor.

Myth 2: Offering a loyalty program guarantees loyalty
Some people may join out of convenience (e.g., someone who travels out of Seattle may belong to United Airlines’ frequent flier program but actually prefer to fly Alaska Air anytime he can). Others may join just to accrue discounts where they sometimes shop.

A 2005 Carlson Marketing Relationship Builder survey showed that consumers have various reasons for joining—and not joining—loyalty programs.

Myth 3: Points programs are a complete loyalty initiative
According to a Carlson survey, the top three reasons a customer will remain loyal are value for money, quality of products, and customer service. None of those things have anything to do with loyalty programs. That’s why considering strategic loyalty initiatives, rather than only loyalty points or rebates programs, provides an important difference. A loyalty initiative brings all facets of your company in alignment with the goal of keeping and growing desired customer groups. A loyalty program is one important tactic that is part of, not the totality of, a loyalty initiative. A customer can be a member of your loyalty program, but not necessarily be a loyal customer. Customer loyalty is an outcome of your loyalty initiative.

Myth 4: Companies can foster loyalty with one initiative to fit all customers
Just as the concept of one-to-one marketing encourages companies to connect with all their customers through customized treatments, loyalty programs should have the same goal. Companies must determine their customers’ value and then create the appropriate loyalty initiative for each customer group.

Myth 5: Loyalty initiatives are all about making customers happy
Loyalty initiatives must address customer expectations, but to be truly strategic they also must achieve the goal of increasing the value of the customer base.

Myth 6: Loyalty programs automatically increase the value of participants
A customer who signs up for a loyalty program may not spend more with your company just because he gets rewards for that spending. But few companies consider customer value when creating their loyalty initiatives.

20. Top Reads For Work & Play

March 2006

What was the last book you read for professional or leisure reasons, and why?

“Fun is Good” co-authored by Michael Veeck
Michael Veeck’s dad, Bill Veeck, a professional baseball organization owner, was known for being one of the first to create wacky promotions to entertain fans.

Today, Mike’s philosophy is based on managing his four to five minor league baseball clubs but can be used in any office setting to encourage employees to be creative.
--Kathleen Cartland, Charleston Metro Sports Council

“Failing Forward” by John Maxwell
I read it for both personal and professional reasons. I read it because, although it pains me to say, I don’t always win the proposals and bids I present/ submit, and there is always something to learn from failures.
--John Harris,


SGTP eNews 04/03/06

“You Are Going Global”
(The Theme Of SGTP’s AnCon’06, Last Month!!)

Download SGTP eNews 04/03/06 [doc]

SGTP’s EdCon’06, September 6-8
Hilton Alexandria Mark Center
Conference At A Glance & Registration

1. Thinking Of Going Global? Six Pitfalls To Avoid
March 2006
By Laurel Delaney

Going global takes guts. You have to confront the unknown, do what it takes to land the deal, and make your customers happy. Learning what mistakes not to make—are even more important in foreign trade.

(1) Overseas buyers are already interested, so we don’t have to do any more research.
Not true. Doing market research can help you explore and identify the fastest-growing, most penetrable, and profitable market for your product.

(2) It’s OK to have only certain employees dedicated to the company’s global business.
To ensure coherence, every employee should be a critical member of your international team—from the executive to customer service.

(3) My product is really low in price---so it’s guaranteed to do well in an international market.
Customers typically pay attention to packaging first, quality next, and price last. It’s very difficult for small business to compete on price alone, but quality leaves no room for negotiation.

(4) My product sells well here, so I’m not going to make any changes to it for exporting.
To be successful in export markets, you must tailor your product to meet the needs and expectations of the local customer.

(5) Let’s be all things to all people and do business with the world.
The truth is, you can’t be all things to all people or you’ll disappoint everyone. Instead, pick a product or service to take overseas. Then stick with it. Ease your way into the market.

(6) I know that my product sells well in the United States, so I’m certain that it will sell overseas.
Just because your product is in demand on the home front doesn’t mean that it will be well received in a foreign country. You may need to consider modifying your strategy.

2. Global Gotchas: How To Avoid Hidden Traps In International Laws

February 20, 2006
By Mary K. Pratt

Seasoned managers are well aware that laws and regulations vary from country to country, yet lawyers and executives acknowledge that there are some areas that can trip up even experienced pros. They range from navigating the nuances of labor laws to negotiating procurement deals. Experts say many companies discover legal traps only after they fall into them.

That’s all the more reason to get a handle on potential pitfalls in advance, experts agree. “When you have a team around the world, you have to know exactly what laws you’re dealing with,”
says Stephen Pickett, a CIO and president of the Society for Information Management.

Here are seven key areas to watch out for.

1. Labor Relations
Lawyers point to labor as one of the thorniest issues facing American executives working in Europe. And if you think only HR execs need to worry, you’re wrong.

A U.S.-based company bought a European counterpart, with plans to replace the European workers with its own. But the workers at the European firm quickly pointed to their legal rights, and in the end, the U.S. company had to hire some and pay off others.

Employee councils, which enjoy particularly strong legislative support in France, Germany and the Netherlands, can come back with support for a plan or questions about it. They can even delay action.

2. Privacy
European laws require much higher levels of data security and privacy, even as they apply to accessing employees’ information.

For example, European privacy laws could prevent an HR official in France from e-mailing salary information to the CEO in London, even though such data-sharing is perfectly acceptable in the U.S.

3. Procurement
Some clauses that are standard in U.S. contracts aren’t much good elsewhere. So the protections built into legal lingo such as “liabilities,” “trade secrets” and “confidential information” don’t necessarily hold up in other countries, even if the words themselves are written into contracts.

4. Documentation
Linguistics is hardly the only thing that can trip up leaders buying globally. Different standards in documenting deals can also be problematic.

Foreign managers weren’t documenting software purchases, which is necessary information for audits and minimize the chances of buying pirated products.

Without that paper trail, you’re lost.

5. Taxes
CIOs can minimize taxes, though, by knowing when purchases can be charged to U.S. headquarters. Consulting services and software used companywide could be bought by the U.S. headquarters even if they are being used at European sites.

6. Legal Systems
Experts say that as outsourcing work to India and developing countries has gained ground in recent years, CIOs have begun to learn a valuable lesson about worldwide legal systems: They aren’t equal.

Many executives aren’t focused on the issue of what legal remedies are available to them.

7. Fractured Worldview
Leaders need to keep in mind that laws and regulations vary from country to country—even in unified areas such as the European Union.

There’s a tendency to think that Europe is a region and it only has one law. But it isn’t. It’s much more a series of individual country laws with some codification. That really surprised even lawyers in the States.

This has led to fractured approaches that continually need adjusting from country to country.

It would be better for organizations to do these things on a global basis versus a regional basis.

3. Bird flu: planning for worst

March 13, 2006
By Denise Dubie & Tim Greene

Inoculate your business
The threat of an avian flu epidemic preventing large numbers of employees from coming to work means corporate IT departments need to figure out now how they will keep workers connected. Some tips:

Screen employees who travel to known outbreak areas before they return to the workplace to avoid spreading infection.

Beef up audio and video conferencing to avoid sending workers to regions where outbreaks have occurred.

Identify workers who may be added to the remote access rolls in the event of an outbreak and make sure they have the gear and authorization they need to work from home.

Estimate the increased load on remote access gear and upgrade accordingly.

Tune help desks so they can deal efficiently with a likely increased workload.

Stage dry runs of procedures that would kick in when there is an outbreak

4. Global Sourcing

Contract Management
March 2006

Cultural Perspectives
Focus on Personal Relationships Low
United Kingdom
United States
Focus on Problems

5. How To Clean Up Costs In Europe
February 2006
By Carolyn Zusi
Nine Ways To Cut Costs When Meeting Overseas, especially In Europe.

1. Use global/international sales offices (GSO/ISO).
Your GSO is a wealth of knowledge because GSOs have an overview and know where value will be found. For example: Say you need a city that has direct flights from the United States and that also offers a four-star hotel at the budgeted room rate of $175. Seems impossible? There are many destinations that would work.

By using these offices you can save yourself and your team time when it comes to contract and addendum negotiations. Time is money!

2. Be clear about what you need.
Make certain you share your budget and guidelines. This will help you screen out the properties that are not a match..

3. Be Flexible.
If you have the luxury of having flexible dates, ask for pricing on each set of dates. The property may have a soft period and you will see price discounts accordingly. Just like domestic hotels, pricing internationally is seasonal.

4. Avoid 24-hour hold.
One question you should always ask yourself is whether you really need 24-hour hold. In most destinations, there is an additional fee applied for 24-hour meeting room rental. There’s a 50/50 chance you will get it anyway, without expense.

5. Ask for the Daily Delegate Package
In Europe, a Daily Delegate Package (day meeting package) is the way to go. Not only are they easier to book than individual meal functions and meeting space, there are definite cost savings when priced out. Keep in mind that 90 percent of the time a full breakfast is included with the room rate. Also, make certain you look at the delegate package in detail to see what is included. And be aware that most countries do not include unlimited beverages and that you most likely won’t find Coke or Diet Coke at a morning break.

6. Negotiate the deposit schedule.
Because there is no way to know what the U.S. dollar exchange rate will do from day to day or month to month, you can always try to negotiate a payment schedule in hopes that the exchange rate will improve. And here’s another option: If your group has an office in the country where you’re planning a meeting, use that office for deposits or to establish billing privileges.

7. Be upfront about commissions.
It’s very important to ask about commissions on food and beverage and on meeting room rental.

8. Ask about the comp policy—most international hotels have one.

9. Ask for VAT (value-added tax) to be included in pricing when requesting for quotes.
Most hotels will provide you with a breakdown. For a fee, several companies will help get part of the VAT back.

6. State Hits The Road With e-Passports

March 6, 2006
By Wilson P. Dizard III

Diplomats travel with RFID technology, despite doubts and a dearth of products.

Amid continued doubts from experts, and with only one approved technology vendor, the State Department is pressing forward with its electronic passport program.

It started issuing e-passports to its diplomatic corps on January 1 and by last week had distributed 299 of them. The department plans to roll out the contactless chip technology for the general public this summer, officials said.

The e-passport rollout represents the culmination of a program that has spawned ongoing disputes over security technology [GCN, May 2, 2005, Page 1] and litigation over procurement of contactfless chips. And disputes about the safety of e-passport technology haven’t dropped off, even with State’s decision to start issuing the new documents.

State’s security measures include a metal shield in the passport cover to help protect against interception of data. In addition, State has adopted Basic Access Control, a means of securing the data transmission between the passport and reader, and “random uniqueness,” a more secure encryption key than the Dutch passport’s.

An ICAO technical committee recently met to consider strengthening the security of the encryption key used to secure data flowing from the passport to the reading device. The committee is considering lengthening the key by including alphanumeric data from the second line of the machine-readable zone of each passport as well as the data from the first line, which is already included.

7. E-Passports Await Real-World Tests

Card Technology
March 2006
By Kevin Woodward

With deadlines looming, governments and vendors around the globe are accelerating their development of electronic passports. A handful of nations are already issuing the new travel documents and a number of others are preparing to do so.

Will passports and readers work together as expected? Will they be secure?

Vendors have had to contend with a new passport specification from the International Civil Aviation Organization, writing operating system software for chips and making chipsets and booklets durable enough to last up to 10 years. Driving some 40 nations forward are two deadlines this year. By October 26, the 27 countries whose citizens now don’t need a visa to enter the United States must begin issuing e-passports.

Before that, the European Union will require its 25 member states to begin issuing e-passports. Many of these EU countries are also in the U.S. Visa Waiver program.

U.S. Delayed?
Ironically, while the United States was the force behind the move to e-passports, it may lag behind other countries in its rollout.

A legal challenge to the U.S. government’s procurement practices has held up the rollout, some say.

Also, a 28% increase in forecasted demand for U.S. passports this year contributed to delays. The State Department issued just over 10 million passports in 2005, but expects to distribute about 13 million this year. Factors contributing to growing demand for passports include a 2007 deadline for U.S. citizens to present passports when traveling to and from Canada, Mexico and the Caribbean.

8. L-1 Visa Abuses

March 27, 2006
By Ephraim Schwartz

The DHS Office of the Inspector General finds significant flaws in the overseas hiring program.

First, some background on what the L-1 visa program is. The program allows a foreign worker employed by a company overseas for at least one year to enter the United States temporarily, “in order to continue to render his services to the same employer or a subsidiary or affiliate… in a capacity that is managerial, executive, or involves specialized knowledge.”

Insurance companies are bringing in foreign workers under L-1, providing food and lodging, but are paying the guest workers at the salary they were getting back home. If a typical programmer in the United States makes $60,000 to $80,000 per year, these workers are being paid as little as one-quarter of that. And they can stay as long as five to seven years.

These workers may be employees of the insurance company; or worse, they could be employees of IT services companies, known as “body shops,” who hire them out for a fee.

Finally, that DHS report I mentioned calls L-1 “The Computer Visa,” saying nine out of ten companies that use the L-1 are “computer-and IT-related,” The report says that it is “difficult to be confident that a firm truly intends using an imported worker” as a manager or executive. It suggests that the term “specialized knowledge” is so broad that “adjudicators believe they have little choice but to approve almost all petitions.” And while L-1 workers must be employed by the importing company abroad for at least a year, the report finds that the United States has “little ability to evaluate the substantiality of the foreign operation” and even allows “ petitioners to transfer themselves into the United States.

9. Mixed Results With Outsourced Call Centers

March 20, 2006
By Andrew Compart and Dennis Schaal

Expedia Corporate Travel recently revealed plans to bring some of its call center functions back to the U.S. from Manila, Philippines, where they had been handled by PeopleSoft. That decision closely followed a move by US Airways Group to hire about 400 reservations agents for positions in North Carolina, Arizona and Nevada to perform work that had been outsourced to call centers in Mexico, Central America and the Philippines.
To deal with service concerns, some companies have outsourced to locations where they believe the centers will be staffed with multilingual, educated and travel-savvy workers who can relate to customers.

U.S. airlines are demonstrating an ambivalent attitude toward off-shore outsourcing.

United, for example, outsourced some of its call center work to India early last year, after already having funneled a small amount to Nova Scotia in March 2004. The outsourced call centers handled general reservations calls and some customer-service inquiries.

But there are some signs, even at United, that airlines are discovering limits to the usefulness of outsourcing.

Though United has closed five U.S. call centers with 800 employees since 2003, it still uses about 2,500 of its own employees at call centers in five U.S. cities for general sales, high-level frequent flyers and other specialty calls.

US Airways is bringing many of its calls back in–house because it found that the outsourced centers often couldn’t handle calls that didn’t follow a script, said Scott Kirby, the airline’s executive vice president for sales and marketing. A customer, for example, might ask for alternative destinations if fares for the one they first asked about are too high. Or they might ask about nuances in airline policy.

“The airline industry,” Kirby said, “tends to go off script.”

That is why, contrary to Ryan’s view of outsourcing across all industries, the US Airways shift may reflect a growing reassessment of the outsourcing trend in the travel sector.

10. Help Wanted

March 2006
By Don Durfee

Several years ago, managers at heavy industrial manufacturer Ingersoll-Rand Co. were looking to hire 60 welders to help build heavy drilling machines in Texas. What they got was a lesson in immigration law. Human-resource managers at the Bermuda-headquartered company scouted the United States for workers, even looking into shipyards to see if they could lure anyone away. But welders aren’t as plentiful as they once were. The Army-trained welders of the baby-boom generation are starting to retire and few are taking their place.

Apparently, lethal electric currents, high temperatures, and toxic gases just aren’t the career draws they used to be.

The company did find one ready source of skilled welders; unfortunately, those welders all lived south of the Rio Grande. The welders in Mexico didn’t qualify for the small number of visas the government reserves for seasonal laborers. They also lacked college degrees, which meant they were not eligible for the H1-B visas that supply Silicon Valley with its legions of Asian and Russian programmers.

Ultimately, Ingersoll-Rand was forced to go with a smaller team to complete the project. Not surprisingly, the company missed its customer’s initial delivery deadline.

A growing number of American employers say that, when it comes to hiring, they’re boxed in: they can’t find the workers they need in the States and, because of immigration laws, they can’t hire enough workers from overseas.

Not surprisingly, groups ranging from the U.S. Chamber of Commerce to the Service Employees International Union and the U.S. Conference of Catholic Bishops adamantly oppose HR 4437, calling it “an unworkable enforcement bill.” Ingersoll-Rand’s Dickson (who also chairs the Chamber of Commerce’s subcommittee on immigration) says the employer penalties proposed in the legislation are particularly egregious, given how hard it is to detect fraudulent documents.

How Legal Are You?
% of unauthorized workers within industry
Hotels 13%
Food Services 10%
Source: Pew Hispanic Center

Here Come the Lawyers
As of press time, it was unclear what sort of immigration reform—if any—will be endorsed by Congress. For her part, Laura Reiff, Greenberg Traurig, LLP, Washington, D.C., is optimistic. “This is the best opportunity I’ve seen for comprehensive immigration reform since 9/11,” she says, citing the support of key Republicans and Democrats, the business community, religious organizations, and part of the labor movement. “The moon and stars seem to be aligning.”

“I don’t think many people in Washington really understand how the global economy works,” laments Elizabeth Dickson, Ingersoll Rand’s Advisor for immigration services “Half of our company’s manufacturing plants are in the United States. But how do you keep manufacturing here if you can’t find the people you need?


SGTP eNews 03/23/06

“GSA, DOD and other Federal Agencies”

Download SGTP eNews 03/23/06 [doc]

SGTP’s EdCon’06, September 6-8
Hilton Alexandria Mark Center

1. GSA Loses `Star Player` To FEMA

Federal Times
March 20, 2006
By Chris Gosier

Deidre Lee, General Services Administration, will leave after an eight-month stint and go to another besieged agency --- the Federal Emergency Management Agency, government and industry sources said.

Lee, considered one of the government’s top acquisition leaders, will become FEMA’s acting deputy director of operations in April, working closely with the chief procurement and financial officers, FEMA said in a March 16 statement.

The announcement was greeted as another blow for GSA, reeling from impending job cuts, plummeting information technology business, a lack of permanent leadership and a stalled reorganization.

At FEMA, Lee will work to reinvigorate disaster response and recovery, FEMA said in a statement.

(editor’s note: Dee is the highly praised recent SGTP keynoter. Our warmest best wishes to her.)

2. Crisis At GSA

Federal Times
March 13, 2006
By Chris Gosier

Agencies take their business elsewhere
After a decade-long stretch of red-hot IT sales at the General Services Administration, other federal agencies started looking elsewhere for IT procurements in 2004. In 2005, for the first time in years, GSA’s IT sales actually declined.

GSA’s information technology business is even more troubled than its chiefs initially let on. Revenues for its niche business of assisting agencies in buying highly customized systems and services --- known as IT solutions --- plummeted nearly $3 billion --- about 40 percent --- in the last two years.

The situation is so bad that leaders have imposed a hiring freeze and are seeking permission to slash 400 jobs.

The tale of how a runaway success story went sour so fast begins with a series of critical government audit reports that faulted GSA for numerous contracting violations. Delays on purchases for the Defense Department, GSA’s biggest customer, cost the Pentagon $2 billion because the authority for that spending expired before GSA could complete the purchases.

“It’s a perfect negative storm going on for GSA at this point,” said Neal Fox, who managed GSA’s $32 billion federal supply schedules program until early last summer. “GSA has picked the exact wrong time to create a crisis of confidence, while at the same time agencies are putting in place their own contracting vehicles.”

Trying to get it right
Today, it appears unclear when the agency will be able to right itself.

GSA’s top official, acting GSA Administrator David Bibb, acknowledges the troubles his agency has had with its biggest customer.

The Pentagon’s move to rely more on in-house contracts is one of the biggest factors behind GSA’s declining revenues.

GSA’s competitors, meanwhile, are seizing the opportunity to steal business away. The Interior Department’s Gov-Works program, for instance, boasts in its new advertising campaign, “We Follow the Rules.”

The Coalition for Government Procurement, which represents GSA vendors, said in a letter to GSA officials that “recapturing lost customers will be a long and sometimes difficult process. Some members believe it will take as long as five years to regain all of the business lost.” In its letter, the group called for a quick
end to “Get It Right.”

Further, the agency is lacking leadership. The top five management posts, including the administrator, are filled by acting managers until permanent replacements are found. And GSA managers are still trying to shake off perceptions that the agency has played fast and loose with procurement rules.

3. GSA Considers Staff Cuts after Drop in IT Sales

Federal Times
March 6, 2006
By Chris Gosier

Get It Right Campaign May Have Slowed Business

A steep drop in its information technology business is prompting the General Services Administration to freeze hiring and consider job cuts, agency officials confirmed.

GSA projects that its revenues this fiscal year from assisted procurements of information technology will amount to $4.3billion --- a 40 percent skid from the $7.2 billion in sales the agency had in 2004.

As a result, GSA has asked the Office of Management and Budget and the Office of Personnel Management for authority to offer employees buyouts or early retirement, in hopes of avoiding layoffs, said Marty Wagner, acting commissioner of GSA’s Federal Acquisition Service.

One union official said he was told in a February 22, 2006 meeting with GSA officials that 400 employees could be affected.

Employees have long been “confused, anxious and scared” about jobs disappearing, said the official, Jack Hanley, president of the National Federation of Federal Employees council of GSA locals.

GSA froze hiring in January for its Federal Technology Service and Federal Acquisition Service (FAS). GSA followed up with a hiring freeze for management and administrative staff at its central office and in the regions, according to an internal memorandum acting GSA Administrator David Bibb sent to staffers on February 24, 2006.

4. GSA To Trim Through Buyouts And Retirements

The Washington Post
March 6, 2006
By Stephen Barr

Faced with declining revenue, the General Services Administration plans to offer cash buyouts and early retirement packages to more than 400 employees.

The staffing reductions will come in Federal Supply Service and the Federal Technology Service, shrinking the workforce in those two bureaus by about 8 percent, said David Bibb, the acting general services administrator.

The GSA buys more than $30 billion of goods and services each year from the private sector and resells them to federal agencies. Much of its operating budget is based on the fees it charges agencies for procurement transactions.

The GSA also has been losing revenue because a number of non-defense agencies have less money to spend on goods and services, Bibb said.

5. GSA Audits Bring Work For Md. Firm

Washington Business Journal
February 17-23, 2006
By Ben Hammer
Staff Reporter

A sharp uptick in GSA audits of multiyear government contracts is driving many companies to hire accounting firms for advice.

The GSA has increased its review of contracts up for renewal, from 14 pre-award audits in fiscal 2003 to 40 in 2004 to a goal of about 70 in 2005. Rockville accounting firm Aronson & Co. saw its first client looking for help to prepare for GSA audit 18 months ago --- and has worked with 15 companies in a similar situation since then. The firm expects that number to double in 2006.

6. Senator: End Travel As Costly `Spring Break`

Federal Times
February 20, 2006

Spending on federal conferences increased 70 percent between fiscal 2000 and fiscal 2005, an astounding increase that shows agencies aren’t doing enough to rein in excess spending and take advantage of technology improvements, Sen. Tom Coburn, R-Okla., said.

During a February 7, 2006 subcommittee hearing, Coburn said agencies spent more than $1.4 billion since 2000 to either send employees to conferences or underwrite conferences. Most agencies were unable to fully report on their conference spending and participation, prompting Coburn to suggest that agencies post online their meeting and travel expenses.

(Editors observations: Since the Senator’s FY 2000 base period, the U.S. has had to organize and implement group efforts for 9/11, Afghanistan, Iraq, Katrina and many other programs. These can’t be considered as a ‘Spring Break’ by anyone.)

7. Government Smart-Card Project Hits Snags

The Washington Post
March 7, 2006
By Stephen Barr

The government’s smart-card project appears at risk of falling behind schedule.

Federal agencies are supposed to begin issuing government-wide identification cards that can vouch for the identity of federal employees and most contractors in October 2006, but the Government Accountability Office warns that setting up and testing new ID systems may not be completed within deadlines set by the Bush administration.

The GAO reviewed the progress of six agencies in developing smart-card systems and found differences in implementation plans, which could hamper efforts to create a government-wide ID card accepted by all agencies. The congressional watchdog agency also found a lack of reliable information about the costs of buying cards and equipment and modifying software systems.

8. QDR Lays Out Strategy, But Can We Afford It?

National Defense
March 2006
By Lawrence P. Farrell Jr.

At first glance, the fiscal year 2007 defense budget reflects the arduous challenges facing the administration in trying to balance long-term strategy and requirements against immediate priorities and fiscal pressures.

On the one hand, the $439.3 billion budget provides a healthy level of resources in key areas, such as personnel, procurement, research and development, and force readiness.

On the other, the spending plan leaves unanswered serious questions about how the Defense Department will fund the ambitious strategy laid out in the Quadrennial Defense Review, which the administration released as a companion document to the fiscal 2007 budget.

One key to understanding where this might go is to watch the supplemental appropriations process, Army and Marine Corps progress in resetting and recapitalizing their equipment, the Army modularity efforts, and the Air Force’s success with reducing its blue-suit force from 379,000 to 339,000. All this will play out over several years and will be instructive in assessing the success of QDR implementation.

9. BRAC Off, Man

Washington Business Journal
February 17-23, 2006
By Joe Coombs

Don’t call the moving vans just yet.

The seismic shift in military jobs associated with the Base Realignment and Closure process is supposed to start sometime this year. But the Pentagon still hasn’t nailed down the logistics, and some of the jobs slated to move --- including about 18,000 set to shuttle out of Arlington --- might be hanging around a little longer in their current locales.

One Department of Defense agency slotted for relocation just renewed a lease for five years and 300,000 square feet at the Presidential Tower office complex in Crystal City. The defense agency also negotiated a five-year option for renewal when the lease expires.

Since the BRAC moves became official in November, the Pentagon’s goal was to produce a comprehensive relocation plan by the end of this month, says Glen Flood, a DoD spoksman. But the sheer size of the realignment --- there are 241 implementation plans that will affect more than 800 bases and related operations around the country --- has stretched out the process. “Each branch of service is doing all they can do at this point to submit their plans,” Flood says.

Until then, commercial landlords can probably breath a little easier.

10. Defense Department Reconsiders Senior-Level Career Development

The Washington Post
March 15, 2006
By Stephen Barr

The Defense Department is taking a fresh look at its senior-level professionals to see how to reshape their career development for future challenges, including terrorism.

“One of my major goals right now is about creating a world-class leadership structure for the department,” said Patricia S. Bradshaw, the new deputy undersecretary of defense for civilian personnel policy.

SES stands for Senior Executive Service, the elite cadre of top civil service managers in the government. There are more than 6,200 career members of the SES, and about 1,300 of them have been allocated to the Defense Department. The department has an additional 176 senior-level professionals, technicians, scientists and engineers who bring special expertise to weapons and other national security programs.

11. How To Know When You’re In Too Deep With The Feds

Washington Business Journal
March 10-16, 2006
By John W. Chierichella

Organizational conflicts of interest (OCI) arise out of the confluence of corporate relationships and the performance of government contracts.

OCI can affect a firm’s eligibility for a wide range of contract awards, force you to outsource tasks under some contracts, affect your choice of teaming partners and limit your ability to allocate personnel within your organization. A failure to address OCI when evaluating takeover candidates can unexpectedly wreak havoc on your core business.

Back when the Armed Services Procurement Regulations governed the administration of military contracts, OCIs were much more manageable. Such conflicts were addressed there and the regulations made it clear that rules were not “self-executing.”

Contractors could never be “surprised” by an OCI that had been created by a prior contract. Unless that prior contract specifically advised you of the conflict and of your exclusion from future contracts, future contracts were “fair game.”

No more. Today, the burden is on the contractor to identify such conflicts and persuade the contracting officer that they can be adequately avoided and mitigated.

12. Volume, Visibility, Not Cash, Fuel Small Biz Lobbyists

Washington Business Journal
January 13-19, 2006
By Kent Hoover

New restrictions on lobbying are likely in the wake of the Jack Abramoff scandal, but small business lobbyists say these reforms won’t have much effect on what they do.

They don’t have the money to lavish gifts on lawmakers, like Abramoff’s golf
outings to historic St. Andrews course. or to wine and dine them in restaurants or arena skyboxes.

Instead, small businesses have something more powerful: numbers and visibility. Members of Congress know how important the nation’s 23 million small businesses are to the economy, and see small business owners daily when they’re back in their districts.

When politicians “get 1,000 letters from small business, you better believe they’re going to stand up and listen,” says Giovanni Coratolo, director of small business policy for the U.S. Chamber of Commerce. “You can’t hire somebody to be a substitute for that passion.”


SGTP eNews 03/21/06

“Federal Budget and Related Priorities”
(Welcome back after SGTP’s AnCon’06!)

Download SGTP eNews 03/21/06 [doc]

SGTP’s EdCon’06, September 6-8
Hilton Alexandria Mark Center

1. Smallest Work Force Since ‘04

Federal Times February 13, 2006
By Mollie Ziegler
And Tim Kauffman

Fewer Feds
The Budget proposes the largest percentage increase in civilian staffing in 2007 for the Homeland Security Department, while overall civilian staffing throughout government would decline:

(Full-time equivalent Percent change
positions in thousands) from 2006
2007 estimate

Homeland Security 150.3 +2.5%
Commerce 38.2 2.1
Energy 15.9 1.3
Health and Human Services 62.0 1.1
Transportation 55.9 0.9
State 30.5 0.7
Labor 16.9 0.6
Veterans Affairs 223.3 0.2
Education 4.3 0.0
Defense 663.6 -0.5
Interior 69.8 -0.6
Justice 117.6 -0.8
Agriculture 99.1 -1.0
Treasury 110.3 -2.0
Housing and Urban Development 9.4 -4.1

Executive Branch total* 1,867.7 -0.3
*Totals may not add due to rounding
SOURCE: Office of Management

2. Ratings by Agency

Federal Times February 13, 2006

The top five agencies whose programs did not demonstrate results, were rated effective, or were rated ineffective: *

Agency (programs evaluated)
National Science Foundation (10)
State (39)
Treasury (25)
Defense (32)
Energy (50)
Ineffective Programs  
Housing and Urban Development (25)
Labor (28)
Environmental Protection Agency (43)
Education (74)
Health and Human Services (90)
No Results Demonstrated  
Education (74)
General Services Administration (13)
Interior (63)
Homeland Security (45)
Housing and Urban Development (25)

*Only agencies that had 10 or more programs rated are included.
SOURCE: Office of Management and Budget

Security First
President Bush’s 2007 budget projects increases in future discretionary spending
on homeland security and national security programs and cuts for other programs;

In billions

Change 2005-2011
Homeland Security

SOURCE: Office of Management and Budget

3. Agency Highlights

Federal Times
February 13, 2006

The Agriculture Department’s proposed $3 billion in spending cuts in fiscal 2007 reflect an era of fiscal belt-tightening, says secretary Mike Johanns.

“These proposals are made in the spirit that everybody needs to contribute to deficit reduction,” he said at a budget briefing February 6.

The proposed $236 million cut in discretionary budget authority at the Commerce Department is reflected in cuts to several programs it says have outlived their usefulness.

For example, the administration is repeating its bid to eliminate the Advanced Technology Program, which provides grants to businesses to develop technologies for commercial use.

The Bush administration is seeking a 6.9 percent increase in the Defense Department’s discretionary budget in fiscal 2007. A key winner in the budget is the department’s Special Operations Command, an elite force designed to fight terrorism on a targeted and global scale. More than 2,000 Marines would be shifted to the command in fiscal 2007, in addition to thousands of new Rangers, Seals and other personnel with various specialties.

Defense plans to convert more than 10,000 military positions to civil service or contract positions in fiscal 2007, bringing the total number of converted military positions to more than 30,000 since 2004.

The Education Department suffered some of the deepest cuts in the president’s fiscal 2007 budget proposal. Most of the savings would be satisfied by the elimination of 42 programs including: Alcohol Abuse Reduction, Arts in Education, Demonstration Projects for Students with Disabilities, Even Start and the National Writing Project.

The Energy Department plans to steer more funding to researching nuclear power and other renewable energy sources.

The Environmental Protection Agency proposes increased spending on homeland security and toward clean air and combating global warming.

The General Services Administration will try again to bolster its electronic government fund to a level that Congress turned down for fiscal 2006.

GSA is requesting $5 million in fiscal 2007 to improve online access to agency information, up from the $3 million appropriated this year.

In addition, GSA is again asking Congress for permission to use more GSA-generated revenues to fund e-government. The agency wants authority to use up to $40 million----once it meets operating costs----out of its Acquisition Services Fund, which would be created through the pending merger of its General Supply and Information Technology funds.

The budget proposal for the Health and Human Services Department increases funding $58 billion, or about 9 percent from fiscal 2006, to cover predicted increases in mandatory spending for entitlements like Medicare, Medicaid and state children’s health insurance.

Homeland Security
The White House’s proposed fiscal 2007 budget continues the Homeland Security Department’s emphases on border security. Customs and Border Protection would add 1,500 Border Patrol agents, a 12 percent increase over 2006.

The Housing and Urban Development Department’s $33.6 billion discretionary budget for fiscal 2007 is a decrease of 2 percent from fiscal 2006. Much of the decrease comes from a proposed overhaul of the Community Development Block Grant Program.

The Interior Department’s discretionary budget request is 6 percent below what Congress authorized for fiscal 2006.

Much of the savings is generated by delaying bureau construction projects. Construction budgets are cut 46 percent at the Bureau of Land Management, 56 percent at the Fish and Wildlife Service, 27 percent at the National Park Service and 21 percent at the Bureau of Indian Affairs.

The bulk of the requested $540 million funding increase for the Judiciary in fiscal 2007 is needed to maintain services it now provides. Of that amount, $462 million would pay for inflation, mandatory salary increases, rent and other unavoidable cost increases.

But in past years, Congress has frequently cut the Judiciary’s budget requests beyond what the courts say is the minimum needed to maintain services. Court officials say such under-funding hurts training and security, and jeopardizes public safety because probation officers and other employees are stretched too thin.

While past budgets proposed staffing increases, the Justice Department’s fiscal 2007 budget shows a focus on building an infrastructure for counterterrorism efforts. Justice proposes creating a new national security branch that will serve as the focal point for counterterrorism and counterintelligence efforts.

Overall discretionary budget authority decreases as does staffing---from 116,000 full-time equivalents in fiscal 2006 to 115,000 fulltime equivalents in 2007.

The proposed fiscal 2007 budget for the Labor Department includes additional funds to assist agencies charged with protecting workers’ health and safety.

The Mine Safety and Health Administration, which saw a decrease of $3 million from 2005 to 2006, would get a $10 million increase under the new budget proposal.

Legislative Branch
The 2007 budget for the Legislative Branch proposes increases in discretionary funding and no substantial cuts.

Senate office buildings would get the largest bump with $111 million, nearly double the amount appropriated this year, and the Architect of the Capitol’s budget would increase from $76 to $103 million.

The Government Accountability Office, Congressional Budget Office and Library of Congress would also see increases for fiscal 2007.

The 2007 budget for the Office of Personnel Management proposes $26.7 million for its retirement systems modernization project. The funding would go toward hiring contractors to convert the paper personnel records of more than 1 million active and former employees and installing new technology that will allow agencies and employees to access retirement records online.

The Social Security Administration seeks a 4 percent increase in its administrative budget for fiscal 2007 to cover increases in employee salaries, postage, rent, electricity and other fixed costs. The agency’s administrative expenses amount to less than 2 percent of the $626 billion in Social Security, supplemental security income and other financial assistance programs managed by the agency.

Many of the State Department’s budgetary priorities are guided by efforts to rebuild Iraq and Afghanistan, as well as the broader war on terrorism.

Most of the additional funds in the Transportation Department’s discretionary budget for fiscal 2007 will go to the highway and aviation trust funds for highway construction and capital improvements to airports. Full-time equivalent positions for the department will increase by 451 over this year’s staffing levels to 55,885 full-time equivalents.

The Federal Aviation Administration budget includes $18 million to hire and train 1,136 air traffic controllers to replace those who are retiring, resulting in a net gain of 132 controllers.

The Treasury Department aims to reduce staffing by 3,000 jobs in 2007 --- from 113,000 full-time equivalent positions this year to 110,000. While some offices are increasing staffing, the IRS and U.S. Mint will absorb most of the cuts. Realigning IRS offices will cut 1,000 FTEs while program efficiencies such as eliminating duplicative overhead costs, automating taxpayer assistance and centralized monitoring of cases, will cut 2,100 jobs. IRS’ overall budget of $10.6 billion is an increase of $18 million over fiscal 2006.

Increases in the Veterans Affairs Department’s fiscal 2007 budget proposal are primarily targeted for health care and disability compensation, according to Secretary James Nicholson.

The 11 percent increase for health care --- the largest yearly increase ever requested by a president, according to Nicholson --- will enable VA to care for an estimated 5.3 million patients, including more than 100,000 veterans of Operation Iraqi Freedom and Operation Enduring Freedom in Afghanistan.

4. Budget Gets Chilly Reception on Hill

Federal Times
February 13, 2006
By Aimee Curl

The president’s budget isn’t usually greeted with widespread enthusiasm on Capital Hill, but the fiscal 2007 proposal is getting a frostier reception than usual.

And it’s not just the Democrats. Republicans are notably distancing themselves from the budget, released February 6. The majority party made no flashy announcements to tout the proposal, and individual members offered only lukewarm statements of support.

Finance Committee Chairman Sen. Charles Grassley, R-Iowa, began his reaction with the basics, a sort of backing-in approach.

“The president’s budget always sets off a good debate on Capitol Hill,” he said in a prepared statement. “I appreciate President Bush’s effort to outline his priorities.”

Grassley went on to offer support for making tax cuts permanent, while cautioning that it may not be the time for additional reductions in Medicare.

5. Budget Puts IT on New Course

Government Computer News
February 20, 2006
By Jason Miller

2007 proposal reflects OMB’s emphasis on blending tech into business processes
The message about IT the Bush administration sent with the fiscal 2007 budget request earlier this month reiterated its annual theme: Get results from the billions of dollars agencies spend on technology.

But the subtext, which also should become clear to agencies over the next year, is the importance of shifting from a focus on applications, systems or even technology to how IT is becoming a part of overall business process—just like acquisition, finance and human resources.

6. How Bush’s Budget Affects Your Taxes

The Wall Street Journal
February 7, 2006
By Tom Herman

President Bush’s new budget includes several proposals that would affect individual taxpayers and investors.

Applying a `patch` that would shield millions of Americans from paying the alternative minimum tax for one year.

Making permanent several existing tax cuts, including capital gains and dividends.

Permanently repealing the estate tax.

Creating simpler savings vehicles to replace the current hodgepodge of instruments.