Federal Acquisition:

Increased Attention to Vehicle Fleets Could Result in Savings

GAO-04-664: Published: May 25, 2004. Publicly Released: Jul 12, 2004.

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Federal agencies spend about $1.7 billion annually to operate a fleet of about 387,000 vehicles. During the last decade, concerns have been raised about whether agencies have more vehicles than they need. In an April 2002 letter to federal agencies, the Office of Management and Budget stated that the size of the federal fleet seemed excessive. GAO was asked to determine (1) the extent to which agencies ensure that their fleets are the right size to meet agency missions, (2) whether potential savings could result from the disposal of unneeded vehicles, and (3) what actions are being taken on a governmentwide basis to improve fleet management practices. GAO focused its review on the justification for acquiring and retaining vehicles at the Departments of Agriculture, Army, Homeland Security, Navy, and Veterans Affairs.

Because of a lack of attention to key vehicle fleet management practices, the agencies GAO reviewed cannot ensure their fleets are the right size or composition to meet their missions. Industry practices for cost-efficient fleets include the development of utilization criteria related to the mission of a vehicle and periodic fleet assessments using these criteria to determine the appropriate fleet size and composition. If unneeded vehicles are identified, they are disposed of. However, the agencies GAO reviewed have not established policies that contain clearly defined utilization criteria that would allow them to determine the number and type of vehicles they need. Further, agencies are not routinely conducting periodic fleet assessments. Two agencies, the Navy and the Forest Service within the Department of Agriculture, conduct assessments; however, these assessments are either inconsistently applied or the results are not enforced. Some agencies have begun to recognize the need to revise their guidelines to provide better criteria for determining their vehicle needs. GAO's work and reviews by inspectors general identified numerous instances where agencies were retaining vehicles they did not need, with potential savings ranging from thousands to millions of dollars if these vehicles were eliminated. For example, the Department of the Interior's Inspector General reported that a significant portion of the department's 36,000 vehicles were underutilized and estimated savings of $34 million annually if these vehicles were disposed of. GSA's Office of Governmentwide Policy and the Office of Management and Budget have recently taken a number of actions to require agencies to better manage and improve the cost-efficiency of their fleets. The Office of Governmentwide Policy is currently revising the Federal Management Regulation to require agencies to (1) appoint a central fleet manager with control over all aspects of fleet management, including fleet budgets, which are now generally controlled at the local level; (2) establish utilization criteria and periodically review fleet size; and (3) fund a fleet management information system. The Office of Governmentwide Policy plans to work in a cooperative effort with agencies to implement the revised regulation. However, based on discussions with officials from the agencies GAO reviewed, GAO anticipates that GSA will face opposition to its requirement for centralized budget control over the fleets. In 2002, the Office of Management and Budget began requiring agencies to report, as part of their budget submissions, the size, composition, and cost of their fleets for the current year and to project costs for the next 3 fiscal years.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: GSA agreed with the recommendation. Based on information received in August 2005, GSA developed a five step action plan to address recommendations, but has only completed step #1 at this time. GSA provided documentation for this action step. The scheduled completion date for the next action steps is October 1, 2005. After an additional request for information in May 2006, a GSA representative provided follow up information on a final rule, changing the Federal Management Regulations to include a requirement to have a vehicle management information system. In the proposed rule, GSA recognized that effectively managed fleets have an established methodology for allocating vehicles based on agency mission, staffing levels and job descriptions, but the final rule only discussed the agency's lack of internal performance metrics to ensure their fleets were operating at their optimal performance level. The final rule, therefore, did not address our recommendation to develop utilization criteria related to the vehicles' missions.

    Recommendation: To help agencies determine the appropriate size and composition of their fleets, the Administrator of GSA should direct the Office of Governmentwide Policy to include in the revised Federal Management Regulation requirements for agencies to develop utilization criteria related to the missions of the vehicles.

    Agency Affected: General Services Administration

  2. Status: Closed - Implemented

    Comments: Checked with GSA contact on August 24, 2005. GSA developed a five step action plan to address recommendations, but has only completed step #1 at this time. GSA provided documentation for this action step. The scheduled completion date for the next action steps is October 1, 2005. On May 23, 2006, GSA provided a copy of a draft Circular A-136, which requires agencies to report fleet information to GSA and for GSA, in turn, to conduct annual reviews of the management of portions of the fleet so that the entire federal fleet will be reviewed every four years. GSA must then annually report to OMB on the status of the management of the executive branch. In addition, they revised their Federal Management Regulations to include a requirement to annually report on fleet operations and to have a compatible fleet management information system that identifies and collects accurate inventory, cost, and use data.

    Recommendation: To help agencies determine the appropriate size and composition of their fleets, the Administrator of GSA should direct the Office of Governmentwide Policy to include in the revised Federal Management Regulation requirements for agencies to conduct periodic assessments of the number and type of vehicles in their fleets using these criteria.

    Agency Affected: General Services Administration

  3. Status: Closed - Implemented

    Comments: OMB agreed with the recommendation. An OMB official provided OMB's narrative requirement for agency reporting, which includes questions about how requirements for vehicles are reviewed and adjusted periodically, how agencies ensure that numbers and types of vehicles are matched to mission requirements, and whether reviews of vehicle fleets are a regular part of management oversight. The actions are adequate to consider the recommendation implemented.

    Recommendation: To bring further attention to the potential budget impact of retaining excessive vehicles, the Director of OMB should require agencies, as part of the new reporting requirement in their budget submissions, to report on (1) the criteria they used to determine the need for vehicles and (2) the results of fleet assessments they have conducted.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  4. Status: Closed - Not Implemented

    Comments: Veterans Affairs agreed with the recommendation. However, after multiple unsuccessful attempts to obtain documentation, we are closing the recommendation.

    Recommendation: To ensure that agency fleets are the right size and composition to meet their missions, the Secretaries of the Departments of Agriculture, Defense, Homeland Security, and Veterans Affairs should establish guidance and policies that include clearly defined utilization criteria to be used in validating the need for vehicles based on their missions.

    Agency Affected: Department of Homeland Security: Directorate of Management

  5. Status: Closed - Not Implemented

    Comments: Since GSA did not promulgate new policy that would require agencies to develop utilization criteria (only a bulletin), USDA never issued policy on utilization criteria at the headquarters level for all USDA agencies to follow. USDA's position is that its individual agencies should develop their own criteria to meet mission requirements and, of the 3 agencies included in our report, 2 do have such criteria. The Forest Service does not; however, it does not use appropriated funds.

    Recommendation: To ensure that agency fleets are the right size and composition to meet their missions, the Secretaries of the Departments of Agriculture, Defense, Homeland Security, and Veterans Affairs should establish guidance and policies that include clearly defined utilization criteria to be used in validating the need for vehicles based on their missions.

    Agency Affected: Department of Defense

  6. Status: Closed - Not Implemented

    Comments: DHS agreed with the recommendation. However, after multiple unsuccessful attempts to obtain documentation, we are closing the recommendation.

    Recommendation: To ensure that agency fleets are the right size and composition to meet their missions, the Secretaries of the Departments of Agriculture, Defense, Homeland Security, and Veterans Affairs should establish guidance and policies that include clearly defined utilization criteria to be used in validating the need for vehicles based on their missions.

    Agency Affected: Department of Veterans Affairs

  7. Status: Closed - Implemented

    Comments: DOD agreed with the recommendation. Updated regulation DOD 4500.36-R, "Management, Acquisition, and Use of Motor Vehicles" addresses the recommendation.

    Recommendation: To ensure that agency fleets are the right size and composition to meet their missions, the Secretaries of the Departments of Agriculture, Defense, Homeland Security, and Veterans Affairs should establish guidance and policies that include clearly defined utilization criteria to be used in validating the need for vehicles based on their missions.

    Agency Affected: Department of Agriculture

  8. Status: Closed - Implemented

    Comments: DOD agreed with the recommendation. AF policy promulgated in AFI 24-302, revised Feb 1, 2005. March 2007 issuance of DOD 4500.36R, "Management, Acquisition, and Use of Motor Vehicles," addresses the recommendation.

    Recommendation: To ensure that agency fleets are the right size and composition to meet their missions, the Secretaries of the Departments of Agriculture, Defense, Homeland Security, and Veterans Affairs should require fleet managers to use these criteria in determining the need for vehicles and in conducting periodic fleet assessments.

    Agency Affected: Department of Defense

  9. Status: Closed - Not Implemented

    Comments: Since GSA did not promulgate new policy that would require agencies to develop utilization criteria (only a bulletin), USDA never issued policy on utilization criteria at the headquarters level for all USDA agencies to follow. USDA's position is that its individual agencies should develop their own criteria to meet mission requirements and, of the 3 agencies included in our report, 2 do have such criteria. The Forest Service does not; however, it does not use appropriated funds.

    Recommendation: To ensure that agency fleets are the right size and composition to meet their missions, the Secretaries of the Departments of Agriculture, Defense, Homeland Security, and Veterans Affairs should require fleet managers to use these criteria in determining the need for vehicles and in conducting periodic fleet assessments.

    Agency Affected: General Services Administration

  10. Status: Closed - Not Implemented

    Comments: DHS agreed with the recommendation, However, after multiple unsuccessful attempts to obtain documentation, we are closing the recommendation.

    Recommendation: To ensure that agency fleets are the right size and composition to meet their missions, the Secretaries of the Departments of Agriculture, Defense, Homeland Security, and Veterans Affairs should require fleet managers to use these criteria in determining the need for vehicles and in conducting periodic fleet assessments.

    Agency Affected: General Services Administration

  11. Status: Closed - Not Implemented

    Comments: Veterans Affairs agreed with the recommendation. However, after multiple unsuccessful attempts to obtain documentation, we are closing the recommendation.

    Recommendation: To ensure that agency fleets are the right size and composition to meet their missions, the Secretaries of the Departments of Agriculture, Defense, Homeland Security, and Veterans Affairs should require fleet managers to use these criteria in determining the need for vehicles and in conducting periodic fleet assessments.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  12. Status: Closed - Not Implemented

    Comments: DHS agreed with the recommendation. However, after multiple unsuccessful attempts to obtain documentation, we are closing the recommendation.

    Recommendation: To ensure that agency fleets are the right size and composition to meet their missions, the Secretaries of the Departments of Agriculture, Defense, Homeland Security, and Veterans Affairs should establish effective oversight mechanisms to ensure that the utilization criteria are defined and fleet assessments are carried out.

    Agency Affected: Department of Agriculture

  13. Status: Closed - Implemented

    Comments: DOD agreed with the recommendation. March 2007 revisions to DOD 4500.36R, "Management, Acquisition, and Use of Motor Vehicles," highlight need for oversight. OSD AT&L believes the best method of ensuring compliance is to allow the DOD components the authority to control their own fleets and manage their vehicle funding requirements. Given the new emphasis in the revised regulation, there is adequate evidence to close the recommendation.

    Recommendation: To ensure that agency fleets are the right size and composition to meet their missions, the Secretaries of the Departments of Agriculture, Defense, Homeland Security, and Veterans Affairs should establish effective oversight mechanisms to ensure that the utilization criteria are defined and fleet assessments are carried out.

    Agency Affected: Department of Veterans Affairs

  14. Status: Closed - Not Implemented

    Comments: Veterans Affairs agreed with the recommendation. However, after multiple unsuccessful attempts to obtain documentation, we are closing the recommendation.

    Recommendation: To ensure that agency fleets are the right size and composition to meet their missions, the Secretaries of the Departments of Agriculture, Defense, Homeland Security, and Veterans Affairs should establish effective oversight mechanisms to ensure that the utilization criteria are defined and fleet assessments are carried out.

    Agency Affected: Department of Defense

  15. Status: Closed - Implemented

    Comments: Managers within each specific USDA component are responsible for determining what transportation is needed and to conduct periodic assessments. Headquarters will do periodic assessments, funds permitting, and will continue working with the agencies at USDA quarterly fleet meetings to encourage periodic oversight reviews of the fleets.

    Recommendation: To ensure that agency fleets are the right size and composition to meet their missions, the Secretaries of the Departments of Agriculture, Defense, Homeland Security, and Veterans Affairs should establish effective oversight mechanisms to ensure that the utilization criteria are defined and fleet assessments are carried out.

    Agency Affected: Department of Agriculture

 

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