Federal Vehicle Fleets:
Adopting Leading Practices Could Improve Management
GAO-13-659: Published: Jul 31, 2013. Publicly Released: Jul 31, 2013.
What GAO Found
GAO identified three leading practices for fleet management and found that selected federal agencies--the Departments of Agriculture (USDA), Homeland Security (DHS), the Interior (Interior), and Veterans Affairs (VA); the U.S. Air Force (Air Force); and the Army Corps of Engineers (Army Corps)--follow these practices to varying degrees. These practices are 1) maintaining a well-designed fleet-management information system (FMIS), 2) analyzing life-cycle costs to inform investment decisions, and 3) optimizing fleet size and composition. GAO identified these practices based on views provided by recognized fleet experts and determined that the practices align with legal requirements and General Services Administration (GSA) recommendations.
- None of the agencies GAO reviewed capture in their FMISs all of the data elements recommended by GSA. The types of data missing most frequently are data on fleet costs, including indirect costs, such as salaries of personnel with fleet-related duties. Also, some of these systems are not integrated with other key agency systems. As a result, fleet managers face challenges in performing analyses that can guide fleet decisions. All of these agencies are making efforts to improve their data and FMISs, but some lack an approach for estimating indirect fleet costs. GSA's guidance does not discuss how to estimate these costs.
- Most of the selected agencies are not fully analyzing life-cycle costs to make decisions about when to replace vehicles. In addition, although most of the selected agencies use life-cycle cost analyses to decide whether to lease or purchase vehicles, some agencies' analyses do not consider a full set of costs. As a result, agencies may not have full information with which to make vehicle replacement and procurement decisions. Officials mainly cited problems with their cost data and FMISs as contributing factors, and efforts to improve in these areas have the potential to enhance agencies' ability to conduct these types of analyses.
- In response to the President's 2011 directive and related GSA guidance, the selected agencies have set targets for achieving optimal fleet size and composition. Planned changes in fleet sizes from 2011 to 2015 range from DHS's 15 percent fleet reduction to VA's 8 percent increase. GSA reviewed agencies' initial targets in 2012 and recommended some changes, but lacked supporting documentation to explain how most agencies produced their targets. GSA's lack of information on these methods limits its ability to oversee agencies' fleet optimization efforts and help agencies ensure that their fleets are the right size and composition to meet their missions cost-effectively.
In addition to data-related challenges, agency officials identified three broad fleet management challenges: meeting energy requirements, such as requirements for acquiring alternative fuel vehicles; uncertainty regarding the allocation of funding to fleet management activities; and ensuring that fleet managers have adequate expertise. Agencies have pursued or are pursuing a variety of strategies to address these challenges. These include the fleet optimization process, which calls for agencies to determine how best to fulfill requirements for alternative fuel vehicles; using a working capital fund, which provides a steady stream of funding; and providing online training for fleet managers.
Why GAO Did This Study
Federal agencies (excluding the U.S. Postal Service) spend about $3 billion annually to acquire, operate, and maintain about 450,000 civilian and non-tactical military vehicles. Agencies may lease or buy vehicles from GSA, which also issues requirements and guidance on fleet management. In recent years, Congress and the President have raised concerns about the size and cost of federal agencies' fleets. In 2011, the President directed agencies to determine their optimal fleet inventories and set targets for achieving these inventories by 2015 with the goal of a more cost-effective fleet.
GAO was asked to review agency efforts to reduce fleet costs. This report addresses (1) the extent to which selected federal agencies use leading practices to manage their fleets, including their sizes and costs, and (2) any challenges these agencies face in managing their fleets and strategies they use to address these challenges. GAO selected USDA, DHS, Interior, VA, Air Force, and the Army Corps for review based on factors such as fleet size, fleet composition, and changes in fleet size from 2005 to 2011. To identify leading practices, GAO interviewed recognized private sector and government fleet management experts and GSA officials.
What GAO Recommends
GAO recommends that the Administrator of GSA 1) develop and publish guidance for agencies on estimating indirect fleet costs and 2) request that agencies provide supporting documentation on their methods for determining their optimal fleet inventories. GSA agreed with the recommendations.
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Recommendations for Executive Action
Status: Closed - Implemented
Comments: In 2013, GAO identified three leading practices for fleet management and found that selected federal agencies follow these practices to varying degrees. One practice was maintaining a well-designed fleet-management information system (FMIS). None of the agencies GAO reviewed capture in their FMISs all of the data elements recommended by General Services Administration (GSA). The types of data missing most frequently are data on fleet costs, including indirect costs, such as salaries of personnel with fleet-related duties. With regard to indirect costs, eight of the nine agencies with FMISs that GAO reviewed reported that their FMISs do not capture all indirect fleet costs, or that the indirect costs cannot be readily discerned from other non-fleet costs. GSA defines indirect costs as any cost that cannot be ascribed to a particular vehicle or class of vehicles. All of these agencies are making efforts to improve their data and FMISs, but some lack an approach for estimating indirect fleet costs. GSA's current guidance on FMISs does not discuss how agencies can determine indirect costs. Providing additional guidance to agencies on a method to estimate indirect fleet costs for owned vehicles would be one step toward improving the overall quality of fleet data for agency decision making. Therefore, GAO recommended that GSA develop and publish guidance for agencies on estimating indirect costs attributable to fleet management. In February 2014, GSA developed and published such guidance in Bulletin B-38, Indirect Costs of Motor Vehicle Fleet Operations. The bulletin provides guidance to executive agencies about estimating, identifying, categorizing, and reporting the indirect costs of operating a fleet of motor vehicles. As a result, the agencies now have the necessary guidance to help them ensure that they have complete and accurate cost data.
Recommendation: To help improve fleet management, the Administrator of GSA should develop and publish guidance for agencies on estimating indirect costs attributable to fleet management to help ensure that agencies have complete and accurate cost data.
Agency Affected: General Services Administration
Status: Closed - Implemented
Comments: In 2013, GAO reported that optimizing fleet size and composition is a leading practice for managing federal agency fleets. In a May 2011 memorandum, the President directed each federal agency to determine its optimal fleet inventory, including number and types of vehicles needed, using a methodology which emphasizes eliminating unnecessary vehicles and ensuring fleet vehicle composition is based on meeting agency missions. The General Services Administration (GSA) subsequently issued guidance to agencies on a methodology to follow in determining their optimal fleet inventories. While the ten agencies GAO examined set targets and developed plans for achieving their optimal fleet inventories by 2015 and most of them made progress in 2012 toward these targets, some may not be fully following GSA's recommended methodology for determining their optimal fleet inventories. The President's memorandum did not specify that agencies should provide this information to GSA and GSA has not requested this information. However, GSA plays an important role in providing guidance to federal agencies on managing their fleets effectively and, without information on methods agencies used to produce their optimal fleet size and composition targets, its ability to determine if the basis for agencies' targets is sound, if changes in these targets are appropriate, and if improvements in agencies' methods are needed is limited. Therefore, GAO recommended that GSA request that agencies provide GSA information and supporting documentation on the methods that they used to produce their fleet optimization targets. In 2014, GAO confirmed that GSA made this request to the agencies. Specifically, GSA provided the agencies with a template containing questions that they must address when submitting their updated fleet optimization plans and targets in March 2014. GSA believes this information will (1) provide additional insight into the determinations that the agencies made to best optimize their fleet inventories and (2) be very useful to GSA in providing future guidance and assistance to agencies regarding these determinations. With this information, GSA can provide the oversight necessary to identify changes in fleets that can reduce costs, based on appropriate methods.
Recommendation: To help improve fleet management, the Administrator of GSA should request that when agencies submit their annual updates on their fleet optimization targets, they provide GSA information and supporting documentation on the methods that they used to produce their targets.
Agency Affected: General Services Administration