DoD suddenly abandons $374 million plan to replace Defense Travel System

The Pentagon has cancelled its replacement for the Defense Travel System (DTS) after five years of development and tens of millions of dollars in spending. The ...

Editor’s note: This story was updated on June 2, 2022 at 3:50 p.m. EDT to incorporate comments from a Pentagon spokeswoman explaining the decision to cancel the MyTravel program.

The Defense Department has abruptly cancelled the new travel management system it has spent five years and tens of millions of dollars to build and implement, and is telling all of its users to return to using the antiquated and much-maligned system the new one was supposed to replace.

In a May 24 memo, Gil Cisneros, the undersecretary of Defense for personnel and readiness, announced the sudden end of the program, called MyTravel, saying the new system will completely cease operations on Sept. 13. The memo gave no explanation for the change in course.

The Pentagon’s public affairs office initially told Federal News Network the department would not be able to provide any details about the decision until later this week. After this story’s initial publication, a spokeswoman said DoD had determined the MyTravel program was “no longer in the best interests of the department,” although it had “made significant advancements.”

“Travel volume has been significantly lower than the travel transaction volume that was projected at [the time of] contract award due to COVID-19 and a shift to virtual meetings,” Cmdr. Nicole Schwegman, a Pentagon spokeswoman, said in an emailed statement.  “Additionally, department priorities have shifted to focus on DoD financial improvement and readiness to achieve an unmodified audit opinion (i.e., a ‘clean audit’).  These factors ultimately resulted in the decision to not exercise this next option year of the contract.”

In Sept. 2021, DoD awarded SAP Concur a sole-source $374 million contract to operate MyTravel, the department’s replacement for the Defense Travel System (DTS), for up to seven years. Not all of that money has been spent: DoD’s latest decision effectively means it will decline to exercise the contract’s last five option years.

However, records in the Federal Procurement Data System show DoD has already obligated at least $13 million toward the contract. That figure doesn’t include the additional work that’s been required to integrate MyTravel with DoD components’ financial management systems and other aspects of the transition, such as training. It also does not include a separate, $10 million other transaction agreement the department issued to SAP Concur, Booz Allen Hamilton, Accenture and CWTSato Travel in August 2018 to design the prototype that formed the basis for the new system.

In its Friday statement, the department did not provide specific data to support the contention that its projected travel needs had decreased since the contract was first awarded. But publicly-available records appear to show the trend heading in the opposite direction, at least as of 2022.

According to data the department submits to the Office of Management and Budget each year, DoD had $8.40 billion in total travel pay outlays in 2022, its largest amount since 2011. That’s compared to $6.55 billion in 2021, when the production contract was awarded to SAP Concur, $7.96 billion in 2018, when the prototype OTA was awarded, and $5.28 billion in 2017, when DoD first conducted the business case that supported going ahead with the DTS replacement that eventually became MyTravel.

The complete cancellation was also unexpected in light of the fact that only seven months ago, Cisneros issued a memo telling DoD components that the Pentagon was starting to make the use of MyTravel mandatory as it moved toward sunsetting DTS.

“The department continues to make critical investments in systems that create efficiencies and drive down administrative costs,” he wrote in the Oct. 2022 message. “MyTravel enables the department to retire legacy travel systems while delivering an industry leading product that aligns with the department’s broader technical strategy, [including] cloud computing, cybersecurity and data management.”

And as recently as March, when DoD delivered its 2024 budget proposal to Congress, the department said the system had already been deployed to Defense agencies, and would be rolled out to each of the military services by late 2023.

In a notice on the Defense Travel Management Office’s website, officials said the DoD components that have already started using MyTravel would get more detailed guidance on how to wind down their use of the new system “in due course.”

But officials told Defense organizations they should plan to revert back to the old Defense Travel System by July 13, presumably to allow enough time to finalize any MyTravel transactions before the new system ceases functioning in September.

The Pentagon has been trying to replace DTS since as early as 2015, when the Defense Digital Service started working on its own, separate pilot project to stand up a commercially-based alternative. The current system is widely disliked by users, and officials have characterized it as “aging,” “cumbersome” and “inefficient.”

The Government Accountability Office also found in a 2019 study that DTS was responsible for an estimated $965 million in improper payments between 2016 and 2018. DoD said in its 2021 financial report that it expected MyTravel to significantly lower the improper payment rate. It remained high as of 2022, with 4.27% of DoD’s $8.4 billion in travel payments categorized as improper, according to the government’s paymentaccuracy.gov database.

The department initially had extremely high hopes for MyTravel in other ways as well. At the time of the prototype award, officials projected that the system would “exponentially lower the cost of airline tickets” and save more than 10 million labor hours each year by simplifying the travel booking process.

Later, in 2021, when the Pentagon issued its contract for the production version of MyTravel, it justified the sole-source decision by saying that only SAP Concur’s solution could meet its needs for a DTS replacement, because the work the company had already done to integrate its commercial software-as-a-service offering with DoD’s systems was “highly specialized.”

“It has taken three years, including more than 30 sprint cycles, for Concur to configure [MyTravel] and adapt it for DoD’s specific operational and regulatory compliance requirements,” Defense officials wrote in contracting paperwork justifying the decision to make the $374 million award without competition. “Through the iterative sprint process, Concur implemented configuration of their travel and expense product to provide the DoD with functionality in accordance with the DoD Joint Travel Regulation (JTR). This included configuration for temporary duty business travel, local travel, travel to military installations and overseas travel. Concur also built the Concur Cloud for Public Sector hosted in Amazon Web Service (AWS) GovCloud to provide the baseline required for FedRAMP and DoD cybersecurity requirements.”

The same 2021 document emphasized the urgency of moving the department away from DTS because of its user unfriendliness, auditability problems and heavy technical debt. Only Concur’s solution could achieve that in a reasonable timeframe, officials argued.

“Any delays will impact the government because it will require continued use of the aging travel system,” according to the justification and approval document approved by John Tenaglia, the department’s top official for pricing and contracting policy. “The longer these DTS conditions persist, the longer DoD will go without realizing the full benefit of a modernized cloud-based commercial travel and expense capability, and the more time and money it will lose due to the current system’s inefficiencies. Additionally, continuing to use DTS will require further investment to update it, making the efforts and investment in [MyTravel] over the past three years meaningless.”

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