In one of DoD’s more creative responses to sequestration, the department is turning to credit card perks as one way to offset its appropriations cuts.
The military services have begun implementing policies that require both uniformed members and civilians to use government-issued travel cards to pay for all of the expenses they incur while they’re moving to a new duty station.
The Pentagon framed the changes as a benefit to its personnel — they’ll no longer have to pay out-of-pocket for those incidental expenses and wait for reimbursement.
But the policy will help DoD’s bottom line too: if DoD can increase its expenditures through the travel card program by 5 percent, its credit card vendor will bump the department’s cash-back rebate for all those charge card expenses up to 11 percent, according to the Defense Travel Management Office.
DoD says more use of the travel cards will also generate better data for the department.
“And that allows us to negotiate better rates, whether it’s with the rental car companies or amenities with hotels,” Harvey Johnson, DTMO’s director said in a release.
The Army and Air Force have already implemented the policy change. The Navy is still in a pilot phase, but it’s expected to follow with permanent change in the coming months.
Separately, officials are making two changes to the DoD-wide Joint Travel Regulation, also in an effort to save money.
As of Oct. 1, DoD stopped reimbursing members separately for incidental expenses such as ATM fees, laundry and tips. Those items will now fall under a flat reimbursement for “miscellaneous expenses” that’s capped at $5 a day. The move is projected to save $18 million per year.
And beginning Nov. 1, DoD will significantly scale back its reimbursements for service members and civilians who are serving away from their normal duty stations for extended periods of time.
As of now, federal travelers are reimbursed per diem for both their hotel and meal and incidental expenses at levels that are supposed to reflect the costs at the travel destination. The new policy will cut back those payments during extended stays: for trips of more than 30 days, DoD will only pay 75 percent of the set per diem rates. And for stays of more than 180 days, the payments will fall to 55 percent of the locality rate. DoD’s rationale is that it’s probably overpaying for those longer trips right now, since it already has agreements in place with large hotel chains that give it discounted rates for extended stays.
“If both the traveler and their (commercial travel office) determine that lodging is not available at the reduced per diem rate, the authorizing official may authorize reimbursement of actual lodging expenses (not to exceed the locality per diem rate),” DTMO officials wrote in a message announcing the change. “However, the traveler will receive M&IE at the reduced rate.”