The Defense Department overestimated savings for the Defense Travel System (DTS) in an internal analysis and failed to fix implementation problems with the system, according to the Government Accountability Office.

In a letter sent today to several House and Senate leaders, GAO officials wrote that DOD predicted personnel savings based on unreliable data in a September 2003 economic analysis. The analysis anticipated DOD would save $56 million per year from 2009 through 2016. GAO added that DOD has no awareness of DTS usage and weak management of system requirements and testing.

DOD had said the Navy and Air Force would save $24.2 million per year because DTS would reduce the need for employees, but both services have rebutted that assertion, GAO said. The Navy told the agency it will not realize any employee savings because of DTS, and the Air Force said it would shift rather than cut workers, the letter states.

DOD also said the system would save $31 million in fees paid to commercial travel offices. Department calculations assumed that 70 percent of transactions would not require extra handling, but that assumption was based on a news article, not any actual data, GAO said.

The department’s tracking of DTS use is based on outdated information, GAO said. Usage varies at each DOD installation, but independent analysts have estimated that the system is used in one-tenth to one-third of travel transactions departmentwide.

In a response to GAO, David Chu, undersecretary of Defense for personnel and readiness, objected to GAO’s finding that personnel savings from DTS are unrealistic.

“Recognizing fiscal constraints, the department continues to identify efficiencies and eliminate redundancies to help leverage available funds,” Chu wrote.

DOD concurred with GAO’s recommendations that it should develop a way to track DTS usage and provide periodic updates.

DTS is an electronic travel system designed to integrate all travel functions, including authorization, ticket purchase, vouchering and accounting. DOD commissioned it in 1998 to be a fee-based system that would use commercial technology. The original contract anticipated full deployment by 2002.

But DTS is still completing its deployment to more than 11,000 DOD installations and is now expected to be fully deployed in fiscal 2007.

DOD’s chief information officer approved a new funding level of $564 million for DTS in December 2003, GAO said. An earlier GAO report states that the system has cost DOD more than $474 million so far.

Of that, $264 million has gone to Northrop Grumman, the current developer of the system. The company won a modified contract for DTS in 2001 that switched the program to a cost-plus-profit structure built on proprietary software.

Sen. Tom Coburn (R-Okla.) sponsored an amendment to the 2007 Defense Authorization bill that would restrict DOD from spending any more funds on developing DTS other than to pay the contractor on a fee-per-usage basis. On the Senate floor, he said that “most Pentagon employees would be better off to go to Travelocity or Orbitz.”

But Armed Services Committee Chairman Sen. John Warner (R-Va.) urged caution, saying “the amendment could virtually bring what is in existence at DTS to a standstill.”

The House version of the authorization bill does not contain a corresponding measure. House and Senate conferees will take up the issue this fall.