Procurement of Travel Management Services for the Australian Government
Consultation Paper – December 2013
This document provides information and seeks feedback from prospective tenderers on a proposed upcoming tender process for travel management services for the Australian Government.
This document is not a notice or otherwise a part of any tender process for travel management services, which is yet to be determined or commence.
Important Notice: The information in this document is indicative only and the Department of Finance (Finance) reserves the right, in its absolute discretion, to change any aspect of this strategy at any time.
Finance makes no representation and does not warrant that:
- any information contained in this document is accurate, current or complete;
- any feedback given or comments made by prospective tenderers in response to this document will be used or otherwise acted upon or taken into account; or
- a future tender process will be undertaken at a particular time, in a particular manner, or at all.
Nothing in this document or arising from this document gives rise to or is intended to give rise to:
- a contract; or
- any obligation on the part of the Australian Government, or expectation on the part of any recipient of this document, in connection with any subsequent tender process.
Where appropriate, Finance may incorporate feedback into any subsequent tender documentation, or otherwise use it to inform the proposed approach to market. Finance does not guarantee that any or all feedback will be incorporated in any subsequent approach to market. Finance also reserves the right to respond, or not respond, to specific questions or submissions at its own discretion.
Information contained in any future request for tender material will supersede information contained in this document.
Introduction
The whole of Australian Government travel arrangements are coordinated procurements, established by Finance that service the diverse travel needs of approximately 150 Australian Government departments and agencies (‘ the Government agencies’).
Prior to the introduction of the whole of government travel arrangements, there was no consistent approach to travel procurement across Government agencies. A Scoping Study (‘the Study’) into the travel arrangements noted the decentralised approach to travel procurement, with no overarching coordination and strategic management, had resulted in a fragmented approach with inconsistent practices, duplication of effort and different pricing levels across the Government agencies.
In response to the findings of the Study, Finance established and implemented the whole of Australian Government travel arrangements, with the objectives to:
reduce the cost of supply to Government agencies;
continue to meet the business needs of Government agencies;
contribute to a competitive and viable industry;
establish fair, equitable and transparent processes; and
optimise savings through cost reductions, improved efficiencies and promotion of behavioural change.
Phase 1 of the travel arrangements came into effect on 1July2010, with the establishment of a panel of five (5) Travel Management Companies (TMCs) to provide travel management services, and pricing arrangements with four (4) domestic and twelve (12) international airlines (Airlines).
Phase 2 of the travel arrangements improved efficiencies further, through the appointment of a single travel card provider, a sole accommodation program manager, and a panel of two car rental providers. These arrangements came into effect on 2July2012.
Further information on the current arrangements can be found at: http://www.finance.gov.au/procurement/travel-and-related-services/index.html
Both phases of the travel arrangements have provided bottom line savings to the budget, improved contractual efficiencies, increased transparency and provided greater value for money in the purchasing of travel services.
Whilst the current travel arrangements are a significant improvement on the decentralised approach prior to 1July2010, there is scope for further improvements. This paper sets out the potential strategy for the renewal of the travel management services (‘the Services’).
It is intended that the Services will include integration with the service providers under the Phase 2 travel arrangements, to the extent that the Services:
allow travellers and travel bookers to directly access the inventory of the accommodation program manager and the car rental service providers;
use the whole of government travel card arrangement for travel expenses, where payment occurs automatically; and
provide comprehensive (third level) data for all charges incurred.
Travel Management Services Requirements
Finance intends to approach the market in the second quarter of the 2014 calendar year to establish new travel management service contracts for the Australian Government. The objectives for the travel management services arrangement include:
continuing to maximise value for money for the Commonwealth;
creating a sustainable business model for the travel industry;
increasing the use of technology to streamline the interaction between Government agencies, travel services providers and users of Government travel related services; and
contributing to transparency of travel expenditure through the provision of accurate and timely travel data.
Within the context of the objectives for this project, the key elements of the new travel management services are:
for individuals – a service that is accessible, easy to use, and allows travellers to easily manage their travel (air, accommodation and car rental) requirements;
for Government agencies – a solution that promotes administrative efficiency , with minimal implementation effort, reduces cost and supports effective reporting and travel expense management across diverse system, policy and operational environments; and
for Finance – an arrangement where the service providers are fully accountable for the services they provide to the Australian Government.
Finance expects the eventual Travel Service Provider(s) (TSP) will contribute to these objectives by:
developing a strategic partnership with Finance to provide exceptional levels of service to the Government agencies, where issues are quickly identified and resolved;
representing the Australian Government’s interests when dealing with relevant parties in delivering the Services to the Australian Government;
acting reasonably at all times to ensure the success of the arrangement, including minimising risk for the Government agencies;
maintaining open and effective communication with Finance as the manager of the arrangement and with the Government agencies as the recipients of the Services;
providing transparent fee arrangements, including reflecting any discount or other reduction linked to the Services;
recognising the need for delivering consistent and high quality products and services across the Government agencies, allowing tailoring where appropriate to suit the specific needs of the Government agencies;
actively contributing and supporting innovation in service delivery;
actively managing an integrated supply chain to deliver seamless services, data and reporting;
driving efficiencies in service delivery to support value for money to the Australian Government; and
providing services consistent with the Australian Government’s travel policies, including any individual guidelines of the Government agencies in respect of travel (which may include policies that restrict the use of certain fares).
Key features of the new arrangement are likely to include:
- a whole of government arrangement, managed by Finance, consisting of a panel of one, or more, TSP(s) delivering consistent and high quality products and services across the Government agencies, tailored to the requirements of approximately 150 Government agencies where required;
i. TSP(s) must have the capacity to deliver the Services to the Government agencies. This involves the accurate and timely processing of approximately 700,000 domestic and 65,000 international bookings per annum, and the management of approximately 100,000 traveller profiles;
- clear contractual arrangements will be established so that service providers are accountable for delivering the Services to the highest possible standards. This includes having the appropriate contractual (or other) mechanisms in place with (and potentially between) the parties (including those contracted under Phase 2) delivering the Services to Finance and Government Agencies;
- a one stop shop that meets Government agencies’ travel needs, with an online booking tool or system (‘the OBT’) as the preferred booking channel for domestic and international travel. That is, travel bookings and amendments (pre- and post-ticketing) can be made online for air, accommodation and car rental;
- to the extent possible, direct contact with the travel service provider (i.e. consultant assisted travel bookings) would be used: for VIP services; in emergencies; where the OBT is unable to perform the function; or when access to the OBT is restricted (e.g.due to geographical location);
- the Services (OBT and consultant support) would need to be available 24/7 (except for OBT scheduled maintenance requirements) and also accessible through mobile devices (e.g. smart phones, tablets);
- transparent pricing that reflects the cost efficiencies from booking online compared to less efficient and potentially more expensive booking methods, but only to the extent that the OBT has the requisite functionality (e.g. making changes pre- and post-ticketing, booking of international travel);
- provision of comprehensive pre-defined data that does not require extensive manual intervention by Finance or Government agencies for reporting purposes; and
- the TSP contract will be for four years, with two extension options – the first extension option of two years and the second extension option of one year.
Attachment A – provides an overview of the Australian Government travel profile.
Attachment B – sets out the high level functions and travel management service requirements.
Attachment C – sets out an overview of the current travel management service processes.
Attachment D– provides a schematic of the proposed travel management services model.
Indicative Timeline and activities
The following table sets out a high level indicative timeline and activities in order to deliver the project.
Start-up(Now – Feb 2014) / RFT Process
(Mar – Oct 2014) / Implementation
(Nov 2014 – Apr 2015)
Appointment of resources
Consultation with agency and suppliers
Draft RFT documents
Establish due diligence data room / Issue RFT
Evaluate bids (including testing of solutions)
Negotiate and execute
Develop change management plan / Finalise Transition Plan
Implement new arrangement
Agency communication
Services commence
Industry Consultation
Finance welcomes any relevant feedback on its intended approach. In particular Finance would like feedback on the following:
A. The current average online adoption rate (for booking domestic travel) across the Australian Government is approximately 60%. The adoption rate has been gradual (from an approximate average of 14% prior to the introduction of whole of government travel arrangements). The rate also differs across the Government agencies, ranging from approximately 10% to over 95%. The introduction of the OBT has proven successful in simplifying travel bookings; delivering efficiencies; reducing cost; and influencing traveller behaviour.
Finance is now considering extending the use of the OBT to booking of international travel. Finance is also looking at ways to increase the OBT adoption across the Australian Government to further influence traveller behaviour, reduce cost and deliver greater efficiencies.
Ideally, the OBT should be the preferred mechanism for booking domestic and international travel (including the management of pre and postticketing changes). Consultant assisted travel bookings would be used: for VIP services; in emergencies; where the OBT is unable to perform a function; or when access to the OBT is restricted (e.g. due to geographical location).
· Is the online booking functionality currently and readily available to allow the Australian Government to manage its domestic and international travel bookings as described above? If so, can the OBT also perform pre and postticketing changes? Is your organisation able to provide this system?
· Describe any integration (including information) requirements and associated lead time that you consider are necessary for the provision of the Service including the rollout of the OBT to Government agencies.
· Is the greater focus on an OBT the most effective approach to influencing traveller behaviour? What other measures could/would need to be taken in conjunction with the OBT being the preferred channel for booking travel?
B. The Government agencies have a broad range of travel requirements, including, but not limited to: simple point to point ; multi-leg domestic and international bookings; charter flights; small and large group travel; excess baggage requirements; long stay accommodation;, special needs (disabled and elderly passengers, unaccompanied minors, freight); and VIP services.
· Considering the proposed strategy for OBT as the preferred travel booking channel, are there any limitations to using the OBT to meet the Australian Government travel requirements?
C. The OBT will need to provide the Australian Government travellers and travel bookers with access to inventory of the Australian Government contracted: airlines; accommodation program manager; car rental service providers; and non-contracted airlines. The online booking tool will also need to support the processing of payment to these service providers, using the whole of government travel card arrangement.
· Describe any integration (including information) requirements and associated lead time necessary for travel management service provider(s) to integrate their systems with the Australian Government contracted airlines, accommodation program manager, car rental and travel card service providers.
· Some service providers (e.g. accommodation program manager, car rental providers) distribute their inventory through channels other than global distribution systems. What are the likely challenges for travel service provider(s) to integrate their systems with such service providers? Is your organisation able to implement this integration?
D. Finance is considering incorporating a pretrip approval requirement as part of the OBT where the pretrip approval function would be made available to those Government agencies that choose to take up that functionality.
The decision to pursue the inclusion of the pretrip requirement , as part of the OBT, remains with Finance. At this stage, Finance intends to assess this during the RFT process, based on whether the proposed solution by prospective tenderers: meets the business needs of the Government agencies; is efficient and seamless to implement (including interfacing with Government agencies’ systems (e.g. with a HR system); and incurs additional cost (if any).
· Is pretrip approval functionality currently and readily available? Are you able to provide it? What level of customisation or configuration would be necessary to achieve the above requirement?