Frequent Traveler Policies and Programs
Updated April 28, 1997
Barbara L. Schwemle
Analyst in American National Government
Frequent Traveler Policies and Programs
By law, frequent flyer bonus coupons received by executive and judicial
branch employees as a result of official government travel are the property of
the U.S. government. Comptroller General decisions, General Services
Administration (GSA) regulations, Office of Government Ethics regulations, and
Administrative Office of the United States Courts guidance implement the law.
By law, frequent flyer bonus coupons received by a Member, officer, or employee
of the Senate as a result of such travel are the property of the government.
Senate Committee on Rules and Administration regulations implement the law.
By regulation, Members or employees in the House of Representatives have
discretion over using bonus coupons, but are encouraged to use them for official
travel. Legislation has been introduced in the 105th Congress to ban personal
use of officially accrued frequent flier mileage by a Member, officer, or employee
of the House of Representatives.
The Senior Executives Association asked the Comptroller General of the
United States to reconsider the policy in 1991. As part of that review, the
General Services Administration prepared a discussion paper that, among other
issues, examined whether frequent flyer benefits are government property or
contract rights and whether frequent flyer points accrued during off-duty travel
belong to the employee. The Comptroller General made no change in the policy.
Frequent flyer benefits may be used to upgrade airline accommodations for
purposes of official travel. In the executive branch, the use of premium-class
other than first-class airline accommodations may be authorized or approved
when obtained as an accommodations upgrade through the redemption of
frequent traveler benefits. "Premium-class other than first-class airline
accommodations" is defined as any class of accommodations between coach-class
and first-class, e.g., business-class. In the judicial branch, upgrade to businessor first-class accommodations may be authorized. The legislative branch does
not specify the class of service.
A survey by GSA found that federal agencies are promoting frequent
traveler programs, and some executive branch agencies are sharing travel
savings with employees through incentive awards. Legislation passed by the
House of Representatives would require the use of the federal travel charge card
for payment of all travel expenses, to the maximum extent practicable, and
would authorize up to 10 programs to test methods for paying travel and
relocation expenses, The results of these programs will be measured to
determine any future change in federal government travel policies.
Executive Branch Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comotroller General Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Services Administration Regulations . . . . . . . . . . . . . . . . . . .
OMice of Government Ethics Regulations . . . . . . . . . . . . . . . . . . . . . .
Department of Defense Regulations . . . . . . . . . . . . . . . . . . . . . . . . . .
Judicial Branch Policy
Legislative Branch Policy
Reconsideration of the Policy
Frequent Traveler Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Executive Branch Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
General Accounting Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Travel and Transportation Reform Act of 1997
Frequent Traveler Policies and Programs
Generally, frequent flyer bonus coupons received by government employees
as a result of official travel are the property of the U.S. government and must
be submitted to the appropriate off~cial. Use of frequent flyer benefits to
upgrade airline accommodations for purposes of official travel is permitted. A
survey by the General Services Administration (GSA) found that federal
agencies are promoting frequent traveler programs, and some executive branch
agencies are sharing travel savings with employees through incentive awards.
This report discusses federal government policies governing frequent flyer bonus
coupons and accommodations upgrades and frequent traveler programs in the
federal government. It also discusses House-passed legislation requiring the use
of the federal travel charge card for payment of all travel expenses to the
maximum extent practicable, and authorizingup to 10 programs to test methods
for paying travel and relocation expenses.
Executive Branch Policy
Frequent flyer bonus coupons became an issue in 1981. A Comptroller
General decision in that year established the policy that such coupons, when
acquired through official government travel, are the property of the government.
This policy is still applicable today for most government employees.
Comptroller General Decisions
By law, the Comptroller General of the United States had authority to
settle claims of or against the United States Government and to issue decisions
requested by disbursing or certifying officials or heads of agencies.' As of June
30, 1996, the Comptroller General no longer decides claims as the Legislative
Branch Appropriations Act, 1996 transferred this authority to the executive
' 31 U.S.C. 3702 and 31 U.S.C. 3529.
branch by P.L. 104-53.2 The issue of frequent traveler benefits was first
addressed in 1981 when t h e Comptroller Genera1 declared:
It is a fundamental rule of law that a Federal employee is obligated to account
for any gift, gratuity, or benefit received from private sources incident to the
performance of official duty, and therefore an employee may not retain any
"half-fare coupon," "bonus point," or similar item of value received from a
commercial air carrier on the basis of the purchase of an airline ticket to he
used for official t r a ~ e l . ~
Decisions o n companion tickets and commingling of tickets have also been
issued. As t o whether a free companion airline ticket may be used by a n
employee for personal use, t h e Comptroller General noted that existing GSA
regulations do not permit this use. The Comptroller General would not object
if GSA were t o change its regulations t o permit such use, provided t h e
appropriate agency official decides t h a t t h e ticket is of no use to the agency and
t h e approval will not result i n additional cost t o t h e government4 With respect
t o whether total mileage credits in frequent flyer accounts t h a t are a mix of
official government and personal travel become t h e sole property of t h e
government agency, t h e Comptroller General advised t h a t employees who
participate in a frequent flyer program should maintain separate accounts for
personal travel and official travel if the airline permits. I n cases i n which t h e
airline permits only one account per customer, employees do not forfeit t h e right
to use credits for personal travel, provided they keep adequate records
separating persona1 from official traveL5
The Comptroller General's decision was enacted as law in 1994: t h e
Federal Acquisition Streamlining Act of 1994 (P.L. 103-355) required t h a t any
awards granted under a frequent traveler program accrued through official
109 Stat. 535; the committee report accompanying the legislation stated that the
action was taken "because claims and judgment duties are not legislative activities and
detract from the essential purposes of the agency. The Comptroller General is directed
to work with the director of the Office of Management and Budget to ensure an
appropriate transition." See: U.S. Congress, House Committee on Appropriations,
Legislative Branch Appropriations Bill, 1996, report to accompany H.R. 1854, 104th
Cong., 1st sess., H.Rept. 104-141 (Washington: GPO, 1995), p. 33. The provision was
proposed in the House of Representatives, stricken by the Senate, and restored in the
W . S . ComptrolIer General of the United States, Gifts or Prizes Acquired in the
Course of Ofzcial Travel Assignments, B-199656 (Washington: July 15, 1981),4 p. See
also U.S. General Accounting Office, Decisions of The Comptroller General of the United
States, vol. 63, October 1, 1983 to September 30, 1984 (Washington: GPO, 19841, pp.
U.S. Comptroller General of the United States, Southwest Airlines - Free
Companion Ticket, B-254858 (Washington: Nov. 22, 1995), 4 p.
U.S. Comptroller General of the United States, Pananza Canal CommissionFrequent Flyer Benefits-Commingling of Accounts, B-257525 (Washington: h'ov. 30,
19941, 5 p. (Hereafter cited as Panama Canal Commission Decision.)
travel must be used only for official t r a v e l . V S A was required t o issue
guidelines to ensure t h a t agencies promote, encourage, and facilitate the use of
frequent traveler programs offered by airlines, hotels, and car rental vendors by
federal employees. GSA issued these guidelines on November 1: 1995.?
Computer software and services t o track frequent flyer mileage are mentioned
i n t h e guidelines.'
The frequent traveler programs provision was a n amendment to S. 1587.
Senator William Roth, who offered t h e amendment on behalf of Senator J o h n
McCain, said that, "taxpayers are losing millions of dollars per year by paying
for tickets, lodging, and rental cars t h a t could otherwise be obtained free of
charge or a t a discount if Federal employees would more fully participate in such
programs."s Senator John Glenn, i n supporting t h e amendment, noted:
About three years ago, I think it was, we heard stories about some of the
people who had retired from Government service, people who had been doing
a lot of traveling on Government business. They had collected a lot of the
frequent-flier miles and, upon retirement, had taken extensive trips on
frequent-flier miles that they had built up during their Government. service.
That is not what was intended. What was intended was that frequent-flier
miles or benefits to help people travel, accrued as part of Government travel,
should be used for Government travel and nothing else.''
Both Senators Roth and Glenn agreed t h a t the provision "would apply to
everyone-Federal employees, Members of Congress, employees of Congress,
108 Stat. 3367; the provision was a Senator McCain amendment (offered by Senator
Roth) to S. 1587 which was agreed to by voice vote on June 8, 1994. For a discussion of
the provision, see: Congressional Record, daily edition, vol. 140, June 8, 1994, pp. S65806581.
The House of Representatives passed S. 1587, amended, by voice vote on June 27,
1994. The Senate agreed to the conference report (H.Rept. 103-712)on August 23, 1994
by voice vote. The House agreed to the conference report by a roll call vote of 425 to 0
on September 20, 1994. See also: U.S. Congress, House of Representatives, Federal
Acquisition Streamlining Act of 1994, report to accompany S. 1587, 103rd Cong., 2nd
sess., H. Rept. 103-712 (Washington: GPO, 19941, p. 222. S. 1587, as passed by the
House, did not include the provision, but the House receded to the Senate in conference.
U.S. General Services Administration, "Federal Travel Regulation; Promoting,
Encouraging, and Facilitating the Use of Frequent Traveler Programs and Benefits,"
Federal Register, vol. 60, no. 211, Nov. 1, 1995, pp. 55583-55584.
Among the companies are: Fly Smart Software, Inc. (800-FLY-TRAX), Frequent
Flyer Services (800-333-5937),Frequent Travel Management, Inc. (800-386-2878), and
Travelware (800-892-5577). GSA cannot endorse or recommend any of the companies.
Congressional Record, daily edition, vol. 140, June 8, 1994, p. S6580.
Bid. p. S6581.
General Services Abinistration Regulations
The Federal Property and Administrative Services Act of 1949 provided the
GSA Administrator with authority to issue regulations. Heads of executive
agencies were mandated t o issue orders and directives to carry o u t these
regulations.12 Although frequent flyer issues date only from 1981, existing
statutory authority is broad enough t o allow GSA t o issue regulations on
frequent traveler benefits. These regulations provide that:
All promotional materials (e.g. bonus flights, reduced-fare coupons, cash,
merchandise, gifts, and credits toward future free or reduced costs of services
or goods) received by employees in connection with official travel or incident
to the purchase of a ticket for official travel, or other services such as car
rentals, are due the Government and may not be retained by the employee.
When an employee receives promotional material from any commercial source
incident to official travel, the employee shall accept the material on behalf of
the Federal Government and relinquish it to an appropriately designated
Regulations on redemption of frequent traveler benefits provide that:
Frequent traveler benefits earned in connection with official travel, such as
mileage credits, points, etc. may be used only for official travel. Employees
may not retain and use such benefits for pezsonal travel. Since the
Comptroller General has ruled that a frequent traveler benefit is the property
of the Government if any part of it is earned through official travel, employees
should maintain separate frequent traveler accounts for official and personal
Employees may be reimbursed for t h e cost to enter certain frequent traveler
programs when entering t h e program is expected t o result in a savings to t h e
government. Reimbursement may not exceed t h e expected amount of the
Office of Government Ethics Regulations
Frequent traveler benefits are also addressed i n Office of Government
Ethics regulations. Under t h e regulations, "Anything which is paid for by t h e
Government or secured by t h e Government under Government contract" is not
covered by the definition for "gift." The regulations note:
63 Stat. 390. See also 40 U.S.C. 486(c)
l341 CFR 301-1.103(b). The regulations appeared in the Federal Register as follows.
48 FR 48232, October 18, 1983. 54 FR 20262-20363, May 10, 1989, as amended by 54
FR 47523-47524, November 15, 1989. Redesignated by 58 FR 5823458244, October 29,
1993. The May 10, 1989 regulations codified the Federal Travel Regulation (FTR) in
Title 41, Chapters 301-304 of the Code of Federal Regulations. The FTR was thus,
41 CFR 301-1.103(D(1).
41 CFR 301-1.103(f)(2).
Some airlines encourage those purchasing tickets to join programs that award
free flights and other benefits to frequent fliers. Any such benefit earned on
the basis of Government-financed travel belongs to the agency rather than to
the employee and may be accepted only insofar as provided under 41 CFR 3011.103(b)(f).~"
Department of Defense Regulations
The Department of Defense (DOD) has implemented the law with
regulations covering both uniformed and civilian personnel. According to the
Frequent flyer credits earned on official travel are the property of the Federal
Governinent and may not be used for personal travel. First priority should be
given to using them for free airline tickets, hotel rooms, and rental cars. They
may also be used for airline, hotel, and rental car upgrades, but they may not
be used for upgrades to first-class airline accommodations. They may be used
for upgrades to premium-class-less-than-frrst-class (e.g., business class). If
there is no premium class other than first class, the credits may not be used
for airline upgrades a t alI.l7
DOD, in a November 12, 1996 memorandum, encouraged, but did not
require, all DOD personnel t o enroll in frequent traveler programs. Personnel
are t o redeem credits so t h a t DOD receives maximum value for all credits
received as a result of official travel. Credits may be used for subsequent official
transportation tickets, hotel and motel rooms, and rental vehicles, including
service upgrades. Credits earned through official travel may not be used for
l6 5 CFR 2635.203(b)(7). The regulations appeared in the Federal Register: 57 FR
35006-35067, August 7,1992; 57 FR 48557, October 27, 1992. The pertinent comments
and text of the regulation cited in this report are at 57 FR 35013-35014 and 35045.
I7 U.S. Dept. of Defense, Office of the Undersecretary of Defense For Acquisition and
Technology, Defense Transportation ReguZation Part I Passenger Movement, DOD
4500.9-R (Washington: August 1995), p. 102-11. The regulations are restated in the
Joint Federal Travel Regulations (JFTR) which cover the uniformed military and the
Joint Travel Regulations (JTR) which cover DOD civilians. See: U.S. Dept. of Defense,
Joint Federal Travel Regulations, Part D: Gifts, Gratuities and Other Benefits Received
From Commercial Sources Incident to Performance of Official Travel, C1200
Requirements for Promotional Items to be Relinquished to Government (Washington:
Oct. 1, 1995), p. ClD-1. U.S. Dept. of Defense, Joint Travel Regulations, Chapter 2
Administration and General Procedures, Part A: Travel Policy, U2010 Member's
Responsibility (Washington: Aug. 1, 19951, p. UZA-1.
l8 U.S. Dept. of Defense, Under Secretary of Defense, Travel Reengineering
Implementation Memorandurn #13 - Department of Defense (DODj Frequent Flyer
Program Policy (Washington: Nov. 12, 1996), 2 p.
Judicial Branch Policy
The Judicial Conference of the United States establishes judicial branch
policy on frequent flyer bonus coupons. The Administrative Office of the United
States Courts translates that policy into guidance which is followed by t h e
Administrative Office, Federal Judicial Center, and Supreme Court. According
to t h a t guidance:
Bonuses such as free or upgraded tickets and lodging obtained by redemption
of frequent flyer mileage and lodging points accrued on official travel may be
used for other official travel with no restrictions. However: the Comptroller
General has determined that such bonuses are government property and thus
cannot be used for personal, unofficial (including spousal) travel or for
upgrades associated with such travel. . . .If they are, the traveler is personally
liable to the government for the value of the tickets, accommodations or other
Legislative Branch Policy
By law, any travel award t h a t accrues by reason of official travel of a
Member, officer, or employee of the Senate is considered the property of t h e
office for which the travel was performed and may not be converted to personal
use. "Travel a w a r d is defined as any frequent flyer, free, or discounted travel,
or other travel benefit, whether awarded by coupon, membership, or otherwise.
"Official travel" is defined as travel engaged i n the course of official business of
Regulations of the Senate Committee on Rules and
Administration which implement the law provide that:
Discount coupons, "frequent flyer" miles or any other promotional materials
earned as a result of trips paid for by Senate funds are the property of the
government and may not be converted to personal use. The traveler must
turn in all such materials to the office manager for use in defraying the cost
of other official travel incurred by the officez1 These should be integrated
into the office's plans for future official travel. Even in those instances when
the coupons are non-transferable or carry an impending expiration date, and
it appears that the office will not be able to use them, they are still Senate
property and should not be converted to personal usez2
The Senate regulations also permit Members, officers, and employees who
are leaving the Senate to purchase their frequent flyer mileage. Permission t o
do so must be obtained from the Committee on Rules and Administration and
U.S. Administrative Office of the United States Courts, Memorandum to All
United States Judges Use of Frequent Flyer Bonuses and Other Discount Tranel Options,
(Washington: Aug. 20, 1991), 4 p.
Stat. 43; 2 U.S.C. 1436.
U.S. Congress, Senate Committee on Rules and Administration, U.S. Senate
Handbook (Washington: 19961, p. 11-18, (Hereafter referred to as Senate Handbook.)
Senate Handbook, p. 11-44,
Members, officers, or employees must reimburse the Senate a reasonable sum of
money for all mileage they wish to use. The regulations provide that a
"reasonable sum of money" be determined by the Committee based upon the
number of tickets that may be obtained from the unused mileage and valuation
of the tickets at the applicable government rate. Any funds received are
deposited in the United States Treasury Miscellaneous Receipts Acc0unt.2~
Before the regulation was issued, the Office of General Counsel a t the General
Accounting Office had written letters to Senators Wendell Ford, Chairman, and
Ted Stevens, Ranking Republican, Committee on Rules and Administration,
stating it did not object.%
Under the House of Representatives regulations:
Free travel, mileage, discounts, upgrades, coupons, etc., accrued to Members
or their Clerk Hire employees as a result of official travel awarded at the sole
discretion of the company as a promotional award may be used at the
discretion of the Members or their Clerk Hire employees. The Committee on
House Oversight encouragesthe official use of these travel promotional awards
Legislation has been introduced in t h e 105th Congress to ban personal use
of officially accrued frequent flier mileage by a Member, officer, or employee of
the House of Representatives. H.R. 436 was introduced in the House of
Representatives by Representative Mark Sanford on January 9, 1997 and
referred to the Committee on House Oversight and in addition to the
Committees on Government Reform and Oversight, Rules, Transportation and
Infrastructure, and National Security. S. 205 was introduced in the Senate hy
Senator Bill Frist on January 28, 1997 and referred to the Committee on
Governmental Affairs. Both bills are entitled Citizen Congress Act and would
provide that "any travel award that accrues by reason of official travel of a
Member, officer, or employee of the House of Representatives may be used only
with respect to offlcial travel." The Committee on House Oversight would
prescribe regulations. "Travel a w a r d means any frequent flier mileage, free
travel, discounted travel, or other travel benefit, whether awarded by coupon,
membership, or otherwise. "Official travel" means travel performed for the
conduct of official business of the House of Representatives?'
introducing the bill, Senator Frist remarked that, "At a time when everyone is
tightening their belts to balance the Federal budget and restore confidence in
our Government, it is only right that Members of Congress eliminate the perks
Senate Handbook. p. 11-55,
24 U.S. General Accounting Office,Office of the General Counsel, Letters from James
F. Hinchman, General Counsel to Senator Wendell Ford, Chairman, and Senator Ted
Stevens, Ranking Republican, Committee on Rules and Administration,
B-242607 (Washington: Feb. 5, 19911, 1 p.
25 U.S. Congress, Committee on House Oversight,Members' CongressionalHandbook
Regulations governing the Member's Representational Allowance of the U.S. House of
Representatives, 104th Congress (Washington: 1995), p. 52. (Hereafter refernd to as
2"ongre~~ional Record, daily edition, vol. 143, Jan. 28, 1997, p. S728.
and privileges that are not necessary to conduct congressional business."27
Similar legislation was also introduced in the 104th Congress.
In addition, H.Res. 64 would require that travel awards accrued through
official travel by a Member, official, or employee of the House be used only for
official travel. The bill was introduced in the House by Representative Thomas
Barrett on February 13, 1997, and referred to the Committee on House
Reconsideration of the Policy
The Senior Executives Association (SEA) asked the Comptroller General in
November 1991 to reconsider the executive branch policy on use of frequent
flyer bonus coupons.Z6The Comptroller General made no change in the policy.
The SEA Board decided not to pursue further action on the issue.2g
As background for that review: the General Services Administration (GSA)
prepared a discussion paper on the use of frequent flyer mileage which examined
five issues.30 With regard to the first issue, whether frequent flyer benefits are
government property or contract rights, GSA concluded that the coupons are
contracts between the carrier and the employee. GSA cited the decision in
Transworld Airlines, Inc. U. American Coupon Exchange, which held that
frequent flyer coupons are rights in contract and that their use and
transferability are subject to the contract's terms and condition^.^' As to the
second question, "If frequent flyer points reflect contractual rights, can the
Government influence the Federal employees exercise of those rights?," GSA
noted that the government may have no enforceable rights under the contract
if it is determined that frequent flyer coupons represent personal contracts
between government employees and the airlines. A third question examined was
whether a de minimus rule might apply to frequent flyer points. GSA
questioned why gifts under $25 do not violate the prohibition against
supplementing an employee's salary while mileage points, likely worth less than
$20 per ticket, constitute an illegal augmentation of salary.
With regard to a fourth issue, GSA reasoned that frequent flyer points may
belong to the employee if accrued incident to travel during off-duty hours. The
agency cited the Comptroller General's advice in Panama Canal Commission
that employees should maintain separate accounts for personal travel and
Ibid, p. S727
Memorandum to The Honorable Charles Bowsher, Comptroller General, from G.
Jerry Shaw, General Counsel, Senior Executives Association (Washington: Nov. 18,
19911, 8 p.
Telephone conversation on February 1, 1996 with Mr. Ted Karns, Issue
Coordinator for the SEA.
30 U.S. General Services Administration, Office of General Counsel, Discussion Paper;
Use of Frequent Flyer Mileage (Washington: Mar. 1992), 6 p.
official travel, or adequate records of such distinction, so as to protect their right
to use frequent flyer credits.32 The fifth issue GSA examined was whether
frequent flyer points may be indistinguishable from other incidental travel
benefits that employees may retain because GAO has decided they do not result
directly from performing official business. GSA cited a 1990 Comptroller
General decision that rebates issued for accumulated purchases on an
employee's personal credit card are not directly related to official travel and can
be retained by the employee.33
Frequent flyer benefits may be used to upgrade airline accommodations for
purposes of official travel. This policy is implemented through Comptroller
General decisions and executive and legislative branch regulations and judicial
In 1984. the Comptroller General ruled that there was no reason items such
as free upgrade to first class, membership in executive clubs, and check-cashing
privileges could or should be turned over to the government; employees,
therefore, were allowed the use of such benefits because denying them such
would serve no purpose.34 An employee who enters a promotional program and
receives a nontransferable free upgrade to first-class service may use such
benefits since the Government has no use for such benefits.35 Three years
later this policy was clarified (discussed below).
A September 1986 General Accounting Office (GAO) report on the use of
airline bonus awards by Agency for International Development (AID) employees
found that AID employees had not acted improperly in redeeming mileage for
accommodation upgrades without specific AID approval. GAO noted that "GSA
may want to consider clarifying on a governmentwide basis the rules for
redeeming accumulated mileage for benefits offered incident to frequent flier
The Comptroller General clarified his earlier decision in 1987. He stated
that the 1984 decision had dealt only with "free" accommodation upgrades and
other promotional benefits which could have no value to the government and did
not specifically address the redemption of mileage credits for program benefits
Panama Canal Commission Decision.
33 U.S. Comptroller General of the United States, Use of Discouer Charge Cards, B236219 (Washington: May 4, 19901, 1 p.
34 U.S. Comptroller General of the United States, Matter of: Discount Coupons and
Other Benefits Received in the Course of OffLcialTmuel, 63 Comp Gen 229-235, B210717 (Washington: Feb. 24, 1984).
35 U.S. Comptroller General of the United States, Matter of:
Frydman-Bonus Travel Coupon, B-212559, Unpublished (Washington: Feb. 24, 1984).
36 U.S. General Accounting Office, Frequent Fliers Use of Airline Bonus Awards by
AID Employees, GA0,NSIAD-86-217(Washington: Sept. 1986),p. 17.
such as accommodation upgrades. He reiterated that the rule prohibiting
government employees from converting airline promotional items earned on
official travel to their personal use also applies where a n accommodation
upgrade is obtained in exchange for bonus mileage credits. The Comptroller
further ruled that employees must account for all mileage credits and may not
exchange them for accommodation upgrades or other benefits absent
authorization or approval. He stated, however, that "GSA could amend its
regulations to permit redemption of airline mileage credits to upgrade
government purchased tickets to first class as part of a plan to maximize the
integration of these incentive programs into agency travel plans."37
Use of frequent traveler benefits t o upgrade airline accommodations is
~ ~ use of premium-class other than first-class
permitted by GSA r e g ~ l a t i o n .The
airline accommodations may be authorized or approved when obtained as a n
accommodations upgrade through the redemption of frequent traveler
benefit^.^' "Premium-class other than first-class airline accommodations" is
defined as any class of accommodations between coach-class and first-class, e.g.,
The Attorney General, however, has determined that
Department of Justice employees must use frequent flyer benefits to offset travel
costs and not for premium class upgrades?'
Frequent flyer credits may not be used for upgrades to first-class airline
accommodations by Department of Defense personnel. They may be used for
upgrades to premium-class-less-than-first-class (e.g.: business class). If there is
no premium class other than first class, the credits may not be used for airline
upgrades at all.42
" U S . Comptroller General of the United States, Matter of: Michael Farbman, et
al.-Personal Use of Airline Promotional Material, 67 Comp Gen 79-83, B-220542
(Washington: Nov. 16,1987). Robert Heitzman, Senior Attorney at GAO, in a telephone
conversation on February 12, 1996, said that the GSA regulations, cited above, were
written to allow use of frequent traveler benefits to upgrade to premium-class other than
381ngeneral, reimbursement for actual transportation expenses up to the lowest firstclass rate (with certain exceptions) is allowed by 5 U.S.C. 5731.
41 CFR 301-3.3(d)(5)(vii).
40 41 CFR 301-3,3(d)(Z)(ii)-(iv). The regulations define "Premium-class airline
accommodations" as any class of accommodations above coach-class, e.g., first-class or
business-class. "First-class airline accommodations" means the highest class of
accommodations on a multiple-class commercial air carrier.
U.S. Dept. of Justice, Attorney General, Memorandum for Heads of Department
Components, Travel Management (Washington: July 2, 1993).
42 U.S. Dept. of Defense, Office of the Undersecretary of Defense For Acquisition and
Technology, Defense Transportation Regulation Part I Passenger Movement, DOD
4500.9-R Washington: Aug. 1995),p. 102-11.
The regulations are restated in the Joint Federal Travel Regulations (JFTR)which
cover the uniformed military and the Joint Travel Regulations (JTR) which cover DOD
civilians. See: U.S. Dept. of Defense, Joint Federal Travel Regulations, Part D: Gifts,
Gratuities and Other Benefits Received From Commercial Sources Incident to
As to judicial branch employees, frequent traveler benefits may be used to
upgrade to business- or first-class accommodations. Bonuses such as free or
upgraded tickets and lodging obtained by redemption of frequent flyer mileage
and lodging points accrued on official travel may be used for other official travel
with no restrictions. They cannot be used for personal, unofficial (including
spousal) travel or for upgrades associated with such t r a ~ e 1 . 4 Free
(where frequent flyer mileage account is not reduced) to first class: membership
in executive clubs and check cashing privileges need not be turned over to the
government and may, therefore, be used by the employee.44
In the Senate, regulations prescribed by the Committee on Rules and
Administration do not address accommodations upgrades except to state that
"any other promotional materials earned as a result of trips paid for by Senate
funds are the property of the government and may not be converted to personal
use."45 In the House of Representatives, Members or their Clerk Hire
employees may use upgrades earned as a result of official travel at their
discretion. However, "The Committee on House Oversight encourages the
official use of these travel promotional awards wherever practicable."46
Frequent Traveler Programs
Executive Branch Agencies
The General Services Administration has not tracked and has no effective
method to track frequent flyer bonus mites throughout the U.S. government,
and has not made any calculation as to the potential government-wide savings
of frequent flyer bonus coupons.47 GSA was required by P.L. 103-355to report
to Congress on efforts to promote the use of frequent traveler programs by
federal employees and submitted its report in October 1995.48 In letters
Performance of Official Travel, C1200 Requirements for Promotional Items to be
Relinquished to Government (Washington: Oct. 1, 1995), p. ClD-1. U.S. Dept. of
Defense, Joint Travel Regulations, Chapter 2 Administration and General Procedures,
Part A: Travel Policy, U2010 Member's Responsibility (Washington: Aug. 1, 19951, p.
43 U.S. Administrative Office of the United States Courts, Memorandum to A
United States Judges Use of Frequent Flyer Bonuses and Other Discount Trauel Options,
(Washington: Aug. 20, 1991), 4 p.
44 U.S. Administrative Office of the United States Courts, Guide to Judiciary Policies
and Procedures, Volume I, Chapters I-VI, Section 4.4.
Senate Handbook, p. II-18
House Handbook, p. 52.
Telephone conversation with Gary Goode, GSA, January 8, 1997
48 U.S. General Services Administration, Report to Congress on Federal Agency
Frequent Flyer Programs, (Washington: Oct. 13, 19953, 46 p. (Hereafter cited as GSA
submitted to the President of the Senate and the Speaker of the IIouse of
Representatives, GSA stated that "frequent traveler programs are being
promoted in the Federal community." According to GSA:
Most agencies are utilizing Government-wide travel policies and/or their
respective guidelines. Other agencies are more aggressively encouraging their
employees with cash award incentives. In all the responses, agencies are
making the Government travelers aware of the frequent traveler benefits and
how important this program is in saving the individual agency and the overall
Government critical travel d~llars."~
Einety-eight federal agencies were surveyed by GSA, 67 of which responded.
Procedures instructing and encouraging employees to utilize frequent traveler
benefits were reported by 40 agencies. Twenty-seven agencies do not have their
own procedures, but rely on GSA regulations. The Interstate Commerce
Commission, Panama Canal Commission, U.S. Government Printing Office, and
U.S. Merit Systems Protection Board reported to GSA that they were proposing
procedureslincentive programs. Frequent flyer programs at five agencies were
highlighted in the GSA report as follows.50
The Department of Education has a pilot program, Travel Savings
Shared Benefit Program, under which employees are rewarded for
saving the agency money, through their own efforts, while on
official temporary duty travel. Employee participation is optional.
The amount of an award to an employee is 50% of the savings on
lodging expenses and the contract carrier airfare. The savings to
the agency must be $400 before an award can be granted. The
minimum award that can be granted is $200. Awards are processed
semi-annually in March and September. The program will be
evaluated to determine whether savings and benefits merit
The Department of Justice has a gainsharing program under which
employees receive cash awards for savings in official travel, achieved
through their own initiative. The amount of an award to an
employee is 50% of the total savings for both frequent flyer airfare
and lodging. The savings to the agency must be $200 before an
award can be granted. The minimum award that can be granted is
$100 and the maximum annual award is $1,000. The awards are
paid once a year, a t the end of the fiscal year in which the savings
e The General Services Administration has a Travel Savings Cash
Awards Program under which employees are rewarded for saving
the agency money, through their own efforts: while on official
49 Letters to The Honorable Albert Gore, Jr., President of the Senate and The
Honorable Newt Gingrich, Speaker of the House of Representatives transmitting the
GSA Report, October 13, 1995.
GSA Report, Enclosure one.
temporary duty travel. Employee participation is optional. The
amount of an award t o an employee is 50% of the savings on lodging
expenses and the contract carrier airfare. The savings to the agency
must be $200 before an award can be granted. The minimum award
that can be granted is $100. Awards are paid at the end of the fiscal
The National Transportation Safety Board has an employee
incentive program under which "supervisors can recommend awards
for employees who are particularly creative or effective in saving the
Government funds through participation in" promotional programs
which benefit the government.
e The Bonneville Power Administration has a Frequent Flyer
Incentive Program under which employees are rewarded for saving
the agency money while on temporary duty travel. Employee
participation is optional. Employees who receive a free coach class
ticket with frequent flyer benefits earned on official government
travel or personal travel are eligible to receive 50% of the savings.
General Accounting Office
A division within the General Accounting Office (GAO) is participating in
a pilot program which enrolls employees in airline frequent flyer programs. Any
resulting benefits will be pooled for the use of all employees participating in the
pilot project. GAO has a contract with American Express to manage the travel
of its employees worldwide." GAO's Boston regional office, comprised of 71
employees, has used a frequent flyer program since 1991." Employees most
frequently fly on Northwest Airlines and U.S. Air. In cooperation with these
airlines, frequent flyer applications were completed by all employees. The
address of the Boston regional office was entered onto the applications by GAO.
All employees signed applications and were assigned frequent flyer numbers.
GAO administrative staff provided the travel agency, American Express, with
frequent flyer numbers for all employees. When American Express makes
reservations for employees, it provides Northwest Airlines or U.S. Air with their
frequent flyer numbers. Monthly summary statements are sent by the airlines
to the office. Whenever a traveler has reached the 25,000 mile threshold
required for a free ticket, Northwest Airlines issues an actual ticket and U.S. Air
issues a notification. The GAO administrative staff keep these tickets or
coupons in a secured area.
Tickets or coupons are used to pay for travel over $400 on Northwest
Airlines or U.S. Air flights, when available. Employees who earned the tickets
or coupons endorse them, as required by the airlines, but other employees may
actually use them. Northwest Airlines and U.S. Air permit the Boston office to
'' Telephone conversation with Ralph Bucksell, General Accounting Office,January
j2 Facsimile to CRS from Ellen Massarsky, Administrative Officer, GAOBoston,
January 8, 1997.
use the tickets in this manner. Tickets or coupons have expiration dates and
they are used in chronological order. A GAO manager conducts a monthly
review of 10% of the summary sheets to ensure that employees have not flown
on official government business using their personal frequent flyer accounts.
GAO attorneys reviewed the program which requires minimal administration
before it began.
The Joint Financial Management Improvement Program (JFMIP) published
a report on federal travel management in December 1995.58 None of the
report's nine recommendations on temporary duty travel specifically addresses
the issue of frequent flyer bonus coupons, but its recommendations on
automating and auditing travel data could impact upon the issue. The JFMIP
recommended that travel data be consolidated and automated; GSA would
identify and define the standard data elements; and data collection and retention
would be consolidated in a single automated repository. Cost savings of $88.1
million were anticipated. The JFMIP report also recommended that auditing of
travel data be done by statistical sampling: it noted that currently, numerous
agencies audit 100% of all travel vouchers, an inefficient and costly procedure.
GSA would modify its travel regulations to allow for statistical sampling.
JFMIP observed that sampling techniques could be enhanced by integrating
travel software with an agency's financial management system. Cost savings of
$28.4 million were anti~ipated!~
An additional recommendation in the JFMIP report was that use of the
government-issued charge card be required for all travel-related expenses. Cost
savings of $62 million dollars were anticipated!'
Travel and Transportation Reform Act o f 1997
H.R. 930, which addresses this recommendation, was passed by the House
on April 16, 1997. The bill, introduced by Representative Stephen Horn,
requires use of the federal travel charge card for payment of all official
government travel expenses to the maximum extent practicable. It authorizes
the government to collect the financial information needed to verify that charges
on the card are business related. Employees whose charge payments are
overdue will have the delinquent amounts deducted from their paychecks.
53 U.S. General Accounting Office, Joint Financial Management Improvement
Program, Improving TraueZManagement Gouernmentwide (Washington: Dec. 1995),48
p. (Hereafter cited as JFMIF' Report.)
JFMIP Report, pp. 6-7, 19. The report recommended required use of the
government charge card for relocation travel as well. Cost savings of $4.13 million were
anticipated. (pp. 23, 43.)
The legislation also establishes requirements for prepayment audits of
federal agency transportation expenses to verify that charges are correct. GSA
estimates that this will save $50 million per year. It authorizes reimbursement
of federal employees for taxes incurred on travel or transportation
reimbursements as a result of enactment in 1992 of P.L. 102-486,which limited
the income tax deduction for business-related travel. Up to 10 programs testing
methods for paying travel and relocation expenses would be authorized for up
to 24 months by H.R. 930. GSA would submit proposals for the projects to the
appropriate committees of Congress at least 30 days before their effective dates.
The authority to conduct test programs would expire 7 years after the
enactment date of the legislation.
In House debate prior to the passage of H.R. 930, Representative Horn
stated that "administrative costs [for travel] are shockingly bloated. The cost of
completing a travel voucher is about $15 in the private sector, while it can run
as high as $123 for each voucher in the Federal G ~ v e r n m e n t . " ~ ~ u r t b e r ,
according to Mr. Horn, the legislation is needed because:
"Agency managers simply do not have complete travel information
available to them because of inconsistent payment methods. As a
result, it is impossible to effectively analyze their travel budgets in
order to locate waste and reduce costs."
"Related agencies are often unable to verify that travel charges are
business related. They need clear authority to obtain information
regarding the credit cards issued to employees for official
Rebates due to the federal government will be increased and the
processing of travel reimbursements will be expedited.
Many federal employees were liable for a lump sum tax payment,
including penalty and interest charges, i n some cases exceeding
$1,000, as a result of the 1992 law. H.R. 930 would reimburse
federal employees who paid the taxes in 1993 and 1994. The
reimbursement would cost $4 million on a one-time basis, according
"The sections of the U.S. Code relating to travel are extremely
prescriptive and limit agency flexibility in developing improved
Representative Carolyn Maloney stated that she would like to see one of
the pilot programs grant discretionary authority to an agency to fund
employment assistance services for the spouse of an employee relocated to
another duty station by the agency.58 Such authority had been included in
Congressional Record, daily edition, vol. 143, Apr. 16, 1997, p. H1574
H.R. 3637, which was marked up in the 104th Congress, but saw no further
action. The JFMIP had also recommended that such assistance be provided.
Costs of $5.9 million were anti~ipated.~'
The Congressional Budget Office estimated that H.R. 930 would result in
cost savings of $105 million over the next 5 years, 1998-2002. The savings
would be partially offset by the anticipated five million dollar cost to reimburse
employees for tax payments. The $105 million total is comprised of expected
cost savings of $65 million through pre-payment audits and $40 million through
required use of the government travel charge card. With respect to the latter,
the money is expected to come from rebates. "GSA's current contract provides
that American Express rebate back to the federal government an amount equal
to 0.65% of the dollar value purchased with the travel card."6o
The frequent traveler programs highlighted in this report include
procedures for measuring their results. Up to 10 programs to test federal travel
and relocation payment practices would be authorized by H.R. 930. The findings
of these various programs will help to determine the future directions of federal
government travel policies.
''JFMIP Report, pp. 39, 43
60 U.S. Congressional Budget Office, Cost Estimate; H.R. 930 Travel and
Transportation Reform Act of 1997 (Washington: Apr. 14, 19971, 7p.