Page 13 - Final_AS-REP Citi 2012 v5

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S ec t i on I I : T ran s portat i on S p end Managemen t Cha l l enge s i n t he Gov ernmen t S ec tor
Transportation Management in the Federal Government
| Best Practices Report: 2012
11
Carriers working with the DOD are very familiar with the perils of
fragmented regulations. Each military service branch has a different
clearance and screening practice for carrier drivers entering their
installations. This requires Defense industry drivers to have different
badges and clearances just to get in the gate.
Regulations will always impact an agency’s ability to do business, and
lacking an internal audit of those regulations and processes means some
impediments to transport are not removed. Agencies without the policy
or manpower to look over regulations on a consistent basis may be
doing themselves harm by shrinking their carrier pools through unnec-
essary burdens, which will inevitably create higher costs and less optimal
transportation networks.
Further, regulation is not always a bad thing. This report will take a
hard look at the federal governments auditing requirements and show
that in certain cases these mandates offer the opportunity to innovate
and create positive change.
OB L I GAT I ON O F F UNDS
Federal government agencies budget for transportation expenses
differently than their private sector peers and often the practices vary
between agencies. Our investigation does point to one common method
where agencies allocate funds for transportation expenses, hold it in a
single account, and then draw from it on a shipment-by-shipment basis.
While the way funds are obligated has little impact on the way systems
are used, the differences highlight the gap caused by the lack of an
integrated system for reporting information. Agencies tend to select
how they allocate funds based on their overall needs and transport uses.
This means agencies of similar operations may collect data that can be
compared to each other, but it often leaves information gaps that
prevent comparing transport spend across these clusters.
CON T RAC T BUND L E S L I M I T V I S I B I L I T Y
For many agencies, transportation spending is bundled into contracts,
creating a barrier to true visibility to transportation costs. Bundling
allows carriers to keep costs from appearing high, but there’s not enough
available information to determine if agencies are paying too much.
While the practice can make it easier for bids to be made and contract
agreements reached, agencies are doing themselves a disservice by not
requesting their contractors and carriers to break out and clearly define
transport costs through itemized invoices.