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Agencies have until end of year to appeal lodging per diem rates

Sep. 10, 2010 - 06:00AM   |  
By STEPHEN LOSEY   |   Comments
Federal travelers will receive less per diem for hotel expenses in 310 destinations beginning Oct. 1.
Federal travelers will receive less per diem for hotel expenses in 310 destinations beginning Oct. 1. (Staff file photo)

Federal agencies that think the fiscal year 2011 lodging per diem rates won't be sufficient for their traveling employees to find hotels in some areas have until Dec. 31 to appeal before the General Services Administration.

GSA on Aug. 30 announced that per diems would decline in some cases, sharply in 310 of the 378 so-called nonstandard areas, higher cost areas where feds most frequently travel.

This is the first time since GSA adopted a new method for determining per diems six years ago that so many areas decreased, said Jill Denning, GSA's per diem program manager.

Denning, speaking last week at a conference of the Society for Government Travel Professional, said that GSA will raise some per diem rates if federal travel managers make a convincing case that they are inadequate. Any revised rates would take effect April 1.

GSA will only review per diem areas when requested by federal agencies, not by hotel industry representatives. Denning said GSA has received no complaints from federal agencies, but has heard from upset hotel industry representatives.

"We really need to hear that there is an issue" before making a change, Denning said. "We are talking about the taxpayer dollar. And if we are going to raise the rates and use more taxpayer money, we want to see that there is a need to do that."

Many travel managers are still studying the new per diems and meeting with other managers throughout their agencies to find out where their employees travel most frequently, and whether the new per diem rates will cover their hotel expenses.

Agencies that want GSA to review per diem rates will have to report the ZIP codes for areas employees have had trouble traveling to, the names of hotels that will not honor the per diem rate, and how many times agencies had to approve expenses over the per diem rate or an employee had to go to another hotel and spend more on rental cars, taxis or other transportation expenses.

Hotel rates began falling sharply in October 2008, when the financial market collapsed and the nation plunged into recession. But the 2011 per diem rates are the first calculated with an entire year of post-crash hotel data from April 2009 to March 2010.

In 2010, per diem rates in 70 percent of nonstandard areas stayed the same or increased. The year before, 96 percent stayed the same or increased.

Starting Oct. 1, GSA also will apply the standard continental United States per diem rate to 28 metropolitan areas that previously had their own rates, such as Boise, Idaho; Green Bay, Wis.; and Flint, Mich. But Denning said GSA recognizes the past year has been unusually tumultuous and will review those 28 areas next year to see if they should be again given their own rates. GSA usually reviews the standard areas every three years.

SGTP Treasurer Scott Lamb, who also is director of Hilton Hotels' government division, said at the conference that the current method of setting per diem rates may not be reliable since the economic downturn swayed rates so deeply. He said the government may need to look at the "bigger picture" and suggested using a five-year average of hotel rates to set lodging per diems, or adding another factor to mitigate such large swings.

Denning suggested Lamb talk to the Office of Management and Budget to propose changes in methodology.

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