A Note to the Office of Management and Budget

By on June 27, 2010 in Current Events with 0 Comments

When Government employees need to drive on Government business, they frequently use their own cars, and are reimbursed at a rate of 50 cents per mile. The 50 cents is generous, even profitable, because vehicles already owned by employees are what is known as a "sunk cost" and operating these vehicles is a marginal cost.

 

Unless you have a 12-cylinder Ferrari, or equivalent, the marginal cost of using your own car is a good deal less than 50 cents per mile. This difference between cost and reimbursement is called profit.
 
So, with employees making a tidy profit driving their privately owned vehicles (POVs), and with vehicle ownership virtually universal, why does the Government still own and operate good-sized fleets of motor pool vehicles?
  1. The employee may not be able to use his own car, due to repairs, non-availability, or similar reasons.
  2. He may not have a car.
  3. Possibly he does not want to use his own car, for various reasons. 
The above are valid, of course. But the primary, far more important reason for having motor pools is simply that you cannot force an employee to use his own vehicle. This being the case, management has motor pools. The mission comes first. Even though it is costly to have motor pools, they ensure you will have a car and you will drive it.
 
Okay. The status quo makes sense and is justified. But is there a way out? Is there a way for management to require an employee to use his own vehicle? Yes, there is. Or at least there was.
 
Until about 20 years ago, Volume II of the Joint Travel Regulation (JTR) had a provision for a tool known as a "POV Commitment." If an employee chose to sign a commitment and accept the prevailing reimbursement rate, he could then be required to use his own POV.
 
Widespread use of POV commitments would have meant dramatic reductions in motor pools, with a commensurate net savings to taxpayers.
 
Unfortunately, a critical error was made in the regulatory guidance for POV commitments. This error meant commitments were doomed, and their use was soon terminated.
 
POV commitments could be resurrected, with the error corrected. Thousands of Government employees would be happy to sign, in order to have the known comfort and convenience of their own cars, and make a profit at the same time. Taxpayers would save money. Fewer vehicles would mean a greener environment. What’s not to like?
 
(Note. The author knows what the error was in the first incarnation of POV commitments. But to explain it at this late date would not be helpful. And management would not make the same mistake again, would it?)
 
This proposal does not, of course, have all the answers and details. It is actually an attempt to instigate a small but significant shift in thinking on the part of policy makers. Did it work?

© 2016 Robert F. Benson. All rights reserved. This article may not be reproduced without express written consent from Robert F. Benson.

About the Author

Robert Benson served 35 years in various Federal agencies, as both a management analyst and IT specialist. He is a graduate of Northwestern University.

Top