Fallout From a Government Meeting Scandal

The trouble started in October 2010, when the General Services Administration, which oversees the business of the federal government, flew 300 people to the M Resort Spa Casino in Las Vegas for its Western Regions Conference. The total tab for that event topped $822,000. Subsequent scrutiny into the practices at the GSA uncovered more questionable spending, leading Martha N. Johnson, the agency's chief, to resign in April.

Since that initial scandal came to light, President Obama has put his signature on a number of executive orders, severely curtailing the travel and meetings budgets for government agencies. These measures have altered planning practices for federal meeting professionals, third-party firms handling their events, and employees looking to attend nongovernment business meetings.

Here is a look at the far-reaching ramifications of what has become known in some circles as the "GSA effect."

From the White House In June 2011, President Obama started tightening the screws with Executive Order 13576, "Delivering an Efficient, Effective and Accountable Government," which outlines ways to make spending more transparent and clarifies the fiscal roles of various government executives in containing costs.

This was followed in November by Executive Order 13589, "Promoting Efficient Spending," which got down to the nitty-gritty, requiring government agencies to cut spending by at least 20 percent below fiscal year 2010 levels on travel, extraneous promotional items, printing and more. According to the Office of Management and Budget, these efforts have identified $8 billion in reduced costs for FY2013, but for government meetings, the result has been cancellations and confusion.

"It's a lot more chaotic in those departments," says Katie Herritage, CMP, CSEP, a corporate planner and former federal contractor in Northern Virginia. "Government planners have had the brakes put on. They are reconciling what they can, canceling contracts and halting orders. A lot of agencies are getting their lawyers more involved to get out of contracts."

This past May, an OMB memorandum further outlined how costs will be cut, specifying that in FY2013, each agency will be required to spend at least 30 percent less on travel than in FY2010, and agencies must maintain that spending level through FY2016. The memorandum also addressed government conferences, requiring senior-level review and approval of spreadsheets for all upcoming conferences sponsored or hosted by federal agencies that exceed $100,000, and prohibiting expenses of more than $500,000 on any single conference, among other actions.

Herritage, who conducted a seminar at Meeting Professionals International's World Education Congress in July on the changes facing federal planners, says, "Many government planners are encountering issues and requirements never seen before. For them to now be canceling events and doing more strategic planning is a personal and organizational challenge."

For those toughing it out, Herritage offers some suggestions for coping with the new restrictions.

• Find out how your agency is dealing with the new mandates, whether it's fewer, shorter, smaller or less elaborate meetings.

• Expect to spend more time on requests for proposal. "If you have 100 events a year where you used to send one to three RFPs, the most you would get is 300 to vet. If you're mandated now to send out more, you don't have more events, but you have so many more RFPs to review. It makes more work for the planner and the hotelier," says Herritage.

• Be prepared to cut ancillary spending, such as giveaways or even F&B, if there are enough reasonably priced outlets nearby. "I'm having to look for venues where my attendees can go outside of the hotel," says Audrey L. Steidl, of Steidl Site Services, who is a director of global accounts for third-party HelmsBriscoe. "Or, I'm looking [to provide] a half-sandwich and a cup of soup for the attendees, just something."

• Start planning earlier, because there are so many more hoops to jump through to get an event approved.

• Use webconferencing whenever possible.

The bottom line, says Herritage: Be prepared to do more work.

In light of the federal crackdown on travel and meeting funds, the Society of Government Meeting Professionals is focusing on helping its members learn to work within the restrictions, because this seems to be the new status quo.

"We are experiencing a fundamental paradigm shift in our industry due to the 2011 executive order requiring a 30 percent decrease in federal travel expenses," said Rob Bergeron, SGMP's acting executive director. "We also understand that significant scrutiny for government meetings will continue in the near term until appropriate spending levels have been established."

The Outside World Not only does the cutting back affect government events, it also has an impact on events federal employees attend.

For example, conferences put on by the Institute of Food and Agricultural Sciences, part of the University of Florida, typically attract scientists, engineers, policy makers, planners, academicians, company representatives and government agency representatives. "As my boss says, you can't put scientists in a cubicle 52 weeks of the year," says Beth Miller-Tipton, CMP, CGMP, director of the UF/IFAS Office of Conferences and Institutes in Gainsville, Fla. "Conferences are how information is exchanged."

As the federal government restricts who can attend such events, Miller-Tipton adds, that has a negative impact on overall conference numbers beyond the restricted cohort, as those who normally come to the conference to interact with agency representatives might now have less reason to attend.

"And if no more than 25 or 50 people in any government organization can attend, it's very hard to prioritize whose information is most important," Miller-Tipton says. "As a citizen, I hate the fact that an accountant is deciding who is allowed to attend a conference. Who is the accountant to decide what kind of science is important and what is not?"

The government's scrutiny on meetings also renews perception problems, similar to those experienced by all meeting professionals during the recent economic downturn. Any property with the word "resort" in its name is frowned upon, forcing federal employees to choose limited-service properties and potentially adding transportation costs.

The phenomenon affects corporate meeting professionals, too, who hope to keep their events out of the limelight. "You've got a lot of corporate planners saying, if this is happening in the government, this could happen to me," says Herritage. "You have to keep your goals and objectives in mind while shaping a conference, cutting the 'fluff' and keeping things black and white."

The Third-Party View In the investigations into the GSA's actions, independent planners were made scapegoats for some spending excesses, resulting in a call to limit the use of third parties. This loss of business is forcing independents who relied on government work to shift their priorities.

For Anne Hallinan, CMP, who runs Marrone-Hallinan Event Management in Springfield, Ore., government meetings used to take up about 25 percent of her time. "I had contracts with two government agencies," she says. "After managing a successful annual conference in 2010 for one of them, I was the winning respondent for a series of additional meetings. Before contracts were signed, the agency had their funding pulled and all that education -- and work for me -- disappeared." It has taken her more than a year to replace that business with other organizations and some corporate work.

"I wish that what has happened had not put a black eye on third-party planners," says Miller-Tipton of IFAS. "Many know what they're doing, they optimize pricing, they minimize costs. They free federal employees up to do the jobs they were hired to do in the first place."

As the country rolls up to November's election, it's possible that a new administration will be affecting these issues come January. But while no one expects the restrictions to go away, government meetings still will have to go on, if in an altered form. For SGMP, that means educating all who will listen about the good those events do. "SGMP will continue to prioritize our education mission to support the significant and positive role that government meetings and training play in the overall U.S. economy," said acting director Bergeron.

Rethinking the Per Diem

The GSA is charged with setting per diem travel and lodging rates for government employees, and the agency decided this summer to re-evaluate its methodology for setting those rates. To the relief of the hotel community, the GSA has chosen to freeze current rates for fiscal year 2013 (which go into effect this Oct. 1).

The Society of Government Meeting Professionals applauded that decision, since "a rate decrease would have potentially resulted in the unintended consequence of driving up the costs of government meetings," said SGMP president Rob Coffman, who is the deputy director of the office of conference, event and meeting services for the U.S. Department of the Treasury.

Audrey L. Steidl, who runs Steidl Site Services in San Diego and is a director of global accounts for HelmsBriscoe, feels rates already are absurdly low in some markets. "Government meetings require full-service hotels," she says. "They need meeting space, they need A/V, all the usual things."

Hard negotiating has had to come into play: Not long ago, Steidl had a large group contracted for a San Diego property, where the negotiated rate was more than 25 percent above the per diem limit, and people were looking outside the host hotel for rooms. "I got the hotel to meet the per diem," says Steidl. "But I really don't know how hotels can make any kind of living from government business."

One hotelier who wished to remain anonymous told M&C, "Lowering per diems is not the answer. How about holding accountable those people who do wrong when it comes to meetings and abuse their positions? Seriously, 95 percent of all government meetings are so above reproach, and they watch everything very closely."