Government mandates, coupled with the recent GSA incident, will have a measurable impact on the meeting industry and herald changes that will extend beyond belt-tightening tactics.
This exclusive report by Katie Herritage, CMM, CMP, CSEP—who over the past 13 years has worked in conjunction with the U.S. Federal Government, including the Department of Defense, the General Services Administration and The White House—addresses government mandates and the their impact on the meeting industry. She is a member of the MPI Potomac Chapter.
As a result of the nation’s heightened focus on fiscal responsibility, federal government agencies are being required under Presidential mandates to become lean with respect to conferences, meetings and events. These enhanced regulations greatly impact the meeting industry, inside and outside of the Washington, D.C., beltway.
Executive Order 13576 indirectly impacts the meeting and event industry through reductions in spending on travel, administrative expenses, use of consultants and discretionary spending. Executive Order 13589 directly targets the industry with a call for reductions on spending related to the use of facilities, travel and promotional items, to name a few.
On June 13, 2011, U.S. President Barack Obama issued Executive Order 13576—Delivering an Efficient, Effective, and Accountable Government, and launched the “Campaign to Cut Waste.” This campaign identifies numerous areas of wasteful and inefficient federal spending and targets those areas for budget cuts. This will impact spending for meetings and conferences as travel, administrative expenses and discretionary spending were specifically mentioned.
| Join the discussion about government mandates and the meeting industry in our LinkedIn community. |
As a follow up to the concerns identified, Jacob J. Lew, director of the Office of Management and Budget (OMB) issued a memorandum to the heads of executive departments and federal agencies with the subject line “Eliminating Excess Conference Spending and Promoting Efficiency in Government.” This memorandum furthers the stance U.S. President Obama made within Executive Order 13576 and states that “agencies must report to OMB on the results of their review of conference-related activities and expenses.” These documents initiated the government’s action toward corralling federal spending on meetings.
On November 9, 2011, President Obama issued Executive Order 13589—Promoting Efficient Spending
, a mandate directly focused on “cutting waste in federal government spending and identifying opportunities to promote efficient and effective spending.” This order required all federal agencies to take swift actions to eliminate unnecessary or wasteful spending, encourage fiscal responsibility and institute greater accountability. This includes ensuring efficient spending on travel, finding alternatives to travel (e.g., teleconferencing and video conferencing) and hosting/sponsoring conferences in space controlled by the federal government, wherever practicable and cost effective. While these directives are aimed at federal government agencies, the effects will be felt throughout the meeting industry. The impacts of this mandate are beginning to surface and will resonate for years to come. The following article examines the federal meeting landscape and provides a comprehensive evaluation of what the meeting industry can expect as a result of the transitioning environment.
Executive Order 13589—Promoting Efficient Spending requires federal agencies to create and implement a plan for reducing their budgets by 20 percent below fiscal year 2010 levels for the combined costs associated with federal travel, employee IT devices, printing, motor vehicles and promotional items. Each agency was charged with devising its own plan based on the individual budgets and habits; therefore, the plans are neither universal nor transferable to other federal agencies. Here are five examples of how federal agencies are embracing the mandates:
- NASA FY 2013 Budget Request Executive Summary states that, “NASA has targeted savings through reductions to travel and relocation.” Specifically, NASA will be reducing face-to-face meetings and increasing the use of video conferencing as well as Web-enabled technologies.
- The National Science Foundation FY 2013 Budget Request to Congress states “in response to Executive Order 13589—Promoting Efficient Spending, NSF is planning to reduce spending by US$18.9 million in FY 2013.” The NSF plan identifies major savings as a result of reduced travel and increased telecommunications capabilities.
- The Department of the Air Force’s Fiscal Year 2013 Air Force Posture Statement indicates the department is expecting a total of $116 million in travel savings in FY13.
- According to the Health and Human Services Policy on Promoting Efficient Spending: Use of Appropriated Funds for Conferences and Meetings, Food, Promotional Items, and Printing and Publications, “The Department has developed new policies on the use of appropriated funds for conferences and meeting space, food, extraneous promotional items, and printing and publications. These policies support the Executive Order on Promoting Efficient Spending (EO 13589); the Executive Order on Delivering an Efficient, Effective, and Accountable Government (EO 13576); and Office of Management and Budget Memorandum on Eliminating Excess Conference Spending and Promoting Efficiency in Government (M-35-11). The policies also promote the Department’s commitment to comply with appropriations law and act in a fiscally responsible manner by minimizing our administrative costs to perform our mission critical functions in the most efficient, cost effective way.”
- According to the March 2012 issue of the Office of Acquisition and Logistics Management Newsletter, “[National Institutes of Health] shall conduct its meetings and conferences in space controlled by the Federal Government whenever practicable and cost effective.”
NASA, NSF, the Department of the Air Force, HHS and NIH represent a portion of the federal government. Regardless, these facts illustrate the tremendous impacts that will result from the mandates of Executive Order 13589.
The preceding information provides a brief examination of how the federal landscape surrounding the meeting industry will change considerably as reforms are implemented from agency to agency. This highlights the extreme measures the government is taking to improve fiscal responsibility and eliminate superfluous spending on travel, meetings/conferences and related collateral. The following sections identify what the meeting industry can expect as a result of the transitioning environment, including who will be impacted, the impacts and the anticipated timeframes for impacts.
| Read MPI President and CEO Bruce MacMillan's thoughts about the GSA story. |
Government planners are modifying existing plans to account for the mandates and budget reductions. Additionally, public sector planners who host meetings and conferences for government attendees must also reassess their plans. An enhanced focus on strategic planning with justification taking a more predominate role will be seen throughout.
“[Executive Order 13589] is going to cause government planners to become more strategic in their planning and align meetings with the mission and vision of the organization,” said government planner Deanne Davis, CMP, CGMP. “The days of planning meetings ‘just because’ are long gone. We must now show how this meeting fits with the overall business plan.”
These changes will directly impact suppliers. Airlines will see a reduction in travelers, and hotels—especially those in major government hubs, such as Washington, D.C., New York and San Diego—will see reduced occupancy and space usage. These will be the two largest sectors impacted by the budget cuts, but as mentioned previously, the industry as a whole will be impacted.
The government will greatly reduce, in some cases eliminate, spending for printing and promotional items. There will be shifts from face-to-face events to Web-based teleconferences. This will minimize the need for onsite requirements such as F&B, entertainment, swag, etc.
“The impact of Executive Order 13589—Promoting Efficient Spending is being felt throughout the government agency procurement arena,” said Al McDonald, managing partner of McGRAPHIXINC. “Now, within the government agency public affairs and procurement arena, the usage of marketing product to promote agency programs to the internal staff or externally to constituents has been banished.”
With time, the entire meeting industry will feel these federal mandates. Based on the enhanced regulations imposed on federal meetings, many believe the meeting industry will see a substantial loss of revenue from the government sector. Subsequently, this shift in revenue will cause a chain reaction, impacting prices for other industry sectors. Some financial impacts can be seen now; however, the major shift will be seen toward the end of the 2012 calendar year when government agencies implement and execute their 2013 budgets.
| Stay tuned to the WEC website for more information about sessions on ethics at this year's event. |
To further the impacts of the mandates, the recent GSA conference scandal brought to light many of the issues these mandates aim to address. The impacts of this scandal will resonate throughout the industry, heighten the focus on government meetings, and enforce the need for fiscal accountability. The government mandates, coupled with the GSA incident, will have a measurable impact on the meeting industry and herald changes that will extend beyond belt-tightening tactics. One+
Image (CC) kenteegardin
One+ April 2012