Northrop Defends Its Pentagon Travel System as Secure and Cost-Effective

Northrop Grumman Corp. responded to critics of its online travel service for Pentagon employees Thursday, saying the system was secure and cost-effective.

The Defense Travel System has been criticized by private and government watchdogs as behind schedule and over budget, approaching $500 million in costs. The system, originally scheduled to be in place by 2002, is intended to provide secure travel for Defense Department workers while saving money.

Switching to the ETravel service used by other government agencies would result in extra costs of as much as $65 million a year and compromise security, Northrop said. The Defense Travel System, now used by more than 680,000 uniformed and civilian Pentagon employees, will save $56 million a year when fully deployed in 2007, the company said.

“The company also emphatically disputes the accuracy of recent statements and mathematical calculations being used to misrepresent the system’s benefits,” Northrop said, alluding to assertions by unidentified critics that each transaction would cost $1,500.

The system is inefficient and being used only at about half of the Defense Department’s 11,000 locations, Sen. Norm Coleman (R-Minn.), chairman of the Senate Permanent Subcommittee on Investigations, said after hearings on the program Sept. 29, citing data from Century City-based Northrop.

Northrop said the cost of the contract was $263.7 million, the same as when it won the award in 1998, of which it has collected about $244 million. The total cost of the program to the government has fallen to $474 million, from the 1998 estimate of $492 million, the company said.

Thomas Gimble, acting Defense Department inspector general, said last week that he had launched an audit of the system to address Coleman’s concerns. The inspector general’s office had criticized the program in 2002 as unlikely to achieve the expected cost savings.