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Happy That GSA Maintained Its Per Diem Methodology? Not So Fast

Last week, the U.S. General Services Administration announced that for the 2013 fiscal year it froze lodging and meal per diem rates at current levels. Though it had been examining the possibility of changing the methodology for determining per diems__reportedly by removing upper upscale hotel rates from the equation and thereby significantly cutting lodging per diems in key major cities__it opted not to do so. Industry groups rejoiced. But that joy may be short-lived. Revising the methodology for future per diems is not off the table.

"Freezing the rates now was the most pragmatic approach that achieves significant savings while also allowing us more time to further evaluate the rates," according to a Wednesday blog post by GSA acting administrator Dan Tangherlini. The agency, he added, needs "more time to undertake a comprehensive review of the methodology used to determine those rates. We need better data to make sound decisions. The next step is for us to meet with experts through a federal advisory committee and develop a plan for the rates moving forward."

Though some industry constituents were pleased that hotel per diems for the upcoming fiscal year were not reduced, and they may outwardly welcome GSA's more "pragmatic" approach, you can be sure that any change in the methodology that lowers per diems will be met with some resistance.

Meanwhile, Tangherlini noted that by freezing rates for 2013__the first time the agency had done so "in more than a decade"__GSA will help federal agencies save about $20 million. He also explained that GSA recently "proposed to eliminate a policy that allows employees who attend a federal government sponsored conference to spend 25 percent above the per diem rate. Through this action, we will save approximately $9 million a year."