Article

Telematics Implementation in the Federal Fleet

October 2017, Government Fleet - Feature

by Thi Dao - Also by this author

In March 2015, President Barack Obama signed an executive order that set sustainability goals for federal agencies. Executive Order (EO) 13693, Planning for Federal Sustainability in the Next Decade, includes goals to improve fleet and vehicle efficiency, and within that is an order to deploy telematics for all new passenger, light-duty, and potentially medium-­duty vehicle purchases. The deadline was set for March 2017.

Data from the 2015 Federal Fleet Report shows the federal fleet consisted of more than 640,000 vehicles worldwide. More than 596,000 of these fall under the passenger and light- and medium-­truck category. The executive order only applies to new vehicle purchases, and in fiscal-year 2016, the U.S. General Services Administration (GSA), which procures vehicles and provides fleet management services to federal agencies, purchased about 53,000 vehicles. However, of these vehicles, only passenger, light-duty, and medium-duty vehicles are included, and law enforcement, protective, and emergency response vehicles may be exempt.

Compliance with this executive order is spotty — and hard to determine. Telematics providers say implementation has been slow because many fleets are waiting to see if President Donald Trump cancels the order altogether. Meanwhile, other fleets are more enthusiastic about telematics and have used safety and fleet reduction to justify their investments.

At a Glance

Federal fleets are in varying degrees of telematics deployment:

  • Veterans Affairs has more than 7,000 vehicles with telematics
  • The Dept. of Energy has been using telematics since 2011
  • The Dept. of the Interior decided not to deploy telematics.

Varying Stages of Deployment

Most agencies are in various stages of deploying fleet telematics, according to the GSA. Those that have the most experience with fleet telematics include the Departments of Energy, Health and Human Services, Homeland Security, Marine Corps, and Veterans Affairs.

The Department of Energy reported having 1,318 vehicles currently equipped with telematics from four service providers. Some vehicles have had them since 2011, and telematics has been used to improve operations, safety, and data collection. The department plans to continue telematics deployment where they are determined to be cost-effective and beneficial.

The Department of Veterans Affairs (VA) has approximately 7,025 vehicles currently installed with telematics out of a fleet of about 20,000 (2015 data). The department has been installing telematics in its vehicles for the past 10 years and has used 10 different suppliers. However, it’s now changing how it procures its telematics services — in 2016, the Supreme Court upheld the Vets First Act, meaning the VA must now procure telematics from a veteran-­owned small business if least two such businesses can provide them at a reasonable price, according to a VA spokesperson. The agency plans to continue to acquire telematics at the local level.

While these two departments have committed to vehicle tracking, the Department of the Interior has a different plan. The agency is one of the largest civilian federal fleets, and it includes 17,400 light-duty vehicles and 13,900 medium-duty vehicles. It conducted a 60-day telematics pilot with 95 vehicles and calculated a return on investment (ROI) of eight to nine years. Department staff analyzed cost factors including purchasing, installation, service and mobile data fees, changing devices, employee training, and report data monitoring, and made the decision that telematics was “not a good business decision,” a spokesperson said.

The department instead plans to use its resources to procure zero-emission vehicles and plug-in electric vehicles to replace aging sedans and station wagons over the next three fiscal years.

The U.S. Army is currently working with the GSA on acquiring telematics devices for its non-tactical vehicles and hopes to incorporate a percentage of vehicles with devices beginning in FY-2020, an Army spokesperson said. The vehicles will be chosen based on their mission and availability of funds.

Calculating Return on Investment

Why do return on investment (ROI) calculations differ? ROI depends on fleet size and use, as well as what problems the fleet opes to solve. What's also important are the factors included when calculating ROI, and some are more difficult to determine than others. Factors to consider when calculating ROI include:

Costs

Benefits

Initial device costUtilization
InstallationReduced vehicle count
Service and mobile data feesFuel efficiency
Changing devicesSafety/driving behavior
Employee trainingMaintenance management
Report data monitoringVehicle tracking/routing

Justifying Cost

Although the Department of the Interior couldn’t justify telematics deployment due to costs, the Department of Energy has, at least at one of its sites. The DOE doesn’t track ROI across all 47 of its major sites, but it did see ROI at the Idaho National Laboratory. After installing telematics in 350 vehicles, the lab reduced its inventory by 49 vehicles. Other benefits include improved safety, fuel economy, and driver behavior.

The VA considers telematics to be a safety measure rather than a cost-­savings measure. Benefits have included vehicle tracking that ensures the safety of drivers and passengers, as well as identifying the location of disabled vehicles; informing drivers of driving conditions; using data as backup for accident reports; and minimizing idle times, maintenance, and repairs.

Budget is always an issue for any fleet implementing telematics. The GSA reported that pricing has improved in recent years, but justifying the cost has been a challenge. Other challenges include installations, device interchangeability across vehicle types, cyber­security, and acquiring actionable data that can be integrated into fleet management systems.

And budget instability may be worse now for federal agencies. Chris Jackson, vice president of government operations for BSM Technologies, which provides AT&T’s telematics service, said he was in talks with a federal department when that department’s general funding was unexpectedly cut, and talks about buying the new technology ceased.

The Fleet Component of EO 13693

In March 2015, President Obama issued Executive Order 13693: Planning for Federal Sustainability in the Next Decade. Fleet mandates for every federal agency with 20+ vehicles include:

  • Re-evaluate fleet inventory and eliminate unnecessary vehicles
  • Reduce fleet-wide per-mile greenhouse gas emissions from vehicles 
  • Deploy telematics on select new vehicles and use it as a fleet efficiency management tool
  • Ensure that zero-emission or plug-in hybrid vehicles account for 20% of all new passenger vehicle acquisitions by 2020
  • Plan for appropriate charging or refueling infrastructure.

Law enforcement, protective, emergency response, or military tactical vehicle fleets may be exempt.

A Potential for Expansion

AT&T Mobility holds the current blanket purchase agreement (BPA) with the GSA, allowing any federal agency to purchase GPS tracking or GPS tracking plus a vehicle diagnostics solution. However, agencies don’t have to purchase off this contract and may procure telematics from other sources.

In August, the Department of Homeland Security (DHS) signed a separate BPA for telematics that can also be used by any federal agency. Additional contracts like these provide more technology offerings, potentially easing telematics expansion within the federal fleet, said Bernie Kavanagh, senior vice president and general manager of North America large fleet and strategic relationships at WEX, one of the companies awarded the DHS contract.

The March 2017 deadline has passed, and all agencies are to add telematics to new vehicle purchases that fall under the specified categories. However, not all agencies have chosen to follow the EO. Can they just ignore an executive order, or take their time?

“[Agencies] take it as more of a strong suggestion,” said Jason Walker, vice president of sales for GPS Insight, which is currently conducting pilots with four separate federal agencies. “The ramifications of not following the order are generally unclear, which has caused many agencies to take a wait-and-see approach rather than diving right in to deploy telematics.”

And who will enforce an EO from the previous administration, one that industry professionals and federal fleet managers think may go away? However, whether or not the Executive Order stays in place, solutions providers are confident telematics will continue to expand within the federal fleet.

In Jackson’s experience, the EO pushed agencies to consider telematics, but “we haven’t seen that being a primary business factor in the decision-­making process,” he said.

Walker said some of the hesitance he’s seen in following the executive order is the amount of work that goes with it, including an efficiency audit. A telematics solution could easily pull all the necessary information into reports. He also noted that in pilots, many fleets see a return on investment in their first year of using the product, and ROI can be measured not just with a reduction in units and fuel use, but also safety.

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