Current department of defense policy pays very high per diem rates for travel, particularly overseas. This proposal would incentivize staying below per-diem, often at culturally immersed local market facilities, by returning a portion of the money saved by staying below the per-diem cap back to the traveler. For example, if the lodging per-diem rate in Berlin is $300, but I find a German Gasthaus for $100, I would get some percentage (25% would be $50) of the savings as an incentive.
DOD personnel often have the opportunity to travel to countries of interest for conference, meetings, etc. However, current per-diem policy encourages them to stay in high-end generic hotel chains at the maximum allowable amount, as they are reimbursed for whatever the spend, no more or less, up to the cap. This has created a culture wherein even those who might want to save the government money, or who might want to have a more genuine cultural experience staying somewhere local are viewed as not 'team players' because they make others they are traveling with who do stay at full per diem 'look bad'.
In addition to saving the government money, this would encourage government travelers to learn about the countries and communities they travel in. Post-9-11 research and defense/intelligence community research has show that cultural skill sets and cross-cultural competency are some of the most foundational skills for analysts and operators alike in dynamic, population-centric operations. With much of America, and the world, not really understanding what it means to be a federal employee (we deploy same as the military, make sacrifices many know nothing about), the opportunity and incentive to interact with local communities, meet people and serve as federal ambassadors by patronizing local businesses rather than mega-chains would have gains far beyond the millions saved in otherwise wasteful TDY per-diem spending.