I have been working for the US Coast Guard for nearly 13 years now, and as an attorney I have a fair amount of work-related travel. We are required to book travel through a contracted travel agency (SATO), and each and every reservation costs $28.50. I am sure that this adds up to quite a lot agency-wide, and I suspect that other agencies have similar mandates.
My suggestion is that we abolish this requirement entirely, or at least reduce the requirement to use a travel agency to special situations, or instances when it is really needed.
In my experience, the VAST majority of the time, I could make my own travel arrangements directly online and it would be not only faster and easier, but also save the government that travel agency fee.
With the advent of internet commerce, I think that the travel agency industry in general is becoming somewhat of a dinosaur. It is just silly that I need to take the time to call the SATO agency, wait on hold for an often extended period, deal with agents who often do not even provide consistent of correct information regarding airfares, and are not particularly friendly or helpful in many cases. It is ridiculous that the government is paying for the privilege of doing this.
While I recognize that there is probably some perceived need to maintain control of the process, and that this goal is theoretically achieved by uniform use of the same travel agency, please note that there are other options. For instance, if you want to ensure that government employees use the correct government fare, you could simply require any airlines or rental companies that want to do government business to set up a separate website featuring only government fares. Then allow govt employees to make their own reservations directly, but only on these specialized website with the correct fares.