U.S. Transportation Command awarded a more than $7.2 billion contract that will completely change the way the Defense Department manages military moves.
TRANSCOM awarded the contract on Thursday to American Roll On Roll Off Carrier Group (ARC), located in Parsippany, New Jersey.
“DoD families are our north star and the reason we are making this change to the Defense Personal Property Program,” said Army Gen. Stephen Lyons, USTRANSCOM commander in a Thursday statement. “The contract was written by and for the military services, and addresses long-standing pain points DoD families have highlighted for years.”
The Global Household Goods contract puts one company in charge of overseeing hundreds of contractors helping with the more than 400,000 military moves conducted each year.
Right now, those duties fall to 42 separate government-managed shipping offices, each of which hires moving companies on a one-off basis each time a service member receives permanent change of station (PCS) orders. TRANSCOM said that decentralized system is “fundamentally flawed,” mainly because it doesn’t allow for long-term contracting relationships with movers, and gives the government few ways to hold them accountable for poor performance.
“We need to gain accountability of industry and we need to improve responsibility in the department, because it’s bifurcated today,” Lyons said in January. “At the end of the day, we want to create the right incentive structures so that during peak season, when most of the moves take place and capacity is depleted, we can increase the capacity to support peak-season moves. That’s our objective.”
The contract is supposed to cut back on accountability problems within the moving process. Some of those were illuminated in a DoD Inspector General report from earlier this year, which found 41% of shipments made by moving contractors and reviewed by the DoD IG were not delivered on time.
TRANSCOM and ARC will spend the next nine months integrating IT systems and processes. The first move under the new system will be conducted next February and ARC will be in charge of all of the domestic moves during the peak summer season of 2021. It will handle all domestic and international moves by the summer of 2022.
ARC partnered with a group of subcontractors to carry out the moves and will ensure at least 40% of domestic work flows down to small businesses.
“Small businesses are—and will remain—the backbone of this program,” said Rick Marsh, director of the defense personal property program at USTRANSCOM. “If a company delivers a quality product in today’s program, there is room for them in tomorrow’s. Their capacity will remain critical as long as DoD moves personnel and their families around the globe.”
The military accounts for about 15% to 20% of all moves each year.
The contract has been pinned down by controversy since its inception.
The American Moving and Storage Association previously stated it was worried not enough small businesses will be able to participate. The association is also concerned about timely payment of subcontractors and clarity on how the management structure will work.
Federal News Network reached out to American Moving and Storage Association upon learning of the contract award. Katie McMichael, director of government affairs, said the organization does not have a comment at this time.
The 2020 defense authorization act required the Government Accountability Office to look into household goods before awarding the contract.
The report found that DoD may not have accurately calculated some costs because of unanswered questions on overseeing contractor performance will be conducted. There are also some other measurements DoD needs to build out before it can find out if the contract will truly help.
“Without developing performance metrics for all moving activities, and articulating the linkage between metrics and goals, TRANSCOM will have limited ability to assess whether incorporating the new contract is an improved program for service members,” the study states.
GAO recommended DoD collect and track data more precisely to determine its moving manpower needs, to develop performance metrics for activities not part of the contract and to articulate the linkage between metrics and the program goals. DoD agreed with all of the recommendations.