DoD begins first long-distance moves under contentious multibillion dollar GHC contract

The Defense Department began its first interstate moves under an up-to-$17.9 billion contract meant to overhaul the military’s household goods moving system last week, a significant milestone toward what now appears to be an aggressive schedule to implement the Global Household Goods contract (GHC) after several years of delays.

The GHC contract is a controversial paradigm shift in how DoD handles household goods moves. Instead of its longstanding practice of contracting directly with moving companies, the department is buying all of its moving services through a single managed service provider. U.S. Transportation Command and that new vendor, HomeSafe, spent the summer testing the new approach and the new IT infrastructure it will require, with 212 short-distance local moves.

DoD issued its first task orders for interstate moves last week: 40 of those orders have been placed with HomeSafe so far. That’s a small drop in the bucket compared to the 300,000 military families DoD moves each year, but things are ramping up quickly, said Andy Dawson, the director of TRANSCOM’s Defense Personal Property Management Office

“All of the military services have had service members move under GHC, but based on the initial locations of where we started, the Navy has been a tremendous supporter of our transformation efforts,” he told reporters last week. “One-hundred and thirty-six out of those 212 task orders — roughly 64% — have been sailors and their families. GHC shipments awarded to HomeSafe have occurred and/or are planned to occur in eight states: Washington, California, North Dakota, Colorado, Virginia, North Carolina, Georgia and Florida.

Dawson said DoD plans to fully implement the new contract for the roughly 150,000 domestic moves it does each year by next May, just in time for the annual peak military moving season.

There are still some big questions about how achievable that is, partly because there are big questions about whether enough movers will sign on to work under the HomeSafe contract. So far, only a relative handful of moving companies have been willing to do that, and the vast majority of the large, established firms that currently work with DoD have said they won’t, largely because of what they say are rates that are so low that they would fail to turn a profit on most moves, and lose money on at least some.

‘Conditions-based’ phase-in

The rates DoD pays to HomeSafe, and that HomeSafe in turn pays to moving companies, are generally confidential, but TRANSCOM officials said they agreed to one upward adjustment in the government payments to account for higher costs in the moving industry after the COVID pandemic and the multi-year delay in implementing the contract because of numerous rounds of bid protests.

Dawson said DoD won’t rush the transition if HomeSafe isn’t ready with enough movers on hand to fully handle the military’s massive moving volume, but as of now, the department is confident in the schedule.

“First and foremost, the service member experience is at the forefront of all the decisions that we make. Whether that’s IT or business processes, how that impacts the relocation experience is factored into every decision we’re currently making,” he said. “As we move forward, we expect HomeSafe to have the capacity required to support the program. For those in industry that have participated in the [current] program, we’re very grateful for their participation. We’re very grateful for the feedback that they’re providing HomeSafe to make the program better, but at the same time, I think we recognize the size, magnitude and scale of this program, which is why we adopted a gradual phase-in over time, instead of a flip-the-switch approach.”

Legacy system will remain in place

And since there’s still some uncertainty about how the ramp-up of GHC will go over the next several months, DoD also plans to leave its legacy moving system, known as DP3, in place so it can be used for at least the rest of 2025 on an as-needed basis.

TRANSCOM is asking its existing moving companies to file their rate proposals for next year and plans to announce 2025 rules for the DP3 system soon. Dawson said by the end of this calendar year, the command should be in a position to give industry a reasonable forecast of how many moves will be in GHC and how many will be in the legacy system.

If all goes according to plan, the next step would be to start transitioning international moves into the new contract starting next September.

Those shipments are significantly more complicated, Dawson said.

“When a service member moves overseas, they have not only their household goods shipment, but also an unaccompanied baggage shipment that they’re authorized to move, and some will have a personal vehicle. And then some, not all, elect to put some of their stuff in storage. So from the service member perspective, it requires a little bit more advanced planning. We have to have the functionality in the system to receive their requests,” he said. “The next piece is from the business process perspective — the counseling that occurs to ensure service members are aware of their entitlements. Some countries don’t want you to ship firearms, for example. And then finally, a lot of the development on the international side will be in the HomeSafe system, which is now responsible for the commercial move of that cargo from the United States to overseas — things like customs clearance and the advanced notifications. All those things that are behind the scenes in the business process, that functionality all has to be ready to go, which is why we’re working it now.”

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