A long-awaited overhaul of the Defense Department’s system for moving military members’ household goods from place to place will be delayed yet again — and for a still-undetermined period of time, officials said Thursday.
Unlike previous setbacks, the latest stumbling block isn’t related to the numerous legal challenges that have faced the Global Household Goods contract (GHC), which is worth up to $17.9 billion over nine years. This time, IT integration problems are to blame.
Officials at U.S. Transportation Command first noticed the issues during an initial round of IT testing in August, and they first believed the bulk of them would be resolved by the end of 2023. But integrating the government’s systems with the new ones being built by HomeSafe, the winner of the new household goods contract, turned out to be even more complex than it first appeared.
“There are two new systems in development, and we’re building an entire new IT environment for this solution — these are not systems that are getting deployed into an existing architecture,” Andy Dawson, the director of TRANSCOM’s Defense Property Management Office told reporters. “The business process and reform that we’re driving to is, surprisingly, more complicated than most people realize. But that complicated business process is on purpose and by design, because the guardrails are put in place to protect the tens of thousands of service members that relocate every year.”
The GHC contract is meant to transition the military services from a longstanding system in which DoD contracts directly with roughly 8,000 moving companies each year — for each and every military service member’s move, one by one — to an overarching managed service contract in which HomeSafe handles most of the process, including by subcontracting with moving companies. HomeSafe also built an IT system called HomeSafe Connect to help manage its interactions with movers and with service members.
But moving to the new contract still required DoD to build its own IT infrastructure, called MilMove, which will eventually replace the Defense Personal Property System (DPS). Both systems are mainly designed to support government users, but Dawson said the legacy DPS system relies mostly on manual, paper-based processes once work is actually handed off to moving companies.
“MilMove will be the initial customer interface where [base transportation offices] will build out their initial move requirement,” he said. “But then the move is then transmitted to HomeSafe Connect, where then the now-reformed process really starts to move into automation — from the pre-move survey to the inventory process. There’s a record of all correspondence between the parties, and then in-transit visibility of your shipment all the way through the claims process. So there’s a complete transformation occurring.”
Officials said they weren’t yet ready to estimate how much of a setback the IT integration challenges would be. They said they were working with HomeSafe to schedule more testing between now and the end of January 2024, but that TRANSCOM won’t know how soon the department will be able to transition to the GHC contract until those tests are finished.
Previously, DoD had planned to start handling at least some moves under the new system in 2023, and have it ready to handle the bulk of military moves by the peak summer moving season in 2024.
“It is our goal to start shipments as soon as we meet the conditions required to successfully deliver an improved experience for our service members and families,” Dawson said. “The volume of shipments that will be will be in GHC is largely contingent on the technical testing, but for the peak season, I think it’s safe to say the large majority of shipments will remain in the [legacy] program.”
Officials acknowledged that’s not an ideal situation, considering relatively low satisfaction rates in the current moving system. During peak season this year, only 74% of servicemembers said they were satisfied with their moves, and just 41% of those who filed claims for missing or damaged property said they were satisfied with the claims process.
It’s only the latest delay in what Defense officials have long believed will be the answer to the moving system’s perennial challenges.
After years of planning, DoD released its final solicitation for GHC in 2019 and awarded the contract to another company, American Roll-On Roll-Off Carrier Group (ARC) in 2020. TRANSCOM later rescinded that decision amid a series of bid protests and what the Government Accountability Office said were “pervasive” violations of procurement law.
Even after the reconsideration and eventual award to HomeSafe, the contract was tied up for another year while ARC and a second bidder challenged the re-award before the Court of Federal Claims. The court eventually ruled in DoD and HomeSafe’s favor, but the final legal hurdles weren’t cleared until December 2022.
Meanwhile, at least some moving companies who currently do business with DoD have expressed concerns about the rates they’ll receive from HomeSafe under the new contract structure. In light of the contract’s delays, the prices HomeSafe proposed to pay its subcontractors were based on labor rates that have since risen significantly, and some firms have suggested they won’t be able to accept military moving jobs without losing money.
But Ken Brennan, TRANSCOM’s director of acquisition, said the command feels confident the rates will be competitive once the contract is finally implemented — partly because, he argued, the new contract will give moving companies new ways to get efficiencies from their own operations.
“The comparison of the new model to the old model is inappropriate and potentially a little bit unfair,” he said. “When we award 170,000 domestic moves individually to 800 different companies, the companies themselves don’t know whether they’re going to get one today or 10 tomorrow and then maybe not another one until, you know, June. They have no ability to plan. The GHC model is based on HomeSafe being able to manage the network in a way that balances the capacity. The rates are reflective of that efficiency, which allows people to keep their trucks and their crews active more consistently at a higher availability rate. If a vendor has a single truck and they get an award the first week of the month, and then they have to wait another week before they get a second award, that means they do two missions in a month to cover their costs, and it’s going to need to be a higher transaction value. If they know they can get one every week for four weeks, even though the price may be lower, they’ve got 100% utilization of that vehicle and can actually operate at less cost per transaction compared to the current inefficient system.”