DOD Announces Delay in $17.9B Military Moving Contract
[Stay on top of transportation news: Get TTNews in your inbox.]
The U.S. Transportation Command has announced that an information systems technology glitch is delaying implementation of a $17.9 billion contract designed to improve the quality of moves for more than 300,000 military members and their families.
There were hopes that the Global Household Goods contract, awarded in March 2022 to a Houston-based company after two formal protests by a competitor, would be operational by last summer.
Now it’s unknown when the contract will become effective, or how many large U.S. movers will sign up with the contractor because of concerns that the system is thought by many to be unworkable and unlikely able to net movers and drivers adequate financial returns.
“The Defense Personal Property Management Office at Transcom continues to focus on improving the relocation experience for Defense Department and Coast Guard personnel and their families through the implementation of the Global Household Goods Contract,” the command said in a release last month. “That goal is at the heart of why the command has decided to delay the implementation of GHC as part of a continued deliberate, conditions-based, phased transition.”
In the meantime, Transcom is using its current system, called MilMove, which customers use to upload permanent change of station orders, share contact information and initiate a request for their new shipment to be scheduled.
HomeSafe Alliance has developed HomeSafe Connect, which would be used by customers, the government and industry to manage and track the shipment after it is initially sent from MilMove.
“These two systems must be fully compatible and integrated before Transcom will begin awarding shipments under GHC,” the command said. “When local shipments under GHC begin, they will be in small numbers and at specific installations. Once the first few orders are successfully executed and the required conditions are met, more shipments will be assigned for movement under GHC, and additional areas will be added.”
The command said it conducted testing of information technology systems for the contract in August and identified challenges that required attention before making the systems available to customers. But the military said that because of the complexity of system issues needing to be resolved, it has not yet been able to test the systems again as originally planned.
In a statement, the contractor, HomeSafe Alliance, said continued testing to ensure the interoperability of the two IT systems will be used to facilitate the GHC move process — the government’s MilMove and HomeSafe’s HomeSafe Connect.
“This month’s testing will ensure the two IT systems are fully integrated,” HomeSafe said.
Bowley
But movers are frustrated with the delays, and some are weighing whether to continue participating in moving the military, according to Ryan Bowley, executive director of American Trucking Associations’ Moving & Storage Conference. The moving system relies largely on layers of independent drivers, crews, loaders and packers, combined with strict federal wage law requirements that could be so costly as to leave movers with thin, if any, margins, he said.
“The command obviously sees some technology hurdles,” Bowley said. “But when I talk to our members, I think they are concerned in terms of other core issues within the GHC program and what that means for their participation. Is this a program as structured by DOD that is going to work for moving companies?
Lovejoy
“This program has to work for service members. The average service member moves every 2½ years. For it to work for service members, it also has to work for the industry.”
“In essence, what’s really going on is that the contract’s been awarded [and] they’re having some technical issues, they say,” said Bill Lovejoy, owner of San Diego-based Republic Moving and Storage and chairman of MSC. "But the real problem that they’re faced with is, there’s not one major van line that’s signed on to do this work. Because it’s not compensatory.”
The military represents 17% of the moving industry, Lovejoy said.
“So you want us to reinvent our industry, change from owner-operators to hourly employees, for 17% of the work,” he said. “It’s not going to happen.”
Morrissette
“It’s an octopus that’s got a lot of tentacles,” said JD Morrissette, president of Interstate Van Lines. Morrissette says it is too early to tell how well the system will work, but there are doubters.
“We’re probably more in the speculation stage rather than knowing what’s ahead of us,” he said. “Our primary concerns are a significant reduction in the economic model, and Transcom as well as HomeSafe have made some significant assumptions in efficiency gains operationally that we don’t necessarily agree with.”
He adds that the moving industry already is challenged economically, working on thin profit margins.
“We have taken a pause toward our commitment to the future program,” Morrissette said, “and that the possibility our capacity will be moving to other areas, and not necessarily dedicated to the DOD.”
Want more news? Listen to today's daily briefing below or go here for more info:
