Military’s $17.9 Billion Moving Contract Off to Slow Start
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After being stymied by yearslong bid protests, technical system challenges, startup delays and criticism from large moving companies, a $17.9 billion contract to move military members and their families finally took effect this summer.
So far, however, just 100 or so local moves have been completed by local moving companies, with plans underway for gradual expansion despite continued concern being voiced by the broader moving industry.
Plans are underway this month to continue local moves and initiate a limited number of interstate moves under what is known as the Global Household Goods Contract (GHC), according to a recent statement by the U.S. Transportation Command, or Transcom, which is coordinating the massive effort with a sole contractor, Houston-based HomeSafe Alliance.
The Department of Defense aims to achieve full GHC domestic implementation by springtime, with plans for monthly increases in shipment volume. International shipments are not expected to begin before September 2025.
“HomeSafe’s first 100 moves were local shipments, defined as being packed, picked up and delivered within the same general area,” HomeSafe said in a Sept. 3 statement. All were performed in California, Florida, North Carolina, Virginia or Washington.
“The positive feedback received from both customers and our transportation offices shows that we are headed in the right direction,” Andy Dawson, Defense Personal Property Management Office director, said in a statement. “This summer provided us the opportunity to validate new business processes and IT systems for GHC on a smaller scale while customers experience the new program. Overall, we are satisfied with how things have gone so far and anticipate continued progress as GHC volume increases this fall.”
Despite this early praise, several primarily large, longtime military movers are taking a wait-and-see posture before participating in the program. These companies for months have voiced concern primarily over a federal legal requirement attached to the contract that they say is difficult to understand and which presents compliance challenges. So far, neither Transcom, the contractor nor the Department of Labor have explained how the federal requirements of the contract will specifically work, some movers say.
“From my perspective, the concept was never properly vetted by Transcom to begin with,” said Scott Kelly, president of Suddath Cos. “We had a couple of industry meetings, talked through it, [but] I don’t think the industry had a full understanding of all the requirements. That was back in the fall of 2018.”
The Moving & Storage Conference of American Trucking Associations — which counts companies that handle military moves in its membership — likewise has concerns.
Hilton
“The focus of our efforts is on providing the best service to our military families,” said Executive Director Dan Hilton. “We are working on behalf of our members to ensure that goal is attained.”
The group credited lawmakers with including in the 2025 National Defense Authorization Act language that would direct the Government Accountability Office to look into the GHC over the next several months.
Some movers have questions about the details of the GHC requirements. In general, the Federal Service Contract Act law applies to movers who use contractors and subcontractors performing services on prime contracts equal to or less than $2,500 in value to pay the federal minimum wage as provided in the Fair Labor Standards Act. Contracts in excess of $2,500 must pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates contained in a predecessor contractor’s collective bargaining agreement, according to the Department of Labor.
Kelly said his company uses independent contractors — some local and some long-distance — who get a percentage of the revenue. But he said the contract law presents a problem for most parties involved, including agents, service providers and independent contractors themselves.
“Yes, the Federal Service Contractor Act is a problem,” Kelly said. “Independent contractors do not want to be employees. Fiscally, it would be virtually impossible for the moving industry to make all these thousands of independent contractors employees. We would have to buy their equipment, pay for the materials at every shipment, fuel and repairs, all the costs associated with being an independent contractor.”
Helenthal
“As primarily longhaul movers, this is the first time this law has been applied to us,” added Tim Helenthal, CEO of National Van Lines. “We’ve been asking, ‘Department of Labor, how do we do this?’ No one has a real answer for us. When we start digging into this, we ask a lot of questions.
Allied Van Lines vice president Steven McKenna added, “We engaged legal support and guidance from folks that do [Service Contract Act] for a living, and they just can’t get their heads around the nature of our business. We cannot get good direction even from that group.”
McKenna continued, “We’re left to our own devices, and there’s too much risk associated with that.”
“The biggest issue right now is that Transcom is finally coming to the realization that they need to work with the Department of Labor about how to comply with the SCA,” said Oded Carmi, president of DN Van Lines. “The big question is right now how can these government agencies be OK with work proceeding on a contract that is required to be SCA compliant when they haven’t given us the details of how to be compliant.”
Lovejoy
Bill Lovejoy, president of Republic Moving and Storage and ATA MSC chairman, said he won’t opt into the program until his company can realize a profit.
“Speaking for my company, I can’t do it at the rates that are being offered,” Lovejoy said.
In all, DOD oversees an estimated 325,000 annual moves of military families worldwide, with peak military moving season taking place May 15-Aug. 31.
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