Pentagon Moves Closer to Outsourcing PCS Moves

A civilian contractor unloads boxes of home goods at Dyess Air Force Base, Texas, Aug. 29, 2018. (U.S. Air Force photo/Kylee Thomas)
A civilian contractor unloads boxes of home goods at Dyess Air Force Base, Texas, Aug. 29, 2018. (U.S. Air Force photo/Kylee Thomas)

U.S. Transportation Command is moving closer to outsourcing the military's entire system for shipping troops' household goods during permanent change-of-station moves, according to a draft performance work statement released Wednesday.

The move would hand responsibility for shipping the household goods of an estimated 650,000 families each year at a cost of $4.3 billion to a private company, following more than two years of "horrible" household goods shipment experiences among military families and years of debate within the Defense Department on how to improve military moves.

Last July, TRANSCOM reported that 10 percent of military members transferred in 2018 experienced breakage, loss of items, damage to their household goods and delivery delays. And nearly 105,000 military family signed a petition on Change.org last year calling for improvements to the system.

But the draft performance of work statement -- a precursor to a contract solicitation -- for what amounts to privatizing the PCS system came as a surprise to some advocates who have been tracking the issues and debate.

Megan Harless, an Army spouse who sits on a TRANSCOM PCS advisory panel established last year to address the problems, said she and her fellow committee members weren't told that outsourcing was under consideration.

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She added that board members found the command's request for information from industry online and expected it would be discussed in meetings. But in January, TRANSCOM officials simply told board members they were moving ahead with plans to outsource the system.

"It was a bit of a shock ... out of left field," Harless told Military.com on Wednesday.

According to the draft, the DoD would hire a contractor to provide the personnel, supervision, training, licensing and equipment needed to manage moves of DoD and Coast Guard personnel and civilians worldwide. The company would be responsible for packing, picking up, transporting, storing and delivering the goods -- "full-service household goods shipment management services," the draft noted.

The DoD has previously explored privatizing the military PCS system through a number of pilot programs. In the late 1990s, the U.S. Army tested outsourcing its relocation management services at Hunter Army Airfield in Savannah, Georgia. At the same time, Military Traffic Management Command -- the unit responsible for overseeing most PCS moves at the time -- also ran several pilot programs in North Carolina, South Carolina and Florida.

According to the Government Accountability Office, the pilots resulted in improved satisfaction rates and lower claims rates. But outsourcing also proved to be expensive: One pilot, called the Full Service Moving Project, was terminated prematurely due to high costs.

The GAO also noted that in devising the pilots, the DoD underestimated the cost of improving the information technology infrastructure needed to expand them military-wide and made "questionable adjustments for costs associated with claims and contracting process recommendations."

The pilots also were largely opposed by moving industry associations and their advocates in Congress, who said the reforms would harm small-business owners.

Harless questions the speed at which TRANSCOM is moving toward outsourcing and whether it has thoroughly studied the expense and implications of such a significant change.

She added that having a single private management company overseeing individual moving contracts raises concerns of accountability and could increase the likelihood of problems, given that there will be layers of contractors and subcontractors receiving little oversight from the government.

"On paper, this briefs well -- the idea that a single move manager would be able to levy financial penalties on the [subcontracting] companies is a great thing," Harless said. "But the biggest problem is the lack of research supporting the idea. One 2012 study on the concept showed it would increase the overall cost of PCS. There's been no more recent study or research to show potential benefits nor has there been a new cost analysis of what this large-scale shift would mean for taxpayers."

During a forum for Army families held Feb. 5 at the Association of the U.S. Army in Arlington, Virginia, Maj. Gen. John Sullivan, assistant deputy chief of staff for Army G-4 Logistics, said TRANSCOM is still "working though the details of determining whether privatization would be cost-effective and more efficient."

According to Sullivan, the contract, if awarded, would start in 2020 and the winning bidder would be expected to take over the military moving system in 2021.

Sullivan said the Defense Department is instituting several changes this year to improve the PCS moving season during the next two years: The DoD plans to increase quality-assurance inspections to include half of all moves, up from about 25 percent; place more shipments in crates to reduce breakage and theft; and establish an around-the-clock hotline for personnel to track goods and lodge complaints.

Pointing to problems raised this week in Congress by military families living in substandard base housing managed by private companies, Harless expressed concern that the government could cede responsibility of the PCS process to a single company, leaving military families with little recourse should problems arise.

"It could be a moving company, it could be Amazon, FedEx, Walmart. It could be anyone ... There just is a lot of uncertainty and too many unknowns about what the full picture will look like," she said.

-- Patricia Kime can be reached at patricia.kime@military.com. Follow her on Twitter @patriciakime.

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