Military families will be moving under a new household goods system earlier than previously expected — by peak moving season 2022, said Army Gen. Stephen Lyons, commander of the U.S. Transportation Command.
That’s the good news. But Lyons was questioned about whether the new contract will have mechanisms to address problems that may arise in the implementation. “We want to avoid another version of . . . the privatized housing debacle,” said Rep. John Garamendi, D-Calif., during a joint hearing May 18 of two subcommittees of the House Armed Services Committee.
The new contract will aim to address problems that came to a head in 2018 with service members’ belongings being damaged, lost or delayed.
TRANSCOM officials previously said the new system, which will involve putting the day-to-day management of household goods shipments in the hands of a single move manager contractor, would be implemented in the Fall of 2022. The contract is scheduled to be awarded this fall, in the September time frame, Lyons told lawmakers, and given that timeline, “we’d want to implement that in the peak season of 2022.” Peak season is generally mid-May through September. This year’s household goods moves aren’t affected.
The contract process was delayed for a year after the Government Accountability Office ruled in favor of two unsuccessful bidders and sent TRANSCOM back to the drawing board late last year. This new contract process follows a heavily contested contract which had been awarded in April, 2020. That contract had a potential cost of $19.9 billion over nine years. Sources said at least one of the previous bidders had a lower bid.
The global household goods contract will outsource the management of household goods shipments, essentially privatizing the function TRANSCOM handles. But TRANSCOM will still oversee the management, officials have said. Lyons has previously said the TRANSCOM effort is not “privatization,” since military moves are already conducted by private industry today. Rather, it’s putting the overall management of the household goods process in the hands of a private company.
Lyons was questioned about whether officials expect to have mechanisms to avoid the problems military families have faced with the privatized housing program.
“In the contract, is there an opportunity for the government to modify, to change or terminate the contract if there’s a problem with implementation of the program?” asked Garamendi. “The reason I’m asking is that in the base housing program, these are very, very long-term contracts. Through the passage of time, problems have developed and the government has found it very difficult, in some cases impossible, to renegotiate the contract.”
The privatized housing initiative involves partnership agreements between the companies and the service branches. But the household goods program is based on a different mechanism: contracts.
There’s always an option for the government to terminate contracts on the government’s conditions, Lyons said. “You make an important point on the housing analogy. This is part of precisely why we knew we needed to get our arms around the household goods industry, because we lack clear accountability,” he said.
“We do this professionally. We know how to write contracts. We know how to hold vendors accountable. But to your point, there’s always a means for the government to ensure accountability and that’s exactly why we move in this direction. I think it was reinforced by the Government Accountability Office and others who support the strategy.
“But I admit to you that we must deliver for military families. That’s the North Star.”
Under the current household goods program, “the way the contract is written, there’s no contractual way to hold subcontractors accountable, other than a letter of concern,” said Mark Belinsky, a retired Army lieutenant colonel who is director of currently serving/retired affairs for the Military Officers Association of America. Those subcontractors are the companies who pack, load, truck and unload the personal belongings of service members.
While there are a finite number of movers, and many of the current subcontractors would remain in the system, he said, the new contract is expected to have an oversight structure to hold them accountable.
After the problems with privatized housing, the leading lessons learned for the government are the need for focused governmental oversight through the chain of command, and a system of accountability for every party affected by the contract, to include the service member, according to Belinsky.
The current Defense Personal Property System was implemented in 2009, following about 10 years of various solutions and pilot programs aimed at addressing rampant problems with broken, missing, lost, and delayed personal belongings of service members that boiled up in the late 1990s.
Joyce Raezer, retired executive director of the National Military Family Association, has a historical perspective of the issues, as an advocate at the organization during the time problems with then-government-owned, dilapidated family housing came to the forefront, as well as problems with household goods shipments, more than 20 years ago.
“To me, the big problem with the household goods shipments, which is just like the problem with privatized housing, is that the people who are negotiating the agreements now won’t be the ones who will be around when it falls apart,” she said.
“DoD has never figured out how to negotiate agreements that hold its leadership accountable all the way up and down the chain, and hold the private sector company accountable for the results that we want. Families always get caught in the middle. …
“Nobody’s saying keep the system as is. But make sure the solution has safeguards built in for families.”