Defense Transportation: DOD and GSA Personal Property Programs

Published by the Government Accountability Office on 1999-04-15.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

         United States

f   A0   General Accounting
                       D.C. 20548

         National Security and
         International  AfTairs Division


         April 15, 1999

         The Honorable Herbert W. Bateman
         The Honorable Solomon P. Ortiz
         Ranking Minority Member
         Subcommittee on Readiness
         Committee on Armed Services
         House of Representatives

         Subject: Defense Transnortation:   DOD and GSA Personal Prone&v Programs

         Following the March l&1999, hearing before your Subcommittee on the Department of
         Defense’s (DOD) personal property program, you asked us to provide information on the
         General Services Administration (GSA) and DOD personal property programs. This letter and
         the enclosure provide the information we gathered on the agencies’ current programs. It
         should be noted, however, that both agencies are currently in the process of reengineering
         their personal properly programs.

         We noted differences in the scope and management between the DOD and GSA personal
         property programs. GSA is responsible for moving between 12,000 and 15,000 government
         employees a year, whereas DOD handles approximately 775,000 service member moves
         annually. GSA deals with far fewer household goods carriers (about 330) compared with
         DOD (1,300 carriers). Each government agency has the option of selecting one or more
         carriers from a list of approved GSA carriers, while DOD makes an effort to equally distribu te
         service member moves among its approved carriers. Another important difference is that
         DOD allows a second phase in the process, in which carriers are permitted to change
         previously offered rates to match those of the carriers offering the lowest rates.

         We discussed the programs with officials responsible for managing the personal property
         programs at each agency and obtained information from a variety of available sources. We
         provided a draft of the enclosure to officials from DOD and GSA for their review and
         cqmments. The officials generally agreed with the information discussed in the enclosure.
         We conducted our review in accordance with generally accepted government auditing

                                            /452~(53                GAO/NSIAD-QQ-139R
                                                                                    Personal Property Programs
Major contributors to this letter were Nomi R. Taslitt, John R. Beauchamp, and Jacqueline E.
Snead. Please contact me at (202) 512-8412 if you or your staff have any questions. .

David R. Warren, Director
DefenSe Management Issues


  Page 2                                                   GAOI’NSIAD-~Q-139RPersonal Property Programs
ENCLOSURE                                                                                                                                                                                                                                                                     ENCLOSURE

Department of Defense and General Services Administration Personal Property Programs
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Legal authority                                                                                49 U.S. Code 13712and DOD                                                                               49 U.S. Code 13712 and GSA
                                                                                               implementing regulations.                                                                               implementing regulations.
Annual moves                                                                                   775,000 service members.                                                                                 12,000-15,000 civilians.
Industry involvement:                                                                          1,300 carriers and forwarders:                                                                          Over 330 carriers, forwarders,and
prime contractorswith DOD                                                                                                                                                                              relocation companies.
andGSA (A)
Papercompanies(B)                                                                              Carrier approval processdoesnot                                                                         Carrier approval processgenerally
                                                                                               exclude paper companies.                                                                                excludespaper companies.
Traffic distribution/carrier                                                                   Traffic managersequally                                                                                 No requirement for equal traffic
performance(C)                                                                                 distribute traffic. Selection is                                                                        distribution. Agencies may select one
                                                                                               basedon a minimal acceptable                                                                            or more carriers from GSA’s list of
                                                                                               level of quality with the lowest                                                                        both quality indexed and non-indexed
                                                                                               rates receiving preference.                                                                             carriers.
Point to point move                                                                            No.                                                                                                     Yes, if requestedby agency.
Quality assurance                                                                              Inspections required. Personal                                                                          Inspections optional. GSA primarily
procedures                                                                                     property offices perform                                                                                relies on carrier approval processand
                                                                                               inspections to the extent that                                                                          customersurveys’ effect on carrier
                                                                                               personnel are available.                                                                                selection and scopeof operationsto
Small businessimpact                                                                           No set-asides.                                                                                          No set-asides.
(prime contractorswith
Ratecycle                                                                                      Semi-annual rate filing; two-                                                                            Annual rate filing with a mid-year
                                                                                               phasebid processgives carriers                                                                           supplementalfiling; single phasebid
                                                                                               opportunity to match rate.                                                                               process,no opportunity to match
                                                                                                                                                                                                        lowest rate.
Weight allowances                                                                              Rank dependent,ranging from                                                                              18,000pounds for all personnel.
                                                                                               5,000 to 18,000 pounds.
Customersatisfaction(D)                                                                        DOD does not solicit or consider GSA usescustomer satisfaction
                                                                                               customer satisfaction surveys.    surveysto evaluate carrier
                                                                                               Local personal property offices   performanceand assurequality.
                                                                                               do quality scoring.
Claims process                                                                                 Indirect: customer submits       ~Direct: customer,deaJsdirectly with
                                                                                               completed government claim       ~carrier to settle claim (in casesof
                                                                                               form with Judge Advocate          impasse,GSA will offer
                                                                                               General’s Office for resolution.  recommendations).
Coveragelimitations Q                                                                          Coveragefor depreciatedvalue is Full replacement.
                                                                                               capped at $40,000.
Relocation service                                                                             DOD does not provide relocation Agencies can contract for relocation
assistance                                                                                     service assistance.               servicesincluding guaranteedhome
                                                                                                                                 saleprogram home-finding assistance,
                                                                                                                                 andreimbursement for sale/purchase/
                                                                                                                                 property managementexpenses.

Page 3                                                                                                                                                                                          GAOMSJAD-99-139RPersonal Proper@ Programs
  ENCLOSURE                                                                          ENCLOSURE

  (A) Industry Involvement

  DOD’s personal property program is run centrally by the headquarters office of the Military
  Traffic Management Command (MTMC) but administered locally at about 200 military and
  DOD transportation offices around the world. DOD works directly with approximately 1,300
  moving van companies (carriers) and forwarders, and indirectly with thousands of agents and
. owner-operator truckers working for the carriers and forwarders.

  GSA’s Centralized Household Goods Traffic Management Program is run centrally by its
  Kansas City Regional Office, which offers operational assistance to federal agencies that use
  the moving services. GSA works directly with 332 moving van companies (carriers),
  forwarders, and relocation companies and indirectly with hundreds of agents and owner-
  operator truckers working for the carriers, forwarders, and relocation companies.

   (B) Paper Companies

   Carriers or freight forwarders desiring to participate in the MTMC program must provide
   proof or certification that they have requisite operational authority and must agree to abide by
   MTMC’s Tender of Service. The carrier approval process does not exclude “paper
   companies,” affiliates of larger or parent companies whose purpose is to increase shares in
   traffic, but do not offer additional transportation capacity.

   Under the GSA program, any carrier or freight forwarder having requisite operating authority
   (certificates, licenses, or permits, as appropriate) must submit a written request to participate
   and must agree to abide by the terms and conditions of GSA’s Tender of Service. The carrier
   or freight forwarder must also demonstrate its financial responsibility, working capital, and
   other financial, technical, and management resources to participate in the program. The GSA
   carrier approval process generally excludes “paper companies” from participating.

   (C) Traffic Distribution

   Each local military installation uses a traffic distribution roster. Carriers and forwarders are
   placed on the roster for each channel by order of rate level and quality score. Traffic
   managers equally distribute traffic based on a minimal acceptable level of quality with the
   lowest rates receiving preference.

   GSA does not have a requirement for equal traffic distribution. Agencies may select one or
   more carriers from a listing that identifies both “quality indexed” carriers (those with a
   quality rating based on 70 percent quality using data from customer evaluations and 30
   percent price) as well as non-indexed carriers (those without a quality rating, either because
   they are new in the program or have not had sufficient traffic volume and resulting
   evaluations to produce a quality rating).

    Page 4                                                  GAO/NSiAD-99-139RPersonal Properly Programs
ENCLOSURE                                                                         ENCLOSURE

(D) Customer Satisfaction

DOD does not administer or use customer surveys. Local transportation officials provide
performance quality feedback on individual shipments based on three factors: on-time
delivery, on-time pickup, and estimate of loss or damage. These factors comprise the Total
Quality Assurance Program quality score used in the allocation of traffic.

GSA’s personal property program solicits carrier performance evaluations from customers
and uses the results to establish carrier rankings and scope of operation that can directly
affect carrier selection. GSA officials reported that the customer response rate for calendar
year 1998 was about 30 percent.

(E) Coverage Limitations

DOD has different weight allowances for its members according to military rank. These
range from 1,500 pounds for the lowest enlisted rank with no dependents up to 18,000
pounds for higher ranked officers. Coverage in the DOD program is capped at $40,000 for
the depreciated value of damaged/lost items.

The GSA program provides full replacement protection. This approach takes into
consideration the actual costs to replace a lost or damaged item with a like item rather than
basing payment on the depreciated value of an item.


Page 5                                                 GAO/NSIAIM%-139R Personal Property Programs
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