Household Goods:

Competition Among Commercial Movers Serving DOD Can Be Improved

NSIAD-90-50: Published: Feb 12, 1990. Publicly Released: Mar 9, 1990.

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Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) methods for procuring commercial household goods shipping and storage services for transferred personnel, focusing on how DOD: (1) solicited rates from moving companies and selected contractors; and (2) managed temporary storage required in conjunction with shipments of personal effects.

GAO found that: (1) carriers had no incentive to try to keep their bids low during the first phase of the DOD two-step procurement process, which allowed them to lower their bids during the second step; (2) carriers that bid low during the first step received no greater reward than carriers that initially bid high and then revised their bids during the second step; (3) the DOD procurement process for international moves and the General Services Administration's procurement process for civilian moves successfully kept carriers' bids lower by using a single-step bidding system under which carriers bid against a carrier-adjusted baseline; (4) the Military Traffic Management Command (MTMC) estimated that DOD spent about $114 million during fiscal year 1988 to temporarily store household goods and unaccompanied baggage for transferred personnel; (5) neither MTMC nor DOD compiled data about the actual costs, amount, or duration of such storage-in-transit; (6) the military services stored shipments in transit due to housing availability delays, shipping and receiving activities' difficulty in arranging for delivery, and shipments arriving before transferred personnel; (7) DOD did not penalize carriers who delivered shipments early; and (8) improved coordination and communication between shipping and receiving activities, members, and carriers could increase the use of storage at origin, which was generally less costly than storage-in-transit.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: DOD has developed alternative plans which should correct the problems identified.

    Recommendation: The Secretary of Defense should direct the Commander, MTMC, to replace or modify the current two-phase bidding process so that all carriers have incentive to initially bid the lowest possible rates and the lowest bidder is rewarded for offering the lowest rate.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: The military services have been tasked to emphasize storage at origin to the maximum extent practical consistent with service member requirements. Instructions were printed in an October 1991 revision to the DOD Personal Property Regulations.

    Recommendation: The Secretary of Defense should direct the military services to use nontemporary storage and storage-in-transit at origin to the extent possible, rather than the more costly storage-in-transit at destination.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: The military services have been asked to place greater emphasis on improved communication and coordination among parties involved in the movement and storage of household goods. Instructions were printed in an October 1991 revision to the DOD Personal Property Regulations.

    Recommendation: The Secretary of Defense should direct the military services to take steps to ensure better coordination and communication among DOD shipping and receiving offices, carriers, and military members in the delivery of household goods.

    Agency Affected: Department of Defense

 

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