DOD Household Goods

The Defense Department (DOD) spends more than $700 million each year to move the household goods of military service members and DOD civilian employees. DOD shares liability with carriers for loss and damage to these shipments. During mid-1987, DOD increased carrier liability for domestic household goods shipments, a change that the carrier industry opposed. In March 1993, DOD proposed that carrier liability be similarly increased for international household goods shipments, a change that carriers objected to as well. This report evaluates DOD household goods shipment programs to determine (1) the impact of the 1987 increase in carrier liability on domestic shipments and (2) the level and the type of carrier liability that DOD should adopt for international shipments.

GAO found that: (1) carrier performance has improved since DOD increased carrier liability on domestic household goods shipments; (2) although DOD claims costs declined by an estimated $18.9 million between fiscal years 1987 and 1991, only the Air Force achieved the expected level of cost recovery from carriers; (3) DOD needs to increase carrier liability on DOD international shipments so that DOD can recover the cost of damages and improve carrier performance; (4) industry officials believe that changes in carrier liability on international shipments could cause major industry disruptions unless carriers are compensated in exchange for the increased liability; and (5) MTMC does not have adequate claims information to assess individual carrier performance or the costs associated with increased carrier liability.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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