Defense Transportation

The Military Traffic Management Command is reengineering the Defense Department's personal property program. Although Congress supports DOD's reengineering efforts, it is concerned that the reengineered program could harm the moving industry, particularly small businesses. As a result, Congress directed that DOD report on small business issues before undertaking a pilot test. Because this report did not satisfactorily address congressional concerns about the impact on small businesses, Congress directed DOD to convene a military/industry working group to develop a mutually agreeable program to test pilot. The working group reached consensus on many issues, including a set of program goals, but it could not agree on the approach to take for the pilot test. Consequently, each side presented a separate proposal. This report reviews the two proposals. Specifically, GAO analyzes the extent to which each proposal met the DOD/industry goals for a reengineered personal property program.

GAO found that: (1) GAO's assessment shows that MTMC's proposal meets the goals for reengineering the personal property program to a greater extent than the industry plan; (2) both proposals are likely to equally achieve several of the 10 goals of the program, but overall, MTMC's proposal appears more likely to achieve the program goals to a greater extent; (3) MTMC's approach to providing quality service would give DOD the opportunity to assess a prospective contractor's plan to improve the quality of the service prior to contract awards; (4) this would enable MTMC to determine best value to the government by assessing the trade-off between price and technical factors; that is, award would be made only to responsible offerors whose proposals represent the best overall value to the government in terms of: (a) the offeror's proposed approach to performing the work; (b) past performance; (c) subcontracting plan; and (d) price, which would be one evaluation criterion and would not provide the primary basis for award; (5) GAO believes determining best value is an essential element of providing higher quality service to servicemembers; (6) the industry's proposal, which provides for selecting contractors initially on price, then quality after the carrier or forwarder has already handled DOD traffic, does not provide for assessment of quality up front using the criteria MTMC has proposed to use; (7) MTMC's approach to simplifying the system and adopting corporate business practices would enable DOD to dramatically reduce the number of contractors it must use, which would simplify contractor selection and could lead to more stability and provide leverage leading to cost efficiencies for both contractors and DOD; (8) the industry's proposal, though it changes the existing program to some extent, still retains a process in which DOD has to distribute traffic to many different carriers and forwarders; (9) overall, GAO believes that MTMC's proposal provides a greater opportunity than the industry proposal to achieve the program goals; (10) GAO supports moving forward with the pilot test without further delay, since a pilot test is essential to gathering the necessary data to ultimately design the reengineered personal property program; (11) in addition, it is important that performance standards be developed and data gathered in such a way to ensure measurable results of the pilot, particularly as it relates to quality of service and small business participation; and (12) if the Congress still has concerns about the impact on small business, piloting both proposals is an option; however, doing this would likely place an additional administrative and costly burden on MTMC and could delay implementation of the program.

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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