DOD raises formal problems with performance on multibillion dollar movement deal
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DOD raises formal problems with performance on multibillion dollar movement deal

The Ministry of Defense has issued a formal message to the contractor on its multibillion dollar Household products that move contracts Using a compliance mechanism that is usually reserved for situations where the government has strong indications that a supplier does not perform under the terms of the contract.

The latest message about “show-cause” from US transport Command Ask the seller, Homesafe Alliance, to explain hundreds of instances in the last month where relocators have failed to begin the movements of military families on the agreed dates, delivered their possessions late, or both, according to the command.

“It was primarily related to the missed pickups, and they are driven by their ability to access (moving industry) capacity,” Ken Brennan, Transcoms Manager of acquisition, told reporters on Thursday. “The initial position was that they had to have the ability to do the movements when we grow them to them, and when they did not deliver we asked them:“ Where is that capacity? How do you get that capacity? ‘It’s an ongoing conversation … we talk daily to make sure they build that capacity. “

GHC Ramp-up

The problems appear to have started at the end of December, when Transcom finally began to switch large volumes of military movements to the long delayed Global household goods. At the beginning of December, After a longer test period And phase-in activities occurred only about 5% of the movements under the GHC contract. By this week, that figure had risen to 17%and apparently occurred at a rate that exceeded Homesafe’s ability to recruit the migration company’s subcontractors to perform the work.

Homesafe refused to make any of its officials available for an interview, but in response to written questions, said the “vast majority” of the features it has so far performed, and that it has apologized to military families in cases where they Don’t be.

“Modernization of the military relocation system has presented inevitable challenges, but Homesafe works through them carefully to ensure that we deliver high quality, quick move to military officials and their families,” the company said. “We are involved in constant openness with service members, our supply chain and the government’s labor force at DOD’s joint freight offices for personal property when we modernize and transform the military operating experience.”

Homesafe said that the latest problems were partly caused by an “internal logistics error” within a moving company that acts as one of its subcontractors, but did not provide any further details. The company did not answer specific questions about what percentage of its movements had gone wrong.

Transcom officials said they currently estimate that 1,000 families have been affected by missed pickups, late deliveries or communication problems. These figures are confirmed by e -mail messages obtained by Federal News Network where Homesafe reached out to a wide range of the moving industry to try to secure capacity for traits that were quickly approaching – or were already delayed – but for which no drivers were currently allocated . These documents seem to show that hundreds of features planned during periods in January were missed their pickups.

In total, according to Transcom, Homesafe has been awarded a total of 5,195 work orders for movements from this week, of which 1,737 have been collected and 922 of which have been delivered so far. Many of the remaining work orders are to move dates in the future and extend to the coming summer.

GHC still “the future” for DOD, says officials

Despite the message about the show cause and the latest performance problems, government officials showed no signs on Monday to support their relationship with Homesafe, which won up to $ 17.9 billion GHC contracts after a long-term bid protests series.

“GHC is here,” says Andy Dawson, head of Transcoms Defense Personal Property Management Office. “GHC is the department’s future development program for household goods, and despite some of the early challenges We have Seen we see many positive aspects in GHC, and we really believe that this will improve our experience of officials. GHC is really a transformation effort. We transform the department’s internal business processes and service membership experience. We distribute several new IT software platforms, and we drive change in how the industry support Service members. “

However, Homesafe’s current struggle to ensure enough truck and labor ability to meet the requirements of the new contract is completely surprising for many of the companies that are currently implementing movements under the existing system, known as the program “Tender for Service”.

Capacity problems that are predicted

Managers from all over the industry have warned For at least one year that the prices offered by Homesafe offers to individual moving subcontractors are so low that companies would in many cases not make a profit or even lose money on certain features. These prices vary considerably based on the origin, destination and weight of a broadcast, but the industry members have said that they are as much as 40% lower than the prices that DOD currently pays movers.

“This is not a Exaggeration – This is not the boy who cried wolf anymore. In fact, the wolf is here, and this is on its way to an absolutely disastrous service error, ”said an industry leader who spoke to Federal News Network due to anonymity due to the sensitivity of DOD’s current relationships with the industry. “I just hope that the leaders at DOD can stop this, because it is about to become real. It is already, but its In the process of getting much worse. “

Homesafe, in turn, blamed the sitting moving companies for some of their capacity problems.

“We have met headwinds from the transformation in the moving industry that military families have repeatedly asked for and earn And pushes moving companies not to register with us, ”said the company in its written responses to Federal News Network. “Despite these efforts, HomeSafes network of high quality suppliers continues to grow as GHC volume grows.”

It is unclear how many relocators are currently in that network; Homesafe does not reveal these numbers.

And the size of the subcontractor base that currently works under the contract is also unknown to the US transport command, despite Transcom striving to start using the contract for all domestic military movements at the summer’s top season.

“We have an expectation that Homesafe will build that capacity, and they have shared with us that they have signed Master Service agreements to cover the requirement,” Brennan said. “What we hear and see is that despite the main service agreement, there may be companies that do not take the business because they experience a participation in cost compared to the tender system. We work to see if we can get the insight into that capacity in a little more detail. But the contract, which I do not have through Homesafe to the subcontractors, prevents us from actually having those measurement values ​​… We agree on a result via the GHC contract. We don’t tell people how to do it. We not Necessarily needs insight into how many employees they have. We just need to have the assurance that They have Got capacity. “

Assessment of changes in implementation schedule

From now on, Transcom’s implementation schedule for GHC requires for all features within the Continental US to switch to the new contract from May and start using it for international features in September. Officials said Tuesday that they have not made any decisions to adjust the schedule, but that it is still an opportunity under the planned “condition-based” FASIN method. An internal evaluation to assess the current schedule was planned for Friday.

“We continuously assess that with the military departments, with (our acquisition team) and constantly assesses Homesafe performance with the results we see,” Dawson said. “We will judge it before we make any final decision to make adjustments.”

At the same time, the command is moving forward with adjustments to the inheritance “tender” program. Dawson said Transcom will release updated 2025 business rules for the current program “In the next few days.” Movers have raised concern about a draft version of the rule changes, including one that would start treating companies with a joint owner as a single unit in order to make individual prices to move military families. According to the industry, this change in particular would disadvantage “high capacity” companies with several operating departments, as it would reduce their chances of being chosen for a special feature.

On one December letter For Transcom called the International Association of Movers the planned changes “destabilization.”

“Especially frustrating for many of our members is that Transcom continues to say that it will pass all domestic transport to GHC before the high season 2025,” wrote Brian Limperopulos, the association’s president. “With less than six months to go to the scheduled transition, Transcom then announces changes that will come into force after all domestic transport will move under GHC. These mixed messages to the industry also question whether relocation should rely on the GHC transition forecasts that Transcom has advertised to the industry at this time. “

Dawson said Tuesday that the changes in the Legacy program are needed to increase liability and performance, and that Transcom considered input from between 30 and 40 moving companies before making a final decision.

“The position offered by the industry is,” during the transition does not change anything, only let the current program continue to work as it is. “But the reality of the situation is that during any transition, and especially a transition of this size and size, you must handle both programs,” he said. “You have to reduce the risk during the transition … We have identified how we think about the best control That risk. At the end of the day, it is about service members and families and delivers an improved program for them. It is a monumental change. These are transformation changes, and we just have to balance all aspects as we move forward. “

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