In First, DoD Awards Massive $7.2 Billion Contract to Single Company for PCS Moves

May 01, 2020

This article by Hope Hodge Seck and Amy Bushatz first appeared on Military.com, the premier resource for the military and veteran community.

After extended debate and some controversy, U.S. Transportation Command has inked a massive $7.2 billion, three-year contract with a single company for the relocation of household goods in military permanent change of station moves. The contract is a major step forward in the Pentagon's effort to outsource the military moves process -- an effort that gained steam during a 2018 summer moving season that saw a surge in reports of broken goods and delays.

American Roll-On Roll-Off Carrier Group, Inc., based in Parsippany, New Jersey, confirmed Thursday it had received the contract, which covers moves for the Defense Department and the U.S. Coast Guard. In a statement provided to Military.com, the company said it planned to lead a "full-service, worldwide relocation effort with a team of subcontracting partners" with the intent of improving military moves and offering better service.

"Moving not only can cause significant stress for an individual, but can also challenge the mettle of an entire family," ARC CEO Eric Ebeling said in a statement. "This is especially true for our nation's Service Members, who are routinely challenged to relocate every two or three years. Team ARC brings superior quality, deep experience, increased capacity, and enhancements for the customer experience. We have been looking forward to this announcement and cannot wait to get started."

The contract begins in May, assuming no protests, and could run for nine years including the initial three-year base period, if all options are exercised.

"Under [the global household goods contract], a single commercial move manager was appointed to oversee activities that relate to the domestic and international movement and storage-in-transit of household goods," ARC said in its statement. "ARC will provide all personnel, equipment, facilities, tools, materials, supervision, and other items and services necessary to provide global Household Goods (HHG) relocation services."

The contract award is the first time the Pentagon has outsourced management of the military household goods shipment and delivery system. Personal vehicle shipments are already outsourced to a private contractor, International Auto Logistics (IAL).

That contract, awarded in May, 2014, came under intense scrutiny after hundreds of service members complained that their cars went undelivered far past their arrival due dates, could not be located in IAL's shipment tracking system or arrived at their final destination damaged. About 70% of the vehicles IAL tasked with shipping over 2014's peak moving system were considered late.

Despite those headaches, TRANSCOM officials said in late 2014 that annual cost savings brought by the contract, about $50 million, were worth the hassle.

After the 2018 summer moving season, in which 10% of military families reported loss, breakage or other problems with their moves, a Change.org petition begun by a military spouse got more than 100,000 signatures, prompting TRANSCOM to put a series of new measures in place to ensure the quality of PCS moves. But when news emerged in February 2019 that the Pentagon was moving forward with a plan to outsource the moving process, some expressed alarm that the process was happening too fast.

Megan Harless, who authored the Change.org petition and later was invited to be part of a new TRANSCOM advisory board, said thorough research was important.

"On paper, this briefs well -- the idea that a single move manager would be able to levy financial penalties on the [subcontracting] companies is a great thing," Harless said at the time. "But the biggest problem is the lack of research supporting the idea. One 2012 study on the concept showed it would increase the overall cost of PCS. There's been no more recent study or research to show potential benefits nor has there been a new cost analysis of what this large-scale shift would mean for taxpayers."

Later in 2019, moving industry members also cited concern that the Pentagon was moving too fast to outsource the PCS process and award a single company oversight of all military moves.

"This is untested. The plan hasn't undergone any kind of scrutiny. I believe it's U.S. TRANSCOM's wish to move to this type of procurement and they don't understand the ramifications," Charles White, president of the International Association of Movers, told Military.com in May of last year.

TRANSCOM did not immediately respond to a request for comment on the new contract.

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