TRANSCOM’s bad movies: Bad moves for military families?

May the slow-motion train wreck that is GHC be mostly harmless to military families.

The Defense Department’s service members and their families are deployed both within the United States and around the world, sometimes rapidly. DOD pays for and coordinates the logistics of these moves, a responsibility of DOD’s U.S. Transportation Command (TRANSCOM).

TRANSCOM has long contracted out the moves to a cadre of large and small operators with pricing set by published tariffs. These rates were healthy enough to compensate all involved—the project managers coordinating moves, the moving companies themselves including long-distance haulers and packing folk, and moved families for any loss and breakage.

This next part is controversial and subject to disagreement, and I concede I do not know the whole story: some movers messed up some moves, DOD did not respond appropriately, and military-family-advocacy groups and media flagged moves as an issue.

Flash forward, TRANSCOM awarded a single, $7 billion moving contract called Global Household Goods (GHC; the C stands for contract—don’t ask), only to admit gross error and reaward to a different offeror, HomeSafe Alliance. Military families are too important for “second choice providers,” so we will call HomeSafe Alliance the winner.

HomeSafe’s GHC contract requires its movers to comply with the Service Contract Act for the first time—setting minimum wages by labor category above the federal minimum wage (in DC, a “shipping packer,” job 21110 must be paid $18.17 plus benefits). Many incumbent shippers subcontract with track owners and do not pay an hourly wage plus materials. They are ill-equipped to negotiate and set pay, comply with employment law, and calculate price adjustments reflective of all changing factors to stay in business. There is no incentive for their risk.

It is public policy that government’s disproportionate influence should not alter a commercial market; indeed, that is why we have the Service Contract Act to begin with, to avoid depressing wages in areas where the government contracts for a large portion of the labor pool

Everyone warned DOD that they were walking into a buzz-saw with this procurement. Incompetence saved them twice, both when a protest delayed contract award and again when the eventual awardee proved incapable of integrating with DOD’s systems. Will it save them a third time? We at Chaedrol I/O are hoping for the best.