Pentagon Cancels Troubled $17.9B Military Moving Contract
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The Pentagon has terminated the multibillion-dollar Global Household Goods contract, a controversial program intended to replace a legacy military moving system that instead has been beset by complaints and widespread criticism.
The cancellation of the $17.9 billion contract arrives barely a month after Defense Secretary Pete Hegseth called on the U.S. Transportation Command to make “immediate modifications” and address “deficiencies” with the program, and to ensure that thousands of military members and defense civilians have successful moves during the busy summer months.
Hegseth’s memo followed letters of concern sent earlier this month to both Transcom and Congress.
“Today the Department of Defense terminated ϳԹSafe Alliance, the DOD HHGs contractor, for cause due to HSA’s demonstrated inability to fulfill their obligations and deliver high-quality moves to service members,” Chief Pentagon spokesman Sean Parnell said in a June 18 statement. The statement noted that DOD put in place “several immediate changes” to address peak season issues.
“Household good moves are being handled within the legacy ‘Tender of Service’ system to ensure the ability to move personnel and their families,” DOD noted. “Additionally, those who choose to move their own household goods via the Personally Procured Moves process are being reimbursed at an increased, more reasonable rate.”
Hegseth named Army Maj. Gen. Lance Curtis to lead a task force that will oversee the situation. The new Permanent Change of Station Joint Task Force has the authority to decisively act and make immediate improvements to the military’s Personal Property Program, which oversees moves, DOD said.
In all, the Defense Department oversees an estimated 325,000 annual moves of military families worldwide, with peak military moving season taking place May 15- Aug. 31.
For months, American Trucking Associations’ Moving and Storage Conference has voiced concern that GHC implementation through Transcom has been operating without transparency or a clear strategy. This has prevented the moving industry from making the requisite investments to secure future capacity needed under either the ϳԹSafe Alliance or legacy moving programs, according to ATA.
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“We have been sounding the alarm over this contract’s failures to deliver for our nation’s men and women in uniform, and we are grateful the Department of Defense has come to this same understanding,” said Dan Hilton, executive director of ATA’s MSC. “We look forward to working with DOD to find solutions that provide efficient and effective services for America’s military service members and their families, who deserve nothing less.”
In recent months, there have been mounting concerns that the GHC contract has been falling short of its goals, notably by transferring large numbers of military moves away from the new program’s “single-point-of-contact” contract and back to the Tender of Service moving program.
While some companies have been completing moves under the new contract, some large movers have maintained their distance while waiting for key questions to be answered. One sticking point has centered on the requirements of the federal Service Contract Act, which provides workers on federal service contracts the right to receive at least the locally prevailing wage rate and fringe benefits, as determined by the Labor Department, for the type of work performed.
“I think Transcom is determined to push ahead,” Bill Lovejoy, president of San Diego-based Republic Moving and Storage and chairman of American Trucking Associations’ Moving and Storage Conference, said in October. “But at this point in time, we still do not know how to comply with the Service Contract Act rules. We’re trying to figure that out.”
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Customers can access resources and information about conducting their move through the Tender of Service program on the Moving Your Personal Property page on Military OneSource at , Parnell said.
“ϳԹSafe is confident it performed to the fullest extent possible considering the limitations placed on it. ϳԹSafe disagrees with Transcom’s justification for terminating the program,” the contractor said in a statement. “Though ϳԹSafe will be ceasing operations, it will first complete all moves currently in progress for service members and their families.”
