Military Panel

California Moving & Storage Association
Military Panel
April 13, 2012
Terry R. Head
President
International Association of Movers (IAM)
Discussion Topics
• Business Case Analysis (BCA) to determine the
feasibility of outsourcing the DOD HHG program
• SDDC Program Management Review (PMR)
• What’s Happening RIGHT NOW!
• Regionalization – Master Plan
• 2011 Peak Season – 2012 Peak Season
• Defense Personal Property Program(DP3) - Phase III
• Electronic Billing & Payment for NTS
• FRV/Unearned Freight legal case
OSD - Business Case Analysis
Business Case Analysis (BCA)
• IAM staff closely monitoring possibility. Freight initiative
- Defense Transportation Coordination Initiative (DTCI)
• Early 2011: Signals that HHGs were coming under
same microscope.
• June 2011: Initial meeting with OSD to discuss BCA
• August 2011: BCA contractor named –
• Logistics Management Institute (LMI)
• September 8, 2011: IAM staff initial meeting with LMI.
Other meetings in September, October & November
OSD - Business Case Analysis…
• LMI met with major moving Associations, SDDC, US
Bank, Military Services, Individual TSPs and Agents,
Relocation Companies and National Accts.
• December 2011: LMI moved from data gathering to
data analysis
• March 2012: Released Draft Report – Associations to
met with OSD to discuss potential findings
• Late March 2012: Final Report/Recommendations
delivered to OSD
• What are the possible outcomes?
OSD - Business Case Analysis…
Five Alternatives:
Alternative 1 – Maintain “Status Quo, with DPS fully fielded and
Regionalization Plan completed.
Alternative 2 – Contract out labor (manpower) performing customer
interface functions, including counseling, responding to customer
questions, QC inspections; to also include contracting out labor for
booking shipments with TSPs, overseeing shipment management,
processing of invoices and managing SIT program.
(Alternatives 1 and 2 would require the contractor(s) use of DPS.)
Alternative 3 – Same as #2, plus the contractor would use its own
proprietary systems to support contracted (outsourced) functions,
instead of DPS. Would require use of DOD approved TSPs and DODnegotiated rates and rules for shipment awards.
OSD - Business Case Analysis…
Alternative 4 – Same as #3, except contractor will utilize a DOD
approved list of vendors, but the contractor would negotiate rates as well
as use its own commercial practices to manage and award shipments.
Alternative 5 – Entails a full outsourcing (contracting) of manpower,
business rules, approval of authorized vendors (TSPs), the negotiation
of rates, as well as, the award of shipments.
Alternative 5A – Same as #5, except contractor would use DPS
Counseling Module
Alternative 5B – Same as #5A, except DOD and the Military Services
would maintain customer interface storefronts. (Interpreted as PSSOs,
JPPSOs, etc., or their equivalents under 2016 Regionalization Plan)
SDDC Program Management Review
Initially titled the “Program Efficiency Review”
• Goal: SDDC to improve & find efficiencies for DP3
• Items being reviewed:
• Implementation of CFAC in Domestic Market
• Agent Declaration (LOI?), interim step in DPS - Agent I.D.
• Redefining TSP – possibly two definitions: Domestic vs.
International
• How to implement Open Season without further proliferation
of TSPs in both the Domestic and International Markets
• Minimum number of CSS to be considered statistically valid
What’s Happening RIGHT NOW!
1. Rate Filing –
• First round was delayed
• Problems with Bulk Rate filing method
• “Third round” added
• Began awarding shipments March 29
2. Minimum number of CSS requirement set at 20
3. No more Code 3 in the Pacific Channels
4. Contract with SRA for sustainment and enhancement
of DPS extended until Oct 1, 2013.
Regionalization
Joint Regionalization
• OSD initiative to be completed by 2015/16,
but on FAST TRACK!
• 7 CONUS JPPSOs – JPPSO-COS, JPPSO-NE, JPPSO-SAT, Ft.
Lewis, JPPSO-WA, Jacksonville & San Diego….May 15, 2012 Aberdeen and Ft. Detrick fall under JPPSO-WA.
• OCONUS – Japan (Yokosuka), Korea (Yongsan), Europe (WKAS),
JPPSO-HI and a few smaller, more isolated booking offices.
• Navy recently held informational meetings:
• San Diego - 3/20/12
• Jacksonville, FL (Mayport) – 3/26/12
• Norfolk, VA – 3/29/12
2012 Peak Season
2012 Peak Season
• SDDC Peak Season “Hotwash” Reviews – what is that???
• SDDC focused on CAPACITY while industry appears to be
focused on Traffic Distribution
• Rule Changes and New Rules implemented for 2012 Peak
Season
• Unlimited Refusals vs. Enhanced Blackout
• Expanded use of Code 2 and use Portable Moving &
Storage Containers (PMSC)
• Increased use of SIT @ Origin
• Elimination of the 70% rule
• DPS stability is major issue, especially during Peak Season
• What does Peak Season 2012 hold???
DP3 - Phase III
• This Phase of DP3 will DIRECTLY affect local agents!
• Includes….NTS, DPM & Local Moves
• Brings Best Value in the procurement process for all
of these Markets
• Phase III Draft Business Rules are posted on the
U.S. Transportation Command website (DTR
website)
• POSSIBLY…brings a new Market into the Domestic
Program – Domestic Small Shipment Market (dS2).
*** New concept just unveiled….DPM2.
ALL “under further review.”
• Timeline…estimated 3 years before implementation
begins.
Electronic Billing & Payment for NTS
• DOD will implement the Third Party Payment System (TPPS)
process in the NTS environment VERY soon.
• NTS service providers should have already been contacted by US
Bank. Implementation will be conducted in phases:
Rollout Schedule – over the next 12 – 18 months
Phase 1: 5 April - JPPSO COS, All Coast Guard sites
Phase 2: 5 May - Remaining AF Offices, Marines and few others
Phase 3: 5 June - Most remaining sites
All of the rest - 5 July –
• Online training will be available soon.
• **Benefits: Accelerated cash flow, Electronic Billing & Payment
(reduced paper), easy & rapid invoice dispute resolution, reduced
time chasing receivables.
** According to U.S. Bank
Unearned Freight
• Historically TSP charged-back with Unearned Freight when failing to
deliver goods at destination.
• Most charge-back activity suspended due to lack of capability in
electronic payment system. New functionality now available to
charge back TSPs through e-bills.
• Large warehouse fire (Dec. 2010) in Germany brought issue to
forefront and exposed increased vulnerability to industry.
• IAM believes under Full Replacement Valuation (FRV) there should
be no unearned freight liability since TSP makes customer whole.
• Suit Filed in Federal Court of Claims – case pending.
For Updates or Questions:
Charles “Chuck” White
Director of Government & Military Relations
Charles.White@IAMovers.org
Terry R. Head
President
Terry.Head@IAMovers.org
International Association of Movers (IAM)
Alexandria, VA
www.IAMovers.org
703-317-9950