Summary

Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) methods for procuring commercial household goods shipping and storage services for transferred personnel, focusing on how DOD: (1) solicited rates from moving companies and selected contractors; and (2) managed temporary storage required in conjunction with shipments of personal effects.

GAO found that: (1) carriers had no incentive to try to keep their bids low during the first phase of the DOD two-step procurement process, which allowed them to lower their bids during the second step; (2) carriers that bid low during the first step received no greater reward than carriers that initially bid high and then revised their bids during the second step; (3) the DOD procurement process for international moves and the General Services Administration's procurement process for civilian moves successfully kept carriers' bids lower by using a single-step bidding system under which carriers bid against a carrier-adjusted baseline; (4) the Military Traffic Management Command (MTMC) estimated that DOD spent about $114 million during fiscal year 1988 to temporarily store household goods and unaccompanied baggage for transferred personnel; (5) neither MTMC nor DOD compiled data about the actual costs, amount, or duration of such storage-in-transit; (6) the military services stored shipments in transit due to housing availability delays, shipping and receiving activities' difficulty in arranging for delivery, and shipments arriving before transferred personnel; (7) DOD did not penalize carriers who delivered shipments early; and (8) improved coordination and communication between shipping and receiving activities, members, and carriers could increase the use of storage at origin, which was generally less costly than storage-in-transit.