The Pentagon’s massive contract to overhaul the military’s system for moving military members’ belongings from one duty station to another has cleared its latest technical hurdle and is finally ready to start being used for moves, company officials involved with the multibillion dollar contract told investors Tuesday.
A new round of IT integration testing, conducted in January, proved “successful,” said Stuart Bradie, the president and CEO of KBR. HomeSafe, the holder of the up to $17.9 billion Global Household Goods Contract (GHC), is a joint venture between KBR and Tier One Relocation.
Problems with integrating U.S. Transportation Command’s systems with the vendors’ technology, called HomeSafe Connect, were the latest hurdle in implementing the moving contract, which Defense officials previously planned to being using for military moves last September. Now that those issues have been ironed out, HomeSafe and DoD intend to start conducting “test moves” involving short-distance shipments this spring, Bradie said.
“The volume ramp will be in a controlled manner through the year with the expectation of significantly ramping up into 2025, especially the busy season and international moves will then follow as we head into 2026,” he said. “So in short, a delay of one year. Though a delay is always frustrating, I believe it has allowed both sides that time to direct the startup and of course the ramp, which ultimately is a good thing.”
Supplier base will be adequate, company says
Bradie also sought to reassure investors that HomeSafe will have enough participation from the moving industry to successfully implement the contract. The company does not operate any trucks or employ any movers on its own; it will rely entirely on subcontractors to conduct the work.
Federal News Network reported in January that few, if any of DoD’s current moving providers are willing to take part in the GHC contract, partly because the rates HomeSafe is offering are significantly lower than what DoD is currently paying the companies under its existing moving system, known as DP3. Several traditional movers said they would lose money if they agreed to take shipments under the new rate structure.
But Bradie dismissed those concerns as “media noise.”
“The intent of this program is to redefine the moving experience of our military personnel and their families, and to deploy an IT backbone with intelligence to retain data and knowledge that allows for optimization and importantly, accountability. To achieve this, we require a certain level of disruption and of course, disruption leads to change,” he said. “The objective is to disrupt the industry so it becomes far more competitive and a lot of the middle layers are taken out. We get to focus on the actual truckers and their families, and we help them grow their businesses because they’re performing and they’re accountable. So I expect more noise in that sense. Am I concerned about the rate structure? No, I’m not. I think we will work through that with TRANSCOM.”
Bradie said HomeSafe now has 380 “fully executed” agreements in place with moving subcontractors, and that “several” large van lines have told the company they are willing to commit to working under the new moving contract once the program reaches higher volumes of moves. He did not specify which companies have agreed to participate, and a HomeSafe representative did not immediately respond to an inquiry from Federal News Network seeking more details about developments in the supplier base for the moving contract.
However, in a January interview, Matt Dolan, HomeSafe’s president, acknowledged the company faces an uphill battle in persuading moving companies to sign on.
“I’ve got a lot of work to do to convince them,” he told Federal News Network. “I don’t think the whole story has been told, but I think the one thing that’s definite is that this is going forward. TRANSCOM is committed, and we’re committed. Compensation will always be an issue, but TRANSCOM has been a great partner and there are methods to take that into account. I have great friends in industry who give me their straight feelings on it, and I don’t deny any of it. But we think we’ll be successful.”
Officials from U.S. Transportation Command are also scheduled to update reporters on the results of the IT integration testing and the moving contract’s next steps on Tuesday afternoon. This story will be updated with developments from that briefing.
The post DoD’s multibillion dollar moving contract overcomes latest IT integration hurdle first appeared on Federal News Network.