DOD decides against privatizing service members’ household goods moves

Defense Secretary Pete Hegseth decided to reverse course on the idea to privatize the process that moves service members’ household goods.

Instead, he directed officials to improve the current program, which will remain in place for at least three years, according to an advisory sent Wednesday to the military services and personal property shipping offices, as well as companies previously approved to move troops and families under the “tender of service” program, the DOD’s legacy system for managing moves.

During the next three years, officials will modernize the program into a “government-controlled software solution” and complete an ongoing market study by research economists of commercial moving and storage rates, the advisory says.

The work will include validating rates for fairness and reasonableness of the tender of service program and updating or replacing business rules.

One large hurdle with the department’s attempt to privatize the management of military moves, which was terminated in June, was the rates offered under the new contract. Some moving companies declined to work with the new program, citing lower rates than they were paid traditionally.

Hegseth’s decision is based on the recommendations of the Permanent Change of Station Joint Task Force, which will continue its work until Aug. 31, 2026, “or until the establishment of a permanent follow-on organization,” Wednesday’s advisory reads. The advisory was sent by the task force and the Defense Personal Property Management Office at Scott Air Force Base, Illinois.

Hegseth formed the task force this summer to address immediate and long-term issues with the movement of household goods.

By Dec. 15, the PCS task force will provide a more detailed analysis of the options for a follow-on organization. Army Maj. Gen. Lance G. Curtis remains the task force commander.

It remained unclear Wednesday what other changes might be coming to the program, known as the Defense Personal Property Program, or DP3, which deals with hundreds of moving companies.

Hegseth orders immediate changes to troops’ household goods program

The approved recommendations are “the first major steps to transforming the DP3 strategy, capability, processes, and systems,” the task force advisory stated.

The task force sought input from the moving industry, as well as from service members and spouses.

After a particularly difficult moving season in 2018 that resulted in many lost and damaged shipments, U.S. Transportation Command began an effort to essentially privatize the moving process. Instead of dealing directly with the hundreds of movers participating in the legacy DP3 tender of service system, TRANSCOM contracted the function to HomeSafe Alliance through a $6.2 billion global household goods contract worth potentially up to $17.9 billion over nine years.

But in May, after a troubled start with relatively few moves, DOD terminated the contract with HomeSafe Alliance, citing its inability to perform the work. In addition to moving companies declining to work with HomeSafe because of the low rates, military families were facing delays or no-shows in pickups and deliveries.

Under the new system, HomeSafe was expected to be fully responsible for shipments from the time a moving company was assigned, to packing, hauling and unloading. HomeSafe was also supposed to handle any claims for losses or damages and provide accountability to a program that had for too long operated an onerous claims process and resulted in problems like lost or damaged items.

The new contract was based on the Federal Acquisition Regulation (FAR), the primary source of rules and policies for acquiring goods and services by the federal government.

Organizations representing companies that move military families’ household goods applauded Hegseth’s decision Wednesday to retain the current program.

“Maintaining and enhancing the existing Defense Personal Property Program will restore stability and trust for military families and moving companies alike — while allowing flexibility to build on that foundation through continued innovation and accountability,” said Katie McMichael, executive director of Movers for America, a coalition of more than 1,100 moving professionals and independent owner-operators who move military families.

Movers for America and the International Association of Movers said they appreciated the task force engaging with industry for input as they navigated a way forward.

IAM was pleased the task force “recommended a way forward that focuses on a modernized tender program as opposed to another attempted single prime [Federal Acquisition Regulation] contract model,” said Dan Bradley, vice president of government and military relations for the organization.

That’s the approach IAM recommended, he said, “as the quickest and most effective way to continue to build improvements in the moving program that benefits the service member.”