GAO

United States General Accounting Office

Report to Congressional Committees

June 1999 DEFENSE 

TRANSPORTATION

Plan Needed for 

Evaluating the Navy 

Personal Property 

Pilot

GAO/NSIAD-99-138

Page 1 GAO/NSIAD-99-138 Defense Transportation

United States General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-282502 Letter

June 23, 1999

Congressional Committees

Since 1994, the Department of Defense (DOD) has been engaged in

initiatives to reengineer the personal property program to simplify current

processes, control program costs, ensure quality of service by adopting 

commercial business processes characteristic of world-class businesses, 

and relieve carriers of DOD-unique terms and conditions. We recently

testified before the Military Readiness Subcommittee, House Armed

Services Committee, on the results of the Army’s pilot and DOD’s plans to

evaluate the other three pilots that are planned or under way.

1 The 

statement of managers in the conference report on the 1997 DOD 

Appropriations Act conference report directed us to validate the results 

and savings achieved from any personal property pilot program before 

DOD proposes further expansion of such programs.

2 In January 1998, the 

Navy began a servicemember arranged move pilot that allows

servicemembers to select a carrier and arrange their own moves. This

report provides status information on the Navy pilot and our assessment of 

plans for evaluating the pilot’s results.

Results in Brief Between January 1998 and March 1999, 223 servicemembers have used the

pilot program to arrange their own move rather than use the current 

program. Participation has been relatively low compared to the other three 

pilots under way or planned, which involve substantially more shipments—

approximately 1,400 to 45,000 shipments annually. Survey data indicate 

that participants are satisfied with the pilot and would use the option again. 

Because the pilot offers servicemembers a choice between the current

program and arranging their own move, implementing the option increases

the workload for local personal property officials.

The member arranged move option is not featured in any of the other 

pilots, which are broader in scope and are intended to replace the current 

1Defense Transportation: Efforts to Improve DOD’s Personal Property Program (GAO-T/NSIAD-99-106,

Mar. 18, 1999).

2House Report 104-863 (Sept. 28, 1996) p. 865.
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program. While the U.S. Transportation Command is responsible for 

evaluating all of the pilots to determine which one could provide better 

long-term results, its plan for doing so has not been finalized. In addition, 

the U.S. Transportation Command’s draft evaluation plan proposes to 

collect information on the extent the Navy pilot works as an option within 

the current program at a few Navy sites, which may not provide adequate 

data to assess the Navy pilot’s feasibility or its compatibility with the other 

pilots’ results.

Consistent with the recommendation in our report on the Army’s Hunter 

pilot (that DOD should develop a comprehensive strategy for testing each 

of the approaches), we are recommending that, in developing this strategy, 

the Secretary of Defense consider testing the Navy pilot and/or its unique 

features in conjunction with one or more of the other pilots.3

Background The Navy pilot allows servicemembers the option of either participating in 

the current program or of selecting their own carrier from a list of 

approved small business carriers.4 Key features of the servicemember 

arranged move include shipment location information, direct claims 

settlement with the carrier, full replacement value for lost or damaged 

household goods, and payment via the government charge card. Initiated 

in January 1998, the pilot included only shipments originating at Puget 

Sound, Washington, headed to San Diego, California; Norfolk, Virginia; New 

London, Connecticut; Pensacola, Florida; and Jacksonville, Florida. To 

increase participation, the pilot’s origin site was expanded from Puget 

Sound (including Whidbey Island and Everett, Washington) to include San 

Diego, Norfolk, and New London in July 1998. However, due to potential 

competition with another pilot that will also serve the Florida area, 

Pensacola and Jacksonville remain as destination sites only. The pilot does 

not have a specific end date; however, DOD established a target in the 

November 1997 Defense Reform Initiative Report to offer the Navy option 

to every servicemember by January 1, 2000. 

The Navy pilot is one of four quality-of-life initiatives DOD is pursuing to 

change the way it is currently doing business, adopt commercial business 

3Defense Transportation: Army’s Hunter Pilot Project Is Inconclusive but Provides Lessons Learned

(GAO/NSIAD-99-129, June 23, 1999).

4In the motor freight and transportation industry, firms with annual gross revenues of $18.5 million or 

less are classified as small businesses. See Federal Acquisition Regulation 19.102.
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practices, and achieve quality moving services for military families. The 

other three pilots are described below.

• The Army’s pilot at Hunter Army Airfield, Savannah, Georgia, which was

initiated in February 1996, is a quality-of-life effort to improve the

relocation process and to test commercial practices in a military 

environment. Services provided by the contractor include point-to-point

move management with a single point of contact for the member, 

assistance in buying/selling a residence, full replacement value for lost

or damaged household goods, direct claims settlement with the 

servicemember, and visibility of the shipment for approximately 1,400 

annual moves. The contract will end on September 30, 1999.

• In January 1999, the Military Traffic Management Command (MTMC), 

which manages the current personal property program, began a pilot

involving 50 percent of the moves in North Carolina, South Carolina, and

Florida, which will total approximately 18,500 moves annually. Key 

features of the pilot include the selection of carriers based on

servicemember satisfaction and past performance rather than on price

alone; achieving stronger carrier commitment through long-term 

contracts; offering full-value replacement protection and direct claims

settlement to users. The pilot is planned to run for 3 years, ending 

September 2002.

• DOD announced on February 12, 1999, that it intended to begin the Full

Service Moving Project as a fourth test. This pilot would be similar to

the pilot at Hunter Army Airfield, with modifications based on the 

Army’s lessons learned, and it would involve a larger number of moves

(approximately 45,000 annually). The pilot would be tested in the 

National Capital (Washington, D.C.) Region, Georgia, and North Dakota. 

Like the Army pilot, it is intended to replace the existing program by 

using a contractor or contractors to provide both transportation and

move management services. No official start date has been set for this 

pilot program.

Status of the Navy Pilot As of March 1999, 223 servicemembers have participated in the pilot. In its 

second year of operation, the pilot has been expanded from one to four 

shipment sites. Program results thus far show (1) participation has been 

relatively low compared to the other pilots that are under way or planned,

(2) servicemembers are satisfied arranging their own move, according to

limited survey data, and (3) workload would increase for personal property 

officials because this option adds an alternative to the current program.
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Servicemember 

Participation Is Low

As of March 26, 1999, a total of 223 members have participated in the pilot 

and 132 moves have been completed. Participation has been low, in part, 

because of the pilot’s short duration and eligibility restrictions. Although 

the Puget Sound office began to offer this option in January 1998, the other 

three sites did not offer it until late July 1998, and then only for Navy 

military members moving to one of six destinations. The pilot’s eligibility 

restrictions exclude civilians and members of the other services. Also, only 

certain types of domestic household goods shipments are eligible. The pilot 

excludes shipments of boats and mobile homes as well as shipments from 

non-temporary storage or from a mini-warehouse. Shipments must weigh 

at least 3,000 pounds and are expected to cost between $2,500 and $25,000.

As of the end of calendar year 1998, the participating personal property 

offices reported interviewing 1,083 Navy members that were moving to or 

from the six pilot sites to determine whether their shipments met pilot 

eligibility criteria. Some 573, or 53 percent, of them had eligible shipments 

and 133, or 23 percent, selected the option. Over 90 percent of those 

determined as ineligible had household goods not weighing at least 3,000 

pounds. Site officials reported that about 70 percent of eligible members 

cited the effort involved in selecting a carrier as the primary reason that 

they did not use the option (see table 1 for participant information by site).5

Table 1: Number of Participants by Site and Program Status, 1998

a“Interviews” includes only those servicemembers who planned to move to a participating site.

b“Eligible” includes servicemembers who had shipments that met the pilot’s eligibility restrictions.

c“Select pilot” includes servicemembers that participated in the pilot program. 

dThese figures include shipments from the Whidbey Island Naval Air Station. Also, Puget Sound 

began offering the option in January 1998, whereas the other sites began in July 1998.

5After October 1998, pilot officials discontinued the requirement for sites to report the reasons for 

ineligibility and for members not selecting the pilot because data showed the same dominant reasons. 

However, sites still report the overall number of Navy members interviewed, eligible, and participating.

Puget Soundd Norfolk New London San Diego Total

Interviewsa 420 145 247 271 1,083

Eligibleb 149 93 115 216 573

Select pilotc 78 15 19 21 133

Move completed 54 5 9 10 78

Move in-process 24 10 10 11 55
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Navy officials have recently modified eligibility requirements to increase 

participation in the pilot. The major changes would increase eligibility by 

(1) reducing the weight minimum from 3,000 pounds to 1,000 pounds, (2) 

allowing boats, and (3) eliminating current restrictions to allow shipments 

to any domestic destination.

Limited Customer Survey 

Results Indicate Satisfaction 

With Pilot

To measure customer satisfaction with the pilot, the Navy uses a

nine-question customer survey that servicemembers are asked to fill out 

and return after the move is completed. The survey includes questions 

pertaining to pickup and delivery time, loss, damage, and overall 

satisfaction. The survey asks, among other things, if the move was of a 

better quality than the servicemembers’ prior move and if the customer 

would (1) choose the pilot again, (2) recommend it to someone else, and 

(3) use the same carrier again. 

As of February 1999, the Navy had received 30 customer satisfaction 

surveys. These surveys are predominantly from the Puget Sound personal 

property office because Puget Sound was the first site to offer the pilot. Of 

the 30 surveys, 23 indicate that the pilot was a better quality move than 

other military moves. Eighteen of the 30 shipments (60 percent) had no 

claims, and 12 had a claim. Of the 12 claims made, only 2 exceeded $500. 

One of these claims was for $1,900 for broken china. Despite this damage, 

the customer responded that this was a better quality move than prior ones 

and stated that they would use the same carrier and the pilot again (see 

table 2 for selected survey responses).6 

Table 2: Summary of Survey Responses to Selected Questions

aThe numbers in this row do not add to 30 because two surveys did not contain the question regarding 

whether the servicemember arranged move was a better quality move than other military moves.

6The carriers, not the government, settle the claims directly with servicemembers.

Question Yes No No difference

Better quality move?a 23 4 1

Use pilot again? 27 3

Any claims? 12 18

Recommend the pilot? 27 3
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Increased Workload at 

Personal Property Offices

While the pilot offers advantages to the servicemember, it would add to the 

workload of the personal property officials who are responsible for the 

bulk of day-to-day program management. Among their additional duties, or 

duties that were previously handled by MTMC, are negotiating agreements 

with participating small business carriers, providing individual counseling 

to potential participants, maintaining up-to-date carrier information and 

performance data, and tracking customer satisfaction survey results. 

These are additional duties not previously handled by the personal 

property office. 

Local contracting officers at each participating installation enter into 

agreements with companies that offer acceptable discounts off of 

commercial rates. The agreements are entered into with companies that 

are self-certified as small businesses and on MTMC’s approved list. These 

agreements provide for the use of a government charge card for simplified 

payment and for direct claims settlement with the carrier at full repair or 

replacement value at no additional cost to the government. In addition, 

carriers are required to provide information on a shipment’s location 

through the use of a toll-free help line and a pager for direct delivery 

notification, which are designed to improve service and reduce storage 

costs. 

The personal property office provides servicemembers with the names of 

participating movers that have been determined to have reasonable prices. 

The property offices also maintain carrier quality books that contain a 

carrier’s performance history, the returned customer satisfaction surveys, 

and the carrier’s marketing materials. Participating servicemembers are 

required to contact at least three moving companies and document the 

basis for their preference of one of the carriers. The contracting officer can 

then make the selection considering both price and the servicemember’s 

recommendation concerning non-price factors such as quality. The award 

is made to the firm selected under the simplified acquisition procedures 

contained in Federal Acquisition Regulation part 13.

Plan for Evaluating the 

Pilot Is Incomplete

The Navy does not plan to conduct an evaluation of the pilot program 

separate from its own evaluation. The U.S. Transportation Command 

(USTRANSCOM) is currently in the process of developing and coordinating

an evaluation plan with the services to evaluate the personal property pilot 

tests, and it will make a recommendation as to the follow-on course of 

action. In this regard, the Navy has modified its customer survey questions 
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so that the survey questions match the USTRANSCOM survey questions. 

Navy officials are also accumulating pilot project transportation costs and 

developing a methodology to compare these costs with those that the 

government would have otherwise paid. 

Presently, the pilot has only been tested as an option to the current 

program at a few Navy sites and not as an option at the other pilot sites. 

The other pilots are designed to test an approach to replace the current 

program. However, the USTRANSCOM draft evaluation plan does not 

address the feasibility or potential benefits of incorporating the pilot option 

into the pilots that may replace the current program. Further, the 

evaluation plan does not directly assess the unique aspects of the pilot, 

which include limiting carrier selection to small business carriers and using 

the government charge card for payment. Consequently, DOD may not 

have the information it needs to craft a DOD-wide personal property 

program. 

Navy officials are concerned about several aspects of the USTRANSCOM 

evaluation plan. In March 1999, they stated that the data elements to be 

collected should be better defined, that a consistent evaluation time period 

should be established, and that expert advice should be sought. The 

officials also believe that cost comparisons of overhead will be difficult 

because the same personnel who administer the current program are 

implementing the Navy pilot. In our recent testimony and report on the 

Army’s Hunter pilot and in our comments on several draft evaluation plans, 

we have stated similar concerns about the current evaluation plan. These 

concerns include the need to (1) develop a comprehensive strategy for 

testing the unique characteristics and/or processes of each pilot and (2) use 

expert advice in finalizing a methodologically-sound evaluation plan. 

Conclusions The Navy pilot program differs from other ongoing or proposed pilot 

programs because it adds an option to the current program; it is not 

intended to replace the current program. The pilot participation levels and 

results thus far provide general information about the program’s potential 

benefits and customer satisfaction compared to the current program—

which DOD is proposing to replace. Since the Navy pilot option is not to be 

integrated and tested with the other pilots, information on the viability of 

providing this option will only be available in comparison to the current 

program. Further, the draft evaluation plan does not identify a specific 

method for assessing the pilot’s unique features. 
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Recommendation Consistent with the recommendation in our report on the Army’s Hunter 

pilot that the Secretary of Defense develop a comprehensive strategy for 

testing each of the approaches, we recommend that the Secretary of 

Defense, in developing this strategy, consider testing the Navy pilot and/or 

its unique features in conjunction with one or more of the other pilots. 

Doing so would test the Navy pilot in an environment that is more 

consistent with the changes being considered and likely to be 

implemented.

Agency Comments DOD stated that it concurred with the report and its recommendations. 

Specifically, DOD stated that, as part of its plan to develop a 

comprehensive strategy for evaluating each of the pilots, it would 

determine—in concert with the services—how best to incorporate the 

features of the Navy pilot into the other pilots. DOD’s comments are 

reprinted in appendix I.

Scope and 

Methodology

To determine how the Navy plans to implement and evaluate the pilot 

program, we reviewed available program documents and met with program 

management officials at the Naval Supply Systems Command, 

Mechanicsburg, Pennsylvania. We discussed how the pilot is being 

implemented and managed, the contract terms and conditions, and the key 

characteristics of the pilot. Further, we discussed and reviewed the 

customer survey results and other data that will be provided to 

USTRANSCOM for its evaluation of the pilot. We also discussed with Navy 

Supply Systems Command and Naval Audit Service officials their concerns 

with the USTRANSCOM evaluation plan.

We visited and interviewed officials at the Fleet and Industrial Supply 

Center, Puget Sound, Bremerton, Washington, to determine how the pilot 

was implemented at its first location. We discussed the process used to 

establish and manage the pilot at Puget Sound while continuing to operate 

the current system. Additionally, we discussed their experiences and 

observations with the pilot. We also visited and interviewed program, 

contracting, and government charge card officials at the Fleet and 

Industrial Supply Center, Norfolk, Virginia, to determine how 

implementation was progressing and to compare the pilot operations at 

Puget Sound to those of Norfolk.
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To provide information on the pilot’s progress, we visited and interviewed 

Naval Supply Systems Command officials to determine how sites were 

selected for expansion after the pilot was established at Puget Sound. 

Further, we attended a “lessons learned” conference that included personal 

property officials from all of the pilot sites as well as from the Navy 

Transportation Support Center, Bureau of Naval Personnel, and the 

Defense Finance and Accounting Service to understand the problems these 

organizations encountered with the pilot and possible solutions.

To obtain information on pilot participation, we reviewed weekly reports 

summarizing the number of military members that were eligible and those 

that were selected to participate. We also discussed the reasons for their 

participation with site officials.

To provide information on available cost data, we reviewed the cost 

comparisons developed by site officials that compare actual pilot 

transportation costs to estimated/constructed costs for the same move 

under the current system. We did not independently verify any data 

reported by pilot sites or Naval Supply Systems Command headquarters.

Our review was conducted between October 1998 and April 1999 in 

accordance with generally accepted government auditing standards.

 We are sending copies of this report to the Honorable William S. Cohen, 

Secretary of Defense; the Honorable Richard Danzig, Secretary of the Navy; 

General Charles T. Robertson, Jr., Commander in Chief, USTRANSCOM; 

Rear Admiral Donald E. Hickman, Commander, Naval Supply Systems 

Command; Major General Mario F. Montero, Jr., Commander, MTMC; and 

the Honorable Jacob J. Lew, Director, Office of Management and Budget. 

We will also make copies available to others upon request.
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Please contact me at (202) 512-8412 if you or your staff have any questions 

concerning this report. Major contributors to this report are listed in 

appendix II.

David R. Warren, Director

Defense Management Issues
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List of Congressional Committees

The Honorable John Warner

Chairman

The Honorable Carl Levin

Ranking Minority Member

Committee on Armed Services

United States Senate

The Honorable Ted Stevens

Chairman

The Honorable Daniel K. Inouye

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Floyd Spence

Chairman

The Honorable Ike Skelton

Ranking Minority Member

Committee on Armed Services

House of Representatives

The Honorable Jerry Lewis

Chairman

The Honorable John P. Murtha

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

House of Representatives
Page 12 GAO/NSIAD-99-138 Defense Transportation

Contents

Letter 1

Appendix I

Comments From the 

Department of Defense

 14

Appendix II

Major Contributors to 

This Report

15

Tables Table 1: Number of Participants by Site and Program Status, 1998 4

Table 2: Summary of Survey Responses to Selected Questions 5

Abbreviations

DOD Department of Defense

MTMC Military Traffic Management Command

USTRANSCOM U.S. Transportation Command
Page 13 GAO/NSIAD-99-138 Defense Transportation
Page 14 GAO/NSIAD-99-138 Defense Transportation

Appendix I

Comments From the Department of Defense ApIenxdi
Page 15 GAO/NSIAD-99-138 Defense Transportation

Appendix II

Major Contributors to This Report ApxIendi

National Security and 

International Affairs 

Division, Washington, 

D.C.

Charles I. Patton, Jr., Associate Director

Nomi R. Taslitt, Assistant Director

Robert L. Self, Senior Evaluator

Office of the General 

Counsel, Washington, 

D.C.

John G. Brosnan, Assistant General Counsel

Norfolk Field Office Daniel A. Omahen, Evaluator-in-Charge

John R. Beauchamp, Senior Evaluator

(709369) Letr
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