Over 3,000 State employees, along with their household effects, are transferred to new duty stations each year, of which about 1,000 employees are transferred from Washington, D.C., to foreign locations. State’s direct costs associated with the employee transfer process have typically exceeded $60 million annually in recent years. Indirect personnel costs are difficult to quantify due in part to the numerous offices and staff involved in the process. Other U.S. agencies operating overseas also routinely transfer large numbers of employees to foreign locations. For example, USAID and USIA alone transfer a total of approximately 1,000 employees annually. Many private sector firms also regularly transfer large numbers of employees overseas. State’s process for transferring employees overseas is inefficient, cumbersome, and costly. It requires employees to work with personnel in at least 12 bureaus and offices and involves over 150 support staff. There is no integrated data base containing all of the information needed to track and coordinate the employee’s transfer, so some data are entered into various systems repeatedly. Initially, an employee transferring abroad must contact several officials in the Bureau of Personnel for guidance and information. There are currently 38 counseling and assignments officers, whose responsibilities entail preparing assignment notifications and coordinating training for the employee being transferred. The counseling and assignments officers maintain close liaisons with State’s other Washington bureaus and the overseas posts. In the Assignment Support Division, personnel technicians are assigned to prepare travel orders and personnel actions, provide counseling, and give employees a checklist of 17 steps to complete in the transfer process. In addition, officials in the Bureau of Personnel’s Executive Office often work with employees who seek exceptions to departmental policy on matters such as entitlements for shipping household effects. They also provide certain administrative functions, such as adding accounting-related data to the employee’s travel order. Figure 1 illustrates the employee contact points for relocating overseas. In the Bureau of Administration, the employee being transferred has to contact several additional officials for counseling, guidance, and assistance. The employee is expected to (1) work with a counselor in the Transportation Division to arrange for the storage and/or shipment of household effects and (2) contact the Offices of Overseas Schools and Allowances if questions or related issues arise. The employee may also visit the Employee Service Center’s Foreign Service Lounge any time during the process. The Center helps an employee obtain information concerning the move, provides a checklist of 23 steps to complete, and helps register the employee’s new location. Other bureaus/offices that an employee typically deals with include the Bureau of Diplomatic Security for security briefings, the Bureau of Finance and Management Policy for pay advances and other payroll issues, the bureau/office/post that is gaining or losing the employee, the Office of Medical Services, and the American Express Travel Office. If in training at the Department’s Foreign Service Institute in Arlington, Virginia, the employee also has the option of working with transportation and travel representatives assigned to the mini one-stop processing unit and with a nurse from Medical Services. In addition, employees often work with personnel specialists in the regional bureaus to address administrative matters associated with their transfer, including changes in medical insurance coverage and addresses for tax/benefits purposes. State has known for years that its process for transferring employees and their households overseas was cumbersome and inefficient. State’s most recent attempt to examine the issue took place in 1994 and 1995 as part of its agencywide Strategic Management Initiative. State recognized that the transfer process had numerous problems: it took over 100 steps to complete a transfer, it lacked a single source fully familiar with the system, and it did not have a comprehensive data base for tracking the entire process. A working group recommended a complete overhaul of the transfer system, with a goal of having a simple, one-stop, customer-oriented program. The group’s recommendations included (1) establishing customer representatives in State’s Bureau of Administration to manage the transfer of employees from start (assignment notification) to finish (arrival at post and resolution of claims), (2) outsourcing certain processes, and (3) creating a new transfer data base for all participants in the process. According to Bureau of Personnel officials, these recommendations were not implemented largely due to State’s (1) focus at that time on improving its process for selecting/assigning employees to meet specific overseas post requirements and (2) reluctance to make the substantial organizational changes necessary for a successful reengineering of the process. Although the process remains essentially the same, State’s Bureau of Personnel took several steps to improve parts of the system under its domain. These included simplifying some of the forms required for a transfer, centralizing the location of its personnel technicians, and combining functions previously handled by separate assignments officers and career development officers into one position. The Bureau also began developing a new integrated personnel management system. In addition, the Department established a “mini” travel and transportation assistance unit for employees receiving training at its Foreign Service Institute. We interviewed four employees that were in the final stages of transferring from Washington, D.C., to an overseas post—the most onerous of all the possible transfer situations, according to the Strategic Management Initiative working group that examined the transfer process. The employees had mixed views concerning the process’ efficiency, but frequently described it as cumbersome and time consuming. Specific descriptions of some of the problems with the current process included the following: Too many people must be contacted to obtain the necessary forms and complete all the steps. No one person is available to coordinate the various requirements. It is not clear to whom family members could/should turn for help in solving relocation problems if the employee has already reported overseas or is not physically available to assist them. Progress through the system is seriously hampered if any delays are encountered, particularly in the process for obtaining a medical clearance. A clearance is required for a travel order, which is a prerequisite for finalizing travel, transportation, and other actions. There is no automated tracking system or single data base containing all of the information relevant to the employee’s transfer. The main tracking system is the employee’s personal working file, which is a manual set of various forms, checklists, and contacts. Appendix I shows in detail the typical steps and complexities involved in State’s current transfer process. The single most costly element of the overall transfer process is transporting employees’ household effects. Of the $62 million in direct costs related to transferring employees in fiscal year 1996, State spent about $36 million, or about 60 percent, on moving household effects. The indirect costs associated with the process are also high due to the complexity of the process and the numerous personnel involved. For example, State’s Transportation Division, which oversees shipments of both household effects and official supplies, employs 69 permanent staff and 38 contractor staff at its 6 locations (Washington, D.C.; 4 regional despatch agencies; and the European Logistical Support Office). The process that State uses for managing the bulk of its household effects shipments is very complicated, entailing multiple steps and handoffs. No single contractor is responsible for the entire move. For most shipments, State contracts separately for each segment of the move, including packing and crating of the household effects at the employee’s residence, trucking to the port, consolidating the effects with other shipments at the port, transporting by ocean or air, separating consolidated shipments at the destination port, trucking to a local contractor for delivery, and unpacking at the destination residence. This multistep approach is known as the “direct procurement method.” This method involves various combinations of State’s Transportation Division in Washington, D.C.; its four regional despatch agencies; and the European Logistical Support Office, to contract for, coordinate, and monitor each move segment. An additional disadvantage associated with the fragmented nature of this method is that it makes it difficult to document the total actual costs and to exercise accountability and control over the process. Figure 2 illustrates the multiple handoffs required for direct procurement shipments. State makes very limited use of “door-to-door” channels to contract with a single freight forwarder for shipping an employee’s household effects—a practice used throughout the private sector and seen as more cost-effective than using multiple vendors for the various segments of the same move. For example, in 1996, State used the door-to-door program for only about 16 percent of the 1,065 shipments from the United States to 38 overseas locations where use of the door-to-door program was feasible. Many private sector companies have recently reengineered their processes for international relocation to control the growing costs associated with their international operations and to provide better service to their employees. If State applied industry best practices to its process for transferring people, it could improve the quality of services to its employees and their families, reduce the time required for employees to complete the process, and possibly lower costs by reducing the number of staff and other resources required to administer the program. A 1995 study by a private consulting firm examined the overseas management policies of 30 corporations and identified several “best practices” that we believe should be considered for application to State’s transfer process. These include (1) centralizing program administration under the responsibility of one unit to have more specialized staff dedicated to the function; (2) providing one-stop shopping to improve employee satisfaction and accountability; (3) developing integrated information systems to eliminate outdated and duplicate systems, track costs, identify the status of key events, and reduce management burdens; and (4) outsourcing. The companies surveyed ranged from small to large, indicating that best practices are applicable regardless of the size of the overseas population. During our benchmarking exercise, we visited a number of companies that demonstrated how one or more of these best practices has been applied to improve the quality of services provided to their employees and/or to reduce costs. In addition, all of the companies that we visited used the door-to-door method of shipping household effects.