DOD has long been concerned about the quality of its nearly billion and half dollar annual program to transport, store, and manage the household goods and unaccompanied baggage of its servicemembers and employees with permanent change of station and other type orders. Some of the concerns related to poor service from its movers, excessive incidence of loss or damage to service members’ property, and high claims costs to the government. All these problems contributed to a poor quality of service for persons using the system. Consequently, DOD proposed reengineering the personal property program as a quality-of-life initiative. Its primary goals were to substantially improve and put on par with corporate customer standards, the quality its military personnel and their families received from DOD’s contracted movers; simplify the total process—from arranging the moves to settling the claims; and base the program on business processes characteristic of world-class customers and suppliers. Generally, DOD must acquire the goods and services it needs through the competitive acquisition system consisting of the statutes in chapter 137 of title 10 of the United States Code and the primary implementing regulations contained in the Federal Acquisition Regulation (FAR). However, pursuant to 49 U.S.C. 13712, the acquisition of transportation services of a common carrier through the use of a government bill of lading is not subject to the acquisition laws. Instead, these services have been acquired based upon published rates in accordance with procedures contained in DOD transportation regulations. A key feature of MTMC’s proposal to reengineer the personal property program is to simplify the process of acquiring transportation services and to bring it in line with the government’s acquisition of most other services by using multiple award, fixed-price, indefinite delivery/indefinite quantity-type contracts awarded under the competitive acquisition system. MTMC’s proposed contracts would cover statewide services and provide for a base and several option years. The solicitations for the contracts would be open to all responsible offerors, including carriers, forwarders, and relocation companies. Awardees would be selected in accordance with solicitation evaluation factors, which will include such elements as technical or operational requirements, past performance, subcontract plan, and price. To achieve these goals and to comply with congressional direction, MTMC is proposing to begin a pilot test. The plan is to begin the test in early 1997 and run it for at least a year. Fifty percent of the DOD household goods and unaccompanied baggage moving from the test area—North Carolina, South Carolina, and Florida—to all other states, except Alaska and Hawaii, and to Europe, would be included in the test. The other 50 percent would continue moving in the existing program. Industry objected to MTMC’s proposal, particularly because of what it perceived as the negative impact that MTMC’s proposal would have on small business moving companies. It offered for consideration an alternative plan having two distinct programs, one for handling domestic shipments and another for handling international shipments. The industry proposal would not be based on the competitive acquisition system but would use a government bill of lading to acquire the services in accordance with procedures contained in DOD and the General Services Administration transportation regulations. As a result of the initial joint DOD/industry working group session, DOD and industry agreed to the following goals for the reengineered personal property program. These were to 1. Provide quality service 2. Improve on-time pickup 3. Improve on-time delivery 4. Achieve high customer satisfaction in relationship to the entire move process 5. Adopt corporate business processes that lead to world-class customer service 6. Lower loss/damage and lower claims frequency and claims averages 7. Simplify the system, including reducing administrative workload 8. Ensure capacity to meet DOD’s needs for quality moves 9. Provide opportunity for small businesses offering quality service to compete for DOD business as a prime contractor and 10. Provide best value moving services to the government. Our assessment of the extent to which each proposal met the goals was necessarily limited by the lack of precise definitions of each goal and the way to achieve it. Moreover, the proposals were written in such a way that did not specifically address how each would achieve the stated goals. We necessarily had to interpret the goals based on our observations and review of available material and assess each proposal’s ability to meet those goals using our knowledge of the existing personal property program, our understanding of the proposals, associated documents, attendance at all of the working group meetings, a review of the transcripts of the meetings, and our prior studies. DOD’s nearly billion and a half dollar annual personal property program—household goods and unaccompanied baggage—is run centrally by the headquarters office of MTMC but administered locally by about 200 military and DOD transportation offices around the world. DOD relies almost exclusively on commercial movers, both directly with more than 1,100 moving van companies (carriers) and forwarders and indirectly with thousands more agents and owner-operator truckers working for the carriers and forwarders. The program consists of three major processes: carrier/forwarder approval, rate solicitation, and traffic distribution. To participate in the program, a carrier or forwarder must first be approved by MTMC. This requires proof, or certification, that the carrier or forwarder has the requisite state or federal transportation operating authority and agrees to abide by the terms and conditions in MTMC’s tender of service. The carrier or forwarder must also be approved by the local military and DOD transportation office at which the company is planning to serve. This requires proof, or certification, in the form of a letter of intent that the company has local agents ready and able to meet the local installation’s needs. MTMC solicits rates every 6 months. Each carrier and forwarder must file rates individually for the particular traffic channel it intends to serve. For the domestic part of the household goods program, rates are submitted as a percentage discount, or premium of a baseline schedule of rates by origin installation and destination state channel. For the international part of the program, rates are filed as a fixed dollar and cents per hundredweight basis by state and overseas area, or other subdivision channel. Carriers and forwarders have two chances to file rates before the beginning of each rate cycle—an initial rate filing and a “me-too” rate filing in which a carrier or forwarder can lower its initially filed rate to that of any other carrier or forwarder. Rates cannot be changed during the 6-month rate cycle, except for special cause, but they can be canceled at various times during the rate cycle. Each local military installation must distribute its traffic using a traffic distribution roster. Carriers and forwarders are placed on the rosters for each channel by order of rate level and quality score. In the domestic program, traffic is distributed on the basis of low-to-high rate, with highest quality scored carriers given the first 20,000 pounds. In the international program, the forwarder or forwarders initially offering the low rate for the particular channel are given a pre-specified percentage of the traffic on that channel. Overall, MTMC’s proposal would result in a program that would operate in much the same way other DOD programs operate for acquiring goods and services. Emphasis is placed on assessing quality of service in the contractor selection process and obtaining military member satisfaction with the services received. At the first meeting of the DOD/industry working group, MTMC provided a briefing on its proposal. Following that meeting, on June 24, 1996, MTMC provided the working group with a draft request for proposals summary. The summary described a standardized program for handling both domestic and international shipments. It laid out MTMC’s proposed acquisition strategy and the major events that MTMC expected to occur in the proposed acquisition process. The MTMC proposal is the result of the DOD/industry working group process and includes a number of features put forward by industry. Under its plan, MTMC would make major changes to the existing carrier/forwarder approval, rate solicitation, and traffic distribution processes. The existing approval process would be eliminated and replaced by a contract award process. Prices would be fixed for 1 year, with no provision for increases during the contract period. Rate solicitation would be based on competitive acquisition procedures used by government in procuring other types of goods and services and eliminate the twice yearly re-solicitation of rates under the current system. Traffic distribution would be limited to the number of contractors receiving awards. Key points in MTMC’s acquisition strategy were that offerors would be required to submit proposals addressing technical factors (i.e., how the offeror proposed to perform specified technical or operational requirements), past performance, subcontracting plan, and price. MTMC said that it anticipated that price would be less important than the other factors combined. Award would be made only to responsible offerors whose offers conformed to the solicitation and represented the best overall value to the government—price and other evaluation criteria considered. There were no restrictions on the type of company that could compete for the contracts. Therefore, companies other than licensed carriers and forwarders—the only type of companies now allowed to compete for DOD traffic—would be allowed to make an offer for the DOD business.