MTMC Strives for Customer-Friendly Personal Property Moves
By Rudi Williams
American Forces Press Service
ALEXANDRIA, Va., Oct. 16, 2000 Transportation specialists at the Military Traffic Management Command here have made a smart move that's saving big bucks and boosting customer satisfaction.
Previously, contracts to move service members' household goods went to the lowest bidder. For decades, the government considered only price and was "getting what it paid for," said Dinah Locklear, director of MTMC's household goods re-engineering pilot program.
The command scrapped the lowest-bid concept in favor of "lowest cost, plus quality service," she said.
"The government acquisition world thinks it smart not to always buy at the lowest price because of the potential for damages or inferior service, which leads to higher costs," Locklear said. "We still consider price, but we're adding quality service to our selection process."
The moving industry firmly resisted at first in the belief DoD wasn't sincere about being willing to pay more for quality service, she said. That resistance changed to acceptance and support.
"We've seen industry do a 180-degree turn," Locklear said. "Now, industry agrees that DoD needs to move away from a price-driven program and support changes that would improve the quality of service to our military members, their families and DoD civilian customers."
The pilot program to re-engineer the command's household goods shipment system, she said, aims to improve quality of life, eliminate inferior service, incorporate best business practices and improve customer satisfaction.
Locklear said the lowest-bidder method of doing things resulted in "extremely high rates" of loss and damage claims. Because the government acts as its own insurer, it may save on the move but it loses in claims and related costs. Also, service members lost money because the government paid their claims using the depreciated value of property.
Under the pilot program, the contractor, not the government, pays customers for their lost, stolen or damaged items -- at a higher rate than the government paid, she noted. The provision is a powerful incentive to do good work, and it discourages careless, butter-fingered contractors.
The government used to insure members at the rate of $1.25 per pound times the weight of the shipment, up to $40,000, Locklear said. The MTMC pilot program requires contractor coverage at $3.50 per pound times the net shipment weight, up to $63,000, she noted. Members with high-value shipments, before and now, still need to buy supplemental insurance for any gap between value and contractor liability.
"For example," Locklear said, "if a person values a shipment at $100,000 and it's totally destroyed, the carrier is only liable for up to $63,000.
"In the case of damages, if the customer and contractor agree on a settlement amount, the claim can be resolved and processed immediately," she said. Customers who disagree with all or part of a settlement can file a claim with their local military claims office. Locklear pointed out that contested pilot program claims revert to the old claims system based on the depreciated property values.
"The military claims office will try to get full replacement value from the contractor. If that happens, the money will be given to the customer," Locklear said.
Under the pilot program, contractors must conduct a pre-move survey with customers to determine the weight of their household goods, and they must arrange packing and pick up times. Locklear suggested that people with high- value items point them out to the contractor in case special packaging is needed. She also suggested obtaining additional insurance on expensive items.
MTMC officials evaluate contractors every 30 days using customer satisfaction survey forms. The surveys provide the command with the data needed to identify poor performers, Locklear said.
"Service members have the final say as to whether a shipping company continues working for DoD," she said.
Army Maj. Gen. Kenneth L. Privratsky, MTMC commander, said the pilot program began in January 1999 and is scheduled to end in January 2002.
"We awarded 36 contractors," he noted. "The shipments involve about half of service members moving from North Carolina, South Carolina and Florida to 13 regions nationwide and five overseas areas." More than 14,000 servicemen and women have been moved in the pilot, the general noted.
"So far, we've received favorable reports," Privratsky said.
MTMC moves about 650,000 shipments for service members and civilian employees and their families per year, making DoD the largest shipper in the world.
As of Aug. 31, the pilot program had processed 15,090 shipments and had received 7,689 completed survey forms. On the forms, 79 percent of the customers said they would use the same contractor again. Overall customer satisfaction rate was 89 percent out of 100. The command assigned the current low-bidder system a customer satisfaction baseline of 75 percent.
MTMC's pilot program is one of three ongoing DoD initiatives to streamline the relocation process. The other two pilot efforts are the Army's "Hunter Army Airfield Program" and the Navy's "Service-member-Arranged Move Program." A fourth initiative, the Full Service Moving Project, is due to begin soon. (See related story, "So Many Tests to Improve Moves It's Confusing, General Says", at www.defenselink.mil/news/Oct2000/n10122000_200010121.html.)