Report | May 21, 2014

Opportunities for Cost Savings and Efficiencies in the DoD Permanent Change of Station Program

DODIG-2014-076

Objective

The objective of the audit was to determine whether DoD could implement potential cost savings and efficiencies throughout the DoD Permanent Change of Station (PCS) Program.

Finding

While DoD and the Services implemented or plan to implement various initiatives to reduce costs and improve the PCS Program, additional efficiencies and savings within the $4.2 billion PCS Program could be realized by implementing controls to ensure that:

  • the Services are tracking and managing nontemporary storage (NTS) entitlements, and service members assume management and financial responsibility and payment for NTS liabilities after the initial entitlement period expires;
  • the Army improves oversight of overpayments made for service members who exceed their maximum household goods (HHG) weight entitlements when conducting legacy system multiple shipments;
  • personnel property shipping office personnel use the most cost-effective method to accomplish domestic moves weighing 1,000 pounds or less;
  • DoD imposes weight limits for HHG shipments during certain local moves;
  • DoD uses the most cost-effective mode of transportation for all overseas PCS moves; and
  • DoD considers implementing a statutory incentive that would allow service members to voluntarily reduce the weight of shipped HHG and receive a portion of the savings.

Recommendations

We recommend that Under Secretary of Defense (Comptroller)/ Chief Financial Officer, DoD; Under Secretary of Defense for Personnel and Readiness; and the Deputy Assistant Secretary of Defense for Transportation Policy, convene a working group to study the feasibility of implementing a statutory incentive to encourage sharing of costs savings when minimizing the weight of HHG shipments.

We recommend that Under Secretary of Defense for Personnel and Readiness, and the Deputy Assistant Secretary of Defense for Transportation Policy, update the Joint Federal Travel Regulations to remove authority for the Government to continue paying NTS costs after the entitlement period expires; and to apply weight limitations to local moves executed at the convenience of the Government.

We recommend that the Commander, U.S. Transportation Command, update the Defense Transportation Regulation to remove language allowing the Services to pay for expired NTS lots after the initial entitlement period, evaluate the cost?effectiveness of using each Patriot Express channel for PCS travel and pending the results of the review, take appropriate action to reduce the number of Patriot Express missions flown, if warranted.

In addition, we recommend the Services develop quality control and standard operating procedures to ensure personal property shipping office personnel perform quarterly reviews of all NTS lots; and establish policy requiring personal property shipping office personnel to use the most cost-effective method to ship and store domestic HHG weighing 1,000 pounds or less. Finally, we recommend the Army implement controls requiring that overpayments made for service members exceeding maximum HHG weight entitlements for legacy system multiple shipments are tracked and forwarded to the appropriate entity for recoupment.

Management Comments and Our Response

The Deputy Comptroller (Program/Budget), responding for the Under Secretary of Defense (Comptroller)/ Chief Financial Officer, DoD; the Acting Director, Force Projection and Distribution, responding for the Deputy Chief of Staff, Army Logistics; the Deputy Director, Headquarters Air Force Logistics, responding for the Director, Headquarters Air Force Logistics; and the Staff Director, Headquarters Marine Corps, responding for the Director, Marine Corps Logistics Plans, Policy, and Strategic Mobility, agreed to their respective recommendations and addressed all of the specifics of the recommendations.

Comments from the Assistant Secretary of Defense for Readiness and Force Management, responding for the Under Secretary Defense for Personnel and Readiness, and the Commander, Naval Supply Systems Command, partially addressed the recommendations. We received comments from the Deputy Assistant Secretary of Defense for Transportation Policy and the Commander, U.S. Transportation Command, too late to include them in the final report.

We request that the Under Secretary of Defense for Personnel and Readiness; Deputy Assistant Secretary of Defense for Transportation Policy; Commander, U.S. Transportation Command; and the Commander, Naval Supply Systems Command, provide comments in response to this report by June 20, 2014. If the Assistant Secretary of Defense for Transportation Policy and the Commander, U.S. Transportation Command, do not submit additional comments, we will consider their comments to the draft report as the management response to the final report.

This report is a result of Project No. D2014-D000CJ-0028.000.