HomeReportsAll DoD OIG Reports

Audit of the DoD Personal Property Program Related to Household Goods Shipments DODIG-2020-046

Audit

PRINT  |  E-MAIL

Publicly Released: January 8, 2020

Objective

The objective of this audit was to determine whether DoD members received personal property shipments in a timely manner and whether proper actions were taken on household goods that were damaged or lost during permanent change of station moves.

Background

As of October 23, 2019, over 107,000 individuals signed a petition on Change.org to hold moving companies accountable for losses and damages incurred during the DoD military move process. Many DoD military families have complained about unexpected delays in pickups or delivery of their household goods. There also have been complaints about the moves themselves, which have resulted in loss and damage for some families.

The DoD is the single largest customer in the personal property shipping industry, representing approximately 15 percent of all domestic and international moves. U.S. Transportation Command (USTRANSCOM) is responsible for administering the DoD Personal Property Program. The DoD Personal Property Program was developed to improve the permanent change of station process for the DoD service members, civilians, and their families by promoting quality of service and streamlining the overall process. To implement the DoD Personal Property Program, the DoD developed the Defense Personal Property System (DPS), a web-based system that supports the DoD Personal Property Program with shipment management, invoicing, damage claims, and quality assurance of the DoD personal property shipments (shipments).

For FY 2018, the four Joint Personal Property Shipping Offices (joint shipping offices) that we reviewed processed 9,852 shipments, costing $102.3 million, that were delivered at least 5 days past the Required Delivery Date (delivery date) and had at least one claim filed for damaged or lost household goods. We selected a statistical sample of 311 shipments from these four joint shipping offices, costing $3.3 million, to review. The DoD members claimed a total of 3,575 damaged or lost household goods, valued at $24.5 million, on the 311 shipments reviewed. Of the 3,575 damaged or lost household goods, we reviewed 662 finalized damaged or lost household goods claims, valued at $8.5 million to determine if the DoD member received a replacement household good, a repaired household good, or the entitled compensation allowed under the Defense Transportation Regulation (DTR) and USTRANSCOM business rules.

Findings

We determined that of 9,852 shipments, the DoD members did not receive a projected 4,004 shipments (41 percent), costing $33.1 million, on or before the delivery date or the agreed-upon delivery date from the storage location. This occurred because the Transportation Service Providers (moving companies), which are selected by the shipping offices but conduct the move independently with the DoD members, had scheduling and equipment problems. Additionally, moving companies did not provide an explanation for delivering some of the shipments after the delivery date. As a result, DoD members and families did not receive their shipments timely and incurred additional costs for lodging, food, and rental or purchase of household necessities, which may be compensated through an inconvenience claim.

DPS data showed that 21 percent of all domestic household goods shipments had at least one damage claim filed during FY 2018. We determined that of the 311 shipments we reviewed, the moving companies resolved 622 of 662 finalized damaged or lost household goods claims (94 percent), valued at $8.4 million, with the DoD members in accordance with DoD guidance. However, the moving companies did not resolve 40 damaged or lost household goods claims, valued at $20,258 because the DoD members did not use the Military Claims Offices to process the 40 household goods claims. As a result, the DoD members did not receive the entitled compensation for 40 damaged or lost household goods.

Finally, we determined that DPS had system limitations and inaccuracies. Specifically, of the 9,852 shipments identified in DPS as being delivered late at the four joint shipping offices reviewed, we determined that the moving companies delivered a projected 5,692 shipments, costing $65.2 million, on or before the delivery date or met the agreed-upon delivery date from the storage location. Additionally, moving companies could not provide an agreed-upon delivery date from the storage location for a projected 156 shipments for us to use to determine whether the shipments were timely. DPS system limitations and inaccuracies occurred because the joint shipping offices are not required to validate destination information, including delivery dates in DPS.

Furthermore, DPS also inaccurately identified finalized household goods claims between the moving companies and the DoD members as in process. Specifically, DPS identified 342 of 793 damaged household goods claims, valued at $271,193, as in process that should have been identified as closed. This occurred because the moving companies and the DoD members did not update DPS when household goods claims were finalized and the joint shipping offices are not required to review household goods claims data to ensure it was properly entered into DPS. As a result, USTRANSCOM cannot rely on DPS delivery and claims information to determine whether DoD members received timely shipments and whether the DoD members’ household goods damage and loss claims were finalized.

Recommendations

We recommend that the USTRANSCOM Commander develop and implement a methodology that accounts for warnings in the performance score of the moving companies for the best value determinations and update the Defense Transportation Regulation to:

• issue warnings or letters of suspension to the moving companies within 14 days of missing the delivery date or the agreed-upon delivery date from storage location;

• contact the DoD members if they have not completed a Customer Satisfaction Survey within 1 month after they receive the shipment;

• help the DoD members and families file inconvenience claims with moving companies within 14 days of the missed delivery date;

• transfer the damaged or lost household goods claims to the Military Claims Offices if the DoD member decides to pursue reimbursement from the moving company;

• obtain and validate the delivery information in DPS within 14 days of the completed move; and

• review all household goods claims greater than 60 days old and contact the DoD members to determine the status.

Management Comments and Our Response

This report contains seven recommendations addressed to the USTRANSCOM Commander. Of the seven recommendations, four were unresolved and three were resolved but will remain open until further actions are taken.

The USTRANSCOM Chief of Staff responded for the USTRANSCOM Commander on all recommendations. The Chief of Staff did not agree with the recommendation to develop and implement a methodology that accounts for Letters of Warning in the performance score of the moving companies for the best value determinations. The Chief of Staff also disagreed with the recommendation to update the Defense Transportation Regulation to issue warnings or letters of suspension to the moving companies within 14 days of missing the delivery date or the agreed-upon delivery date from storage location. The Chief of Staff stated that USTRANSCOM agreed with the ultimate goal of the recommendations to improve service for customers of the DoD Personal Property Program, but also stated that a comprehensive approach must be taken to achieve reform. The Chief of Staff stated that issuing additional warnings, even if tied to best value determinations, would not result in improved service for customers of the DoD Personal Property Program. The Chief of Staff further stated that improved survey return rates represent a more feasible, immediate avenue to ensuring the best value determinations reward quality providers than incorporating warnings into the calculation.

Comments from the Chief of Staff did not address the specifics of the recommendations; therefore, the recommendations are unresolved. We agree that the increase in survey completion percentage would help develop a more accurate best value score, reward qualified moving companies, and hold moving companies accountable for missing the required delivery date or the agreed-upon delivery date from a storage location. However, we believe that the incorporation of warnings in the performance score of the moving companies for the best value determination would result in improved service for DoD members. For example, by including the warnings in the best value score, USTRANSCOM would have a direct and immediate impact on the moving company’s rating, which is used to determine what future shipments the company will be offered in DPS.

Additionally, the issuance of warnings would immediately hold the moving companies accountable for untimely shipments. We identified that the joint shipping offices issued warnings for only 20 percent of the identified late shipments. By inconsistently issuing warnings, USTRANSCOM is also reducing its ability to hold moving companies accountable by issuing suspensions, which could impact the quality of DoD member moves. If a moving company is suspended, it is prevented from accepting any moves for 30 days in DPS. We therefore recommend that USTRANSCOM reconsider its responses to these recommendations.

All of the recommendations, summaries of management’s comments to the recommendations, and our responses are located in the “Recommendations, Management Comments, and Our Response” sections of the report.

This report is the product of Proj. No. D2019-D000AT-0056.000