eGov/Mil Newsletter: May 5, 2017
In this Issue:
- SDDC Open Season Update
- Financial Reports Due to SDDC Soon
- U.S. House sends budget deal to Senate
- Military moves 2017: System concerns, mover shortages make early scheduling critical
- Senate Clears $1 Trillion Omnibus for President’s Signature
- Annual Meeting Registration Open for All Members
- Cyber Risk and Liability Webinar
- Put Your Story in The Portal
The Surface Deployment and Distribution Command (SDDC) recently held their first Open Season in four years and only the second one since 2006. An Open Season is the only opportunity for interested parties to apply to participate as a direct contractor in the U.S. Department of Defense's personal property/household goods program. SDDC is the program manager for DOD's Defense Personal Property Program (DP3).
SDDC has been communicating with IAM since fall 2016 regarding their proposed timeline for holding the Open Season. As late as late February of this year their plan was to begin the Open Season application process this summer and culminate the process with newly approved applicants filing rates in early 2018 for the 2018 DP3 Annual Cycle, which would begin May 15, 2018. SDDC always indicated that the industry would receive official notification of the process and the criteria to be used to evaluate applicants via the Federal Register. The Federal Register is the tool normally used by the Federal Government to communicate changes/updates regarding their programs.
In late March, with almost no notice, SDDC decided to expedite the Open Season process. They issued an Open Season Announcement via Federal Business Opportunities (FEDBIZOPPS) portal. This expedited process only allowed potential applicants a very narrow window to apply for the Open Season. The window was only open from March 29 through April 25. An announcement in the Federal Register followed but this announcement did not allow for the promised comment period regarding the criteria SDDC would use to evaluate applicants.
IAM had several significant concerns with the Open Season criteria.
- The criteria severely limited the applicant pool by only allowing applications from entities with warehouses in a limited number of areas deemed in need of increased capacity.
- Freight Forwarders were not allowed to apply for any of the domestic locations and Hawaii was the only point in the international program that would be considered. Even then, a Freight Forwarder would still be required to have an existing warehouse in order to apply.
- Applicants would be required to declare Common Financial and Administrative Control (CFAC) if they had any affiliation with a current DOD Transportation Service Provider. And in complete opposition to current DP3 rules in the Domestic Market, they would not be able to file rates in the same channels with any TSP with which they declared CFAC.
- New TSPs would not be allowed full participation in the program. A three-year phase in period was required before they could expand their scope beyond their initial limits.
- How some of these rules governing new applicants will affect current contractors remains unanswered and a serious concern.
IAM raised concerns via a formal communication with the SDDC Commander well before the close of the application period. The Commander's response, received only a few days before the close of the Open Season window, lacked detailed responses to the questions we raised and indicated that SDDC intended to move forward as planned. IAM also conducted some congressional outreach to garner support for our position. IAM staff meet with congressional committee staff for the House Armed Services Committee (HASC) and a number of key Congressional offices. All those entities communicated our concerns to SDDC but still SDDC chose to continue forward with their plans.
Now that the window for the Open Season has closed, IAM has learned that SDDC received approximately 70 applications. SDDC staff has indicated that it appears that 20-30 of the applications seem to meet the criteria that was set forth in the announcement. SDDC wants to try to utilize this new capacity during the 2017 Peak Season, so it appears the plan is to hold a DP3 rate filing for any of the newly accepted applicants in the mid-June timeframe. SDDC plans to use those new entities in emergency situations only. It seems an emergency situation will occur when all current TSPs have Blacked out of a channel in which a new applicant has filed rates. SDDC would then try to reach out to the new TSPs in that channel to try and tap into their new capacity. New applicants will be brought into the regular Traffic Distribution Lists when the new TDLs are formed on August 1.
Many questions remain regarding this process of bringing new TSPs into the program after the start of the Annual Cycle. SDDC believes that they can tap into this new capacity to help mitigate some of the capacity constrainsts they feel every summer. How successful this Open Season process will be remains in question but, maybe even more important, determining the long-term effects these changes will have on the future of DP3 is the critical piece of this puzzle.
The Surface Deployment and Distribution Command (SDDC) requires that Transportation Service Providers (TSP) must provide copies of their financial statements to SDDC within 150 calendar days from the close of their fiscal year. For most TSPs their fiscal year coincides with the calendar year, so the last day to submit financial reports is quickly approaching.
TSPs should review the new Regulation 55-4 (TSP Qualification Document), which was issued May 18, 2016. The document indicates that SDDC now requires that "a copy of the balance sheet and statement of cash flows" must be provided with the financial statements. This is a new requirement.
It is unclear at this point if this new requirement will only be necessary upon request from SDDC or if the company’s balance sheet and statement of cash flow must be supplied in all cases. IAM has reached out to SDDC for guidance but as of today no response has been received. TSP should be prepared to supply these two additional documents as part of their financial reporting to SDDC.
U.S. House sends budget deal to Senate
The U.S. House overwhelmingly approved spending legislation through September that is expected to sail though the Senate to the president’s desk. President Donald Trump is expected to sign it before government funding runs out Friday night.
Military moves 2017: System concerns, mover shortages make early scheduling critical
It’s more important than ever to schedule your permanent change-of-station move as soon as possible, experts say, as access issues with online moving tools, an increase in short-notice relocations and a shortage of movers could wreck some service member’s plans.
Senate Clears $1 Trillion Omnibus for President’s Signature
Months later than many appropriators would have liked, the voting has wrapped up its work to fund the government through the end of September. Senators voted 79-18 to send the $1.07 trillion omnibus bill, which featured the remaining 11 of the 12 regular spending measures as well as a variety of emergency spending measures, on to President Donald Trump.
Annual Meeting Registration Open for All Members
Registration for IAM’s Annual Meeting and Expo is open for all members. Members can now register themselves, purchase sponsorships, and reserve booth in the expo hall. This year’s Meeting is set to be the biggest yet, so sign up now to ensure your spot.
Cyber Risk and Liability Webinar
Evolving Risk in the Transportation and Relocation Industry
While cyber breaches at transportation service providers may not have received the publicity that other high profile breaches have, they are occurring and with increasing regularity. If you would like to learn more about the dynamic and interconnected risk landscape facing our industry, please join us on May 25, 2017, at 11:00am EDT (GMT -4). Cyber risk and liability experts will provide an overview of the types of events and oversights that can lead to the loss or theft of confidential data and discuss common causes of data theft and the associated liability risks that may result. Save the date--registration details will be available soon.
Put Your Story in The Portal
In the July/August issue of The Portal, we will celebrate Canada as they mark their 150th anniversary in 2017. IAM members in Canada are strongly encouraged to introduce themselves in the magazine. We'll also take a look at the Canadian Association of Movers and its activities. If you are an IAM member in Canada, you're invited to tell us about your company's history and the services you offer. What should Portal readers know about the unique opportunities and challenges related to doing business in Canada?