Personal Property Forum Summary

On Wednesday April 2, the Surface Deployment and Distribution Command (SDDC) held its spring Personal Property Forum (PPF) at the Four Points Sheraton in Fairview Height, IL. The meeting was well attended with an estimated 300 attendees from the industry, the Military Claims Offices (MCO), the General Services Administration's (GSA) Transportation Audits Division, U.S. Navy, U.S. Transportation Command (USTC), the Defense Personal Property Systems (DPS) Program Offices and much of SDDC's staff.

A wide variety of topics were discussed during the all-day meeting. And, though few of the issues would be considered controversial in nature, excellent dialog took place between the industry and the wide variety of government entities present at the meeting.

The meeting opened with comments from the current SDDC Commander, Maj. Gen. Thomas Richardson. Maj. Gen. Richardson has been at the helm of SDDC for almost two years and is planning to retire from the U.S. Army in June. He will be replaced by Brig. Gen. Sue Davidson. Maj. Gen. Richardson talked about his vision of SDDC in the future. Over the past 10 years SDDC focus has been on moving cargo and personnel into and out of Iraq and Afghanistan. With the U.S. presence in that area of the world winding down, SDDC is looking at what its future focus will be. Maj. Gen. Richardson sees SDDC operating in four "silos" currently:

• International - this deals with the movement of traffic via surface and ocean mostly out of Central Asia
• Domestic - Freight All Kinds (FAK), Arms and Ammunitions movements and Specialized Cargo
• Personal Property
• Transportation Engineering Agency (TEA)

With "International" significantly being reduced by the end of the year as the U.S. reduces its footprint in Central Asia, SDDC has begun to refocus its attention on the other silos. They have realized that Personal Property is currently the area with the largest spend and the Command is beginning to fully understand the importance of the Personal Property business line to SDDC.

Maj. Gen. Richardson also discussed the current budget environment within DOD. SDDC has been mandated to reduce their budget/personnel by 25 percent over the next few years. Within the SDDC Personal Property Directorate this mandate has begun with the closing of the four Regional Storage Management Offices (RSMO). These offices will be centralized at the SDDC headquarters at Scott AFB and will see a substantial reduction in personnel. Obviously, with the centralization and personnel reductions, the RSMO will not maintain its current capabilities. The RSMO warehouse inspection responsibilities will most likely be shared with the Quality Assurance personnel at the local Personal Property Shipping Offices (PPSO) and Personal Property Processing Offices (PPPO); however the discussions regarding the transfer of these responsibilities are still ongoing with the military services.

Finally, Maj. Gen. Richardson touched on an initiative to bring Federal Acquisition Regulation (FAR) contracting to DOD transportation and move away from the Tender environment in which it currently operates. SDDC has already taken the first step in this proposed initiative. The Transportation Protective Services (TPS) area has already begun the move to FAR contracting. Maj. Gen. Richardson indicated that the next areas to consider moving to the FAR would be Specialized Cargo and then FAK. The consideration to move Personal Property to the FAR is well in the distance but is on SDDC's radar. SDDC will take the lessons learned from each step it takes in this direction and make a determination as to whether or not Personal Property can fit into this model.

After Maj. Gen. Richardson's opening comments, Capt. Aaron Stanley, the SDDC Director of Personal Property, then took the podium to discuss how the PPF would proceed and to give some high-level comments regarding the direction of the Defense Personal Property Program (DP3). His comments focused on a variety of topics, many of which were discussed in greater detail by his staff later in the meeting. A few of the issues he covered were:

• Open Season - SDDC will hold an Open Season which will be very limited in scope in 2014. The goal will be to bring greater capacity to some underserved areas. This will be focused on approval of Intrastate TSPs in those underserved areas. SDDC will identify those areas in advance of the Open Season. A larger, more comprehensive Open Season is envisioned for 2015.
• Customer Satisfaction Survey (CSS) Concern - The Captain indicated that SDDC had seen evidence of a few Transportation Service Providers (TSPs) withholding claims payments from military transferees until the member agreed to provide a favorable CSS. He warned that any abuses like this would result in immediate revocation action.
• Peak Season Projections - TSP can expect normal DOD rotations/volumes with possibly a short-lived spike as DOD starts to downsize and more retirement and separation moves take place.
• Shipment Refusals - The ability to refuse shipments will be in place immediately for shipments picking up between May 15 and July 31.
• Code 2 - SDDC has recommended that the military services use more containerized shipments for shipments less than 5000 lbs and destined for storage in order to help mitigate capacity concerns.

The rest of the day was segmented into discussion of issues led by leaders from a number of different groups both internal and external to SDDC Personal Property.

The first was Lt. Col. Gina Prevett, representing the DPS Program Office. Lt. Col. Prevett covered both the near-term and long-term plans for DPS development but the issue of greatest concern to industry attendees was DOD's plan to remove the encrypted link found in the email reminders that go to military transferees 7, 14 and 21 days after shipment delivery. This link takes transferees directly to the CSS and allows them to immediately complete the survey. It removes the need to log into DPS.

This link has been deemed a security risk and is scheduled to be removed from the email reminders in the May/June timeframe. After that point transferees will have to either log in directly to DPS to complete their survey or go to the DPS Helpdesk and provide oral feedback for survey completion. Currently 61 percent of the surveys are being completed via the encrypted link. There is great concern among all stakeholders that the removal of the link will have a huge negative effect on the CSS response rate which currently stands at an all time high in the mid-40 percent range.

There are plans to come up with a long-term solution for the issue that will be "user friendly" and "ensure data integrity and meets security requirements," but that solution is still under consideration.

Other groups presenting during the meeting were:

• SDDC Rates Team - Mr. John Becker, Rate Team Lead, covered a number of issues including the need for proper documentation for billing the Bunker Surcharge (BSC) on shipments to/from Alaska.
• General Services Administration (GSA) Transportation Audits Division - Mr. George Thomas, Disputes Resolution Branch Chief, gave a briefing that discussed the mission and structure of the organization, as well as, focused on a number of specific issues they had been dealing with recently. The issue that garnered the most attention was the issue of Notices of Overcharge (NOC) on shuttles. This has become a sensitive issue for many within industry and Mr. Thomas provided the proper set of steps that needed to be followed and the proper documentation needed to avoid seeing NOCs issued for shuttle services.
• SDDC Operations Team - Ms. Rosia Lindsey, Operations Team Lead, discussed a number of issues that were currently on her team's radar and a few recent program rule changes.
• SIT at Origin/Destination - Origin SIT requests must be submitted prior to pickup date. Destination SIT requests must be tied to the agent's first available delivery date.
• New Rules associated with Professional Books, Papers & Equipment (PBP&E) - Changed to 2000 pounds maximum and constructed weights based on 7 pounds per cubic foot.
• Weight tickets - Critical that these are provided to the origin Transportation Office in a timely fashion and TSPs should ensure that the weights going into DPS are the actual weights and not estimated weights.
• Military Claims Offices - Mr. Brett Coakley (Air Force Claims), Mr. Steve Kelly (Army Claims) and Ms. Virginia Eilmus (Navy Claims) discussed current issues the MCO have been dealing with recently. The critical discussion item was the recently completed rules associated with mold and mildew when identified as being in a shipment. The rules are in their final stages and will be included in both the Defense Transportation Regulations (DTR) and the Claims and Liability Business Rules in the very near future. These rules will help all stakeholders understand the rules and responsibilities when mold and/or mildew is found in a DOD HHG shipment.
• SDDC Quality Assurance Team - Mr. David Jones, Quality Assurance Team Lead, provided details on the 2014 Open Season. He also indicated that updates to the Qualifications Document (Pam 55-4) and Appendix B (Tender of Service) of the DTR were in the offing in 2014. Mr. Jones also indicated that SDDC was reviewing its rules concerning Bond Limits and in particular the "2.5 percent revenue rule". He indicated that SDDC would provide more information on the application of the 2.5 percent rule in the future.

** Remember: All International TSPs must update their Bond to the $150,000 level before May 15, 2014.

The meeting closed with Ms. Jill Smith providing a wrap-up of the meeting, which included the "do outs", "action items" and "takeaways" from the meeting. The following items were identified as needing follow up:

1. The DPS Program Office was to provide industry further details on the next few DPS releases, e.g. dates, specific Software Problem Reports (SPR), Software Charge Requests (SCR) and security updates included in those releases.
2. SDDC would complete a further review of Item 520, Delivery of SIT to a new rate area, in the International Tender.
3. SDDC will provide more specifics on the Alaska BSC issue and specifics on what is needed on the ocean bills of lading.
4. SDDC will look to conduct a webinar on Shuttles.
5. GSA Audits will provide details on when penalty interest starts and stops when a NOC is protested.
6. There was some question on how TSPs should be updating DPS in re-weigh situations. SDDC will update the industry on the proper procedures.
7. SDDC will update industry on all stakeholders' rights and responsibilities when alcohol is included in a shipment, primarily alcohol being imported back to the U.S. The focus is on custom broker fees.
8. A request was made to allow TSPs to once again change weight in DPS vs. having to request PPSOs to update weights in every instance.
9. SDDC will look at the issue of storage in approved SIT facilities when there is not one within 30/50 miles of Block 18 of the GBL.
10. A request was made by agents to have the SIT discount appear on the GBL and to have SDDC restrict TSP from "blacking our rates" on a GBL before providing it to an agent.
11. SDDC will once again communicate to PPSOs that they have the ability to approve third-party requests at destination even though a third party had not been approved for an item at origin.

The Personal Property Forum continues to be a valuable event. It is the only true forum still open to industry in which companies can communicate with their top customer in an open forum. There was some question as to whether or not this event would continue but the success and participation seen at this most recent PPF almost ensures that the event will continue long into the future.

The briefing slides from the PPF are on the IAM website.

Source: IAM & SDDC

Congress Again Roundly Rejects BRAC Proposal

Apr 02, 2014

The Defense Department argued again Wednesday for another round of base closures and lawmakers roundly rejected it with explanations why Congress was unwilling to put jobs in their home districts at risk in order to reduce Pentagon spending on excess base infrastructure.

"I'm disappointed the department again requested" in its budget that a Base Realignment and Closure Commission be set up in 2017, said Sen. Jeanne Shaheen, D-N.H., chairwoman of the Senate Armed Services subcommittee on Readiness.

At a Subcommittee hearing with four Pentagon officials, Sen. Kelly Ayotte, R-N.H., also said she was "very concerned about this proposal."

Both Shaheen and Ayotte urged the Defense Department to find other ways to cut costs, and also urged the military to spend more on the Portsmouth Naval Shipyard in New Hampshire.

Sen. Tim Kaine, D-Va., who has the Norfolk naval base in his state, tried to explain the political dilemma for lawmakers posed by BRAC.

"I can see why DoD likes the BRAC process," Kaine said. However, once the commission is set up, every community in the country with jobs at stake in a military base "has to lawyer up, has to lobbyist up," Kaine said.

In response, John Conger, the acting Deputy Undersecretary of Defense, said an independent BRAC making closure recommendations that would have to be accepted or rejected as a total package was the best way possible to address the problem.

If base closures were left to the normal legislative process, "you'll have more lawyering up," Conger said.

Congress has been fending off another BRAC round since the last one in 2005. In 2011, then-Defense Secretary Leon Panetta began making the case for another round but got nowhere against charges that the previous round in 2005 did not produce the cost savings that were predicted.

The 2005 BRAC commission originally estimated that it would cost the Pentagon $21 billion to follow its recommendations. However, a Government Accountability Office report said the real cost was about $35.1 billion.

Earlier this year, Defense Secretary Chuck Hagel said that he would not press for a BRAC round in 2015 or 2016, but he argued for one in 2017, which would guarantee making base closures an issue in the 2016 presidential and Congressional elections.

At the hearing, Conger rattled off statistics showing that the Defense Department currently "operates an enormous real estate portfolio encompassing over 562,000 buildings and structures on 523 bases, posts, camps, stations, yards and centers." The replacement cost of that real estate covering 27 million acres would be about $850 billion, Conger said.

"We maintain that the department has well documented the excess capacity" that now exists, Conger said. The excess capacity will only grow as the military reduces the number of troops following the wars in Iraq and Afghanistan, Conger said.

The most forceful case for another BRAC round was made by Katherine G. Hammack, the assistant Secretary of the Army, who has frequently clashed with Congress on the issue.

Without going into specifics, Hammack suggested that the Pentagon might have other legal methods of closing bases if Congress rejects another BRAC round.

"If Congress fails to authorize another round of BRAC, this defense drawdown is likely to repeat a very unfortunate historical pattern of hollowed-out forces dispersed across hollowed-out installations," Hammack said.

Source: Military.com