Rate Filing - Round 2 Update

At this point all Department of Defense (DOD) Transportation Service Providers should be well aware that the Surface Deployment and Distribution Command (SDDC) postponed, indefinitely, the beginning of the second round of the 2014 rate filing.

Round one of the Defense Personal Property Program (DP3) rate filing closed on February 7. SDDC immediately began their analysis of the submitted rates, set their Rate Reasonableness ranges and began to run the "rates processor" on February 19. TSP rate rejections began to process and for some reason the process broke down and stopped.

The next day SDDC, the Defense Personal Property System (DPS) Program Office and the DPS contractor - CACI, were able to identify and rectify the problem. The rate processor was then able to finish and rate rejections were distributed to TSPs.

Problems with the rate rejections themselves were identified almost immediately. A number of international TSPs received rejections based on a rejection code (#2) which indicated they had made some type of Common Financial and Administrative Control (CFAC) violation in their rate submissions even though they were a single TSP.

Some Domestic TSPs received rejections based on a rejection code (#3) which indicated they were not 'approved' to file rates in that Market even though they were in actuality approved.

Numerous TSPs never received their rejections at all and a number of other rejection anomalies were also identified very quickly.

SDDC immediately recognized they had a major problem with the rate rejections and issued a message on Monday February 24, the day before Round 2 was to commence, postponing the opening of Round 2 indefinitely.

The DPS contractor has been working to find the root problem for the rate rejection anomalies but at this point has not been able to pinpoint the issue

As it currently stands SDDC is unsure when Round 2 will be rescheduled. They will first have to pinpoint the root problem, correct it, re-run the rate processor, and ensure that the problems have been fixed and that all TSPs have a proper set of rate rejections. Then they must provide TSPs with enough time to analyze the second set of rejections and make the necessary adjustments before they can open up DPS to accept the second round of rate filings.

Several sources within SDDC have indicated that Round 2 may be delayed as much as two weeks.

SDDC has also indicated that other than the anomalies that have been identified they feel the rate rejections issued for rates due solely to being outside of the Rate Reasonableness ranges were correct! They point out that they accepted approximately 80% of the rates and that TSPs should feel comfortable that any rejections that were due SOLELY to being outside of the Rate Reasonableness ranges are valid rejections.

SDDC has never fully disclosed how their Rate Reasonableness ranges are determined. Are they determined in advance of the rate filing? Is some mathematical evaluation done on the rates after they are filed? SDDC has always indicated the methodology for Rate Reasonableness determination is proprietary and would not be shared with the industry.

It appears that, at least during this rate filing, factors outside of just rates may play a role in the determination process. The shipment volumes, particularly in low volume channels, may have an impact on how SDDC determines the ranges. It seems that SDDC believes that it is not necessary to have hundreds of accepted rates in channels that cannot support a high number of TSPs so it appears they have narrowed the Rate Reasonableness bands in an attempt to reduce the number of accepted rates in Round 1.

SDDC built extra time into the process due to the implementation of the new functionality which enabled Domestic TSPs to file both Peak and Non-Peak rates for the 2014 Annual Cycle. Hopefully, with this time buffer built into the schedule, Round 2 will be completed quickly enough so as to not affect the ability for Personal Property Shipping Offices (PPSO) to begin awarding Peak Season shipments in a timely fashion.

IAM will continue to issue updates regarding the new rate filing timeline as the information becomes available. Be sure to follow the updates via all of the IAM Social media outlets - the IAM Social Cafe, Twitter and Facebook.

Source: IAM & SDDC

Key Points Coming out of the AMSA Military Summit

AMSA held their three-hour Military Summit on the last day of their recent convention in San Diego, California. DOD participants from both SDDC and the DPS Program Office participated.

Capt Aaron K. Stanley, SDDC's Director of Personal Property and Ms Jill Smith, Chief of the Business Process & Systems Division were the first panelist to address the large group of industry attendees. Capt Stanley, who assumed his position approximately five months ago, was the primary SDDC speaker. It was quite evident that Capt Stanley has been a quick study and seems to have a solid grasp on the DP3 issues that face both SDDC and the industry.

The key issues he addressed were:

25% Budget/Personnel reduction at SDDC - the SDDC Commander has mandated an across the board reduction of 25% in all departments which needs to be accomplished by the end of 2015. The Personal Property Directorate will begin to accomplish their reductions by consolidating the Regional Storage Management Offices (RSMO) and centralizing them at Scott AFB. This process will be completed by the end of 2014. This process may affect the warehouse inspection process in the future. They will then look at further downsizing through normal attrition and early retirement as well as possible internal reorganization of the Directorate.

• Open Season - Capt Stanley reviewed the 2013 Open Season and the lessons learned from it by SDDC. There is a chance that a very limited version of an Open Season will be held in 2014 which may focus on bringing in new participants focused on particular areas or regions with a more robust Open Season process envisioned for 2015. After that the current plan is to hold an Open Season every other year.
• Personal Property Forum (PPF) - The next PPF is tentatively scheduled for April 2 in the Scott AFB area. Capt Stanley is looking at possibly using a different format which may allow for some small group discussion and may entail a day and half format. He hopes to also have the military services participation. We hope to have an official message formally announcing the meeting shortly.
• Requalification/Right Sizing - Capt Stanley stated there would be NO industry wide TSP "requal" in 2014. His staff will be taking time to evaluate and review the concept of "right-sizing" and would possibly discuss their thoughts at the PPF but was in no hurry to "hustle" a review. He promised to work with industry and solicit their input to help plot a potential way ahead. 
• In the Short Term - Capt Stanley listed a number of initiatives he has on his short term radar.....enforcement of all Pam 55-4 requirements, revocation of TSPs that fail to file rates in two consecutive cycles, wants to look at what should be the consequences for TSPs that do not meet the Minimum Performance Score (MPS) multiple times in a rate filing cycle and enforcing CFAC for international TSP.  

He indicated that CFAC is an issue on his radar and that some previous policy guidance may have made for some gray area in interpreting CFAC. He plans to eliminate that gray area. 

Lt Col Prevett, the DPS Program Manager, then addressed the group and discussed what was surely the most controversial issue of the day. 

For a number of months the DPS Program Office has been discussing the possibility of a security issue associated with the Customer Satisfaction Survey (CSS) module of DPS and the encrypted links embedded in the emails sent to military members reminding them to complete their CSS.

It appears that the encrypted links are viewed as a security vulnerability by the officials that oversee the security of DOD systems and they asked that the links be removed. Military members would also be prohibited from using their DOD issued UserID and Passwords to directly access the CSS module in DPS in order to fill out their surveys.

It was not made clear what the specific security issue was that needed to be addressed but the DPS Program Office has been told that they would either comply with the directive or DPS would be shut down completely.

The one alternative method of collecting surveys that has been considered by the DPS Program Office is the use of a commercial product called "Survey Monkey."

The concept is to follow much of the same pattern currently in use to encourage members to fill out their CSS. Email reminders would still be sent to military transferees at the completion of their move but they would be embedded with a link that would take them to Survey Monkey rather than DPS. The member could complete the survey in Survey Monkey and then the DPS Program Office would gather the survey results and upload them into DPS for review by TSPs.

This concept evoked a great deal of discussion and consternation during the meeting. The idea of using this process is very preliminary and little testing has been done. It was very evident that the Program Office is under a great deal of pressure to come up with an alternative to the current process as it is deemed to be a security violation and they are being directed to removed it as soon as possible.

There was some open discussion between Capt Stanley and Lt Col Prevett which focused on whether or not there were any other appeals or options that could be taken that would allow for the status quo to remain in place. At the conclusion of the discussion it was unclear what, if any, options might still be available.

It appeared a meeting was to take place soon between SDDC, the DPS Program Office and the "Designated Approving Authority" (DAA) at U.S. Transportation Command where a final decision will be made regarding this security issue.

Copies of both Capt Stanley and Lt Col Prevett's briefing slide can be found on the IAM website at the following links:

• SDDC Slides
• DPS Program Office Slides 

Source: IAM, DPS Program Office & SDDC

Report: DOD Can Close Bases Without Congress

Feb 20, 2014

The tug of war between the Pentagon and Congress about base closures might have gotten a little more interesting.

According to a story published Wednesday in the online defense magazine Breaking Defense, largely forgotten laws give the Defense Department authority to close facilities without the Base Realignment and Closure process -- without DOD even getting permission from Congress.

Speaking at the Association of the U.S. Army's winter conference in Huntsville, Ala., House Armed Services Committee staffer Vickie Plunkett said Wednesday that buried in Title 10 -- the chapter of the US Code that governs the Defense Department -- is Section 2687, which, she said, "does give the services authority to do closures, and it only requires notification to Congress," Breaking Defense reported.

If the Pentagon and the White House were willing to take the political risk, they could shut down facilities and dare a gridlocked Congress to undo it.

"It's notification with time for Congress to act" before the closure is carried out, the magazine reported her saying. But, the veteran staffer went on -- emphasizing her opinions were her own, not committee policy -- "Congress is basically dysfunctional right now."

"The authorities only require notification. Take your chances," she said to an eruption of laughter, "because it's going to require us to get our act together to stop it."

The Army has recommended to the Office of the Secretary of Defense and Congress that a new round of BRAC is needed for 2017. More than 350 installations have been closed in five BRAC rounds in 1989, 1991, 1993, 1995 and 2005.

No one is suggesting that the Pentagon should try to slip something past Capitol Hill, Breaking Defense stressed. As a matter of constitutional law, any such actions need to be included in the annual budget, which has to be passed by Congress. As a matter of practical politics, the military informs Congress when it lets go even a handful of arsenal or depot employees, even people fired for misconduct, because it just takes one angry person to call their congressman to bring all sorts of hell down on the Army's head.

The Pentagon is in an even stronger position when it comes to the Army's arsenals, the government-owned manufacturing facilities for military equipment. Section 4532 of Title 10 -- portions of which predate the Civil War -- is the Arsenal Act, which Plunkett pointed out contains this language:

"The Secretary may abolish any United States arsenal that he considers unnecessary."

And that's not even the Secretary of Defense, because the Act was written before that job existed: It's the Secretary of the Army.

"The Secretary of the Army," Plunkett emphasized "has unilateral authority -- standing, statutory, Title 10 authority -- to close arsenals. Unilateral."

"Now the issue is," she said, "will the services ... take advantage of those statutes?"

Source: Stars & Stripes

New Japanese Advance Manifest Filing Rule - DOD Guidance

**Editors Note: The following memorandum was issued by SDDC in response to new requirements for shipments destined for importation into Japan. All TSPs need to review this guidance carefully as it becomes effective March 9, 2014.

Military Surface Deployment and Distribution Command
Customer Advisory
February 26, 2014
CA-14-02/26-0020

Subject: Japan 24 hour Advance Manifest Filing Rule (JP24 AFR)

Purpose: Provide guidance for cargo destined to Japanese Ports

Be Advised: Effective 9 March 2014, vessel operator or non-vessel operating common carrier (NVOCC) are required to electronically submit to Japan Customs information on all shipments discharging at Japan Ports no later than 24 hrs prior to vessel sail from Seaport of Embarkation (SPOE).

Guidance:
Effective immediately, all shippers must submit shipping instructions (SI) for cargo at least 72 hrs prior to scheduled vessel sail from SPOE. Failure to comply with guidance will cause cargo to be frustrated and possible missed Required Delivery Date (RDD) until receipt of SI.

1. At a minimum, the shipping instructions/Advanced Transportation Control and Movement Data (ATCMD) must include the following information:
a) Name, address, and POC information of Shipper (Consignor)
b) Name, address, and POC information of Receiver (Consignee)
c) In-the-clear cargo description (general description will not be accepted)
d) Quantity and type packages
e) Cargo gross weight
f) Container Number (for containers only)
g) Seal Number (for containers only)
h) IMDG and UN code when applicable
i) Harmonized System Code (HSC) (DOD shipments on GBL 0001-00)

2. Direct Book shippers are advised to annotate the data elements noted in #1 above in the Container Remarks Section of the SI or Carrier's Notes Section when completing the booking request on the individual carrier's website.

3. Shippers are instructed to note the HSC information in the Remarks Section in the Shipping Instructions or ATCMD data field with "DOD shipments on GBL 0001-00".

4. HSC information is applicable for all DOD shipments (general, HHG/POV, FMS, sensitive/ammo, etc.) discharging at Japan Ports.

5. Transportation Service Providers (TSP) are instructed to note "DOD shipments on GBL 0001-00" as the HSC information for all DOD shipments.

6. Defense Transportation Regulation (DTR) Part V (Customs) will reflect this information in the next update to Chapter 511.

HQ, SDDC: Patricia Green, Com'l 618-220-6849 (DSN: 770), patricia.a.green66.civ@mail.mil 

USTRANSCOM: Joseph Sottoriva, Com'l 618-220-4801 (DSN: 770) joseph.sottoriva@ustranscom.mil 

PACOM: MAJ Rahsul Freeman, PACOM J43, DSN 315-477-7281, rahsul.freeman@pacom.mil 

POC: 599th Transportation Brigade:Gregory Benjamin, DSN 315-456-5920, Gregory.a.benjamin.civ@mail.mil

Expiration: N/A.

DOD & Government Personal Property News & Notes

Fuel Surcharge for Period 2/15/14 to 3/14/14

From Daycos:

The price of fuel was $3.95 per gallon as reported on Monday, February 3, 2014 making the upcoming FSC rates for the period 2/15/14 through 3/14/14 as follows:

GBL Domestic HHG / International HHG - 12%

GSA Domestic HHG - $0.95

GSA International HHG and BAG - $0.95

February News "U" Can Use Newsletter Items

Regionalization:
Joint Personal Property Shipping Office Japan, Yokosuka (QENQ) will assume COMFLT ACTIVITIES Sasebo (QENF) on 1 April 2014. Shipments with a pickup and/or required delivery date on or after 1 April 2014 will be consigned to QENQ. JPPSO/PPSO should ensure shipments are consigned correctly before routing and awarding shipments in the Defense Personal Property System.

Storage of Portable Moving Storage Containers:
Employees of a receiving DOD-approved facility, who are storing PMSCs, must fulfill requirements outlined in the Defense Transportation Regulations Part IV, Appendices D and J. Portable containers, commercial or other similar owner-loaded storage containers, are NOT allowed in DOD-approved storage facilities without their contents being inspected and verified. A written record of the inspection and verification, signed by a company official, must be maintained for all owner-loaded containers. Inspection records must be made available for review by Regional Storage Management Office/Transportation Office personnel during facility inspections.

Reminder:
Don't forget........
Financial statement data must be submitted in DPS within 150 calendar days of a TSP's fiscal year end date.

New Limits on Professional Books, Papers, and Equipment (PBP&E)

The following is pulled from an official communication issued by the Department of Defense's "Per Diem, Travel and Transportation Allowance Committee" on February 3, 2014:

Synopsis: Redefines Professional Books, Papers, and Equipment (PBP&E) and limits the amount of PBP&E to a maximum net weight of 2,000 pounds with no authority to waive the limitation. The PBP&E weight allowance is in addition to the Permanent Change of Station (PCS) household goods (HHG) weight allowance for uniformed members and may be included as HHG for a civilian employee or transported separately as an 'administrative expense' incident to a PCS. Army proposed that a limitation be placed on this allowance as it is subject to abuse. The item contains a grandfather clause to allow anyone who transported more than 2,000 pounds PBP&E overseas prior to the change to return the same PBP&E amount to the CONUS. This change is effective for all Permanent Change of Station (PCS) orders issued on or after 1 May 2014.

This is a major change in the rules regarding "Pro Gear" for the Defense Personal Property Program (DP3). ALL industry participants should familiarize themselves with the new entitlement limits and be prepared to discuss these new limits, which become effective May 1, 2014, with the military members they will be servicing.

If the HHG or UB shipment weight is unobtainable by the normal methods, the weight is 7 lbs. per cubic foot for all shipments.

This new rule is documented in changes to the Joint Federal Travel Regulations (JFTR) and the Joint Travel Regulations (JTR).

These changes are scheduled to appear in JFTR change 327, and JTR change 581, dated 1 March 2014.

Source: IAM, SDDC & Daycos News - https://blog.daycos.com/

Obama to Announce $302 Billion Infrastructure Plan

2/26/2014

President Obama will announce Feb. 26 a four-year, $302 billion transportation infrastructure spending plan that would be financed in part by corporate tax reform.

Tax reform would pay for about $150 billion of the proposal, Bloomberg News reported, citing White House sources. The White House did not provide a source for the remaining funds.

Obama will announce the proposal in St. Paul, Minn.

The president has previously called for tax reform to pay for infrastructure. He proposed it Jan. 28 in the State of the Union address, saying he would push for a lower corporate tax rate while closing loopholes, thus broadening the tax's base.

American Trucking Associations said it wasn't sure whether tax reform would provide sufficient revenue. ATA has instead called for an increase to the federal fuel taxes.

But the Obama administration has pushed back, endorsing the tax reform instead.

Separately, Rep. David Camp (R-Mich.), chairman of the House Ways and Means Committee, will soon announce a major tax overhaul. Like the Obama proposal, it would seek to lower corporate taxes and close loopholes, putting some of the new revenue into the Highway Trust Fund.

The Highway Trust Fund may run out of money by August, Transportation Secretary Anthony Foxx has said.

Source: Transport Topics