Case Overview, Department of Defense Personal Property Movement and Storage Program

 

           Members of this nation's armed services move frequently from one base to another, sometimes from one country to another. As individual soldiers, marines, and sailors move up in the ranks, acquire new skills and experiences, or their service's needs change, they may be asked to leave their current home and move hundreds or even thousands of miles away to a new assignment. When they move, someone has to take care of the logistics of shipping the individual or family's belongings to their new home. By one estimate moving consumes 400 hours of a family's time.
          This may seem to be the most mundane of matters and, yet, a policy debate emerged in the mid-1990's that subsequently pushed the Department of Defense to make a choice involving private sector companies interested in handling these logistics. Existing policy allowed private moving and storage companies to take care of the shipment of furniture and personal belongings. If a soldier and his or her family was living adjacent to the San Diego Navy Shipyard and the soldier received a transfer to the base at Newport News, Virginia, the family could hire a mover like Allied Van Lines to come in, box up their belongings, wrap their furniture, and put the kids' bikes into a moving van for the trip across country. The Navy would pay for this move. Given the number of armed forces personnel that must move each year, this is no small market for commercial van lines.
          A related, but somewhat different industry decided that it should try to gain some of this market. These are companies that want to take care of the entire logistics of moving, not just the shipment of personnel belongings. "Relocation managers" help a family with all the aspects of moving, most importantly, handling the selling of the home to be left and helping the family find a new home in the area it is moving to. This industry includes companies like Cendant, which owns the nationwide Century 21 real estate company. These firms formed the Military Mobility Coalition and its lobbyist approached the Department of Defense about a change to permit relocation managers to compete for military's business. The primary rationale it offered to the military was that relocation managers "focus on minimizing disruption to the family. Moving is not our primary function. It's a whole process, and move managers can improve the process."
          Not surprisingly, the moving and storage companies that had a monopoly over this business found reason to lobby against such a change. Their trade group, the Household Goods Forwarders Association of America (HHGFAA), told the Pentagon that "bundling is anti-competitive and unfair to small business." A spokesman added, "When you have one company do everything and [there's] no competition, quality is lost." For dispassionate observers, the central issue is what constitutes an appropriate level of competition. The Military Mobility Coalition succeeded in its lobbying to the degree to which that it convinced the Military Transportation Command (Transcom) to consider the issue and to evaluate three pilot projects. In June 2002, the Transcom working group-consisting of representatives from the military, the moving and storage industry, and relocation managers-recommended a permanent policy to allow relocation managers to compete for the military's business. Congress appropriated money for the Defense Department's new "Families First" program, which began on October 1, 2003.