Summary: In response to congressional requests, GAO reviewed the Military Traffic Management Command's (MTMC) modified interstate rate acquisition program to determine its impact on: (1) the moving industry; (2) the federal government; and (3) the quality of service to military members.
MTMC manages the movement of household goods for the Department of Defense's (DOD) military and civilian personnel when they are transferred to new duty locations. MTMC modified its program for obtaining commercial carriers' rates because: (1) the industry's economic and regulatory environment had changed significantly in the last several years; (2) it was necessary to protect against unreasonably high rates and undesirable terms and conditions; and (3) DOD regulations required MTMC to establish procedures for economic and efficient operation at competitive rates. Industry members' primary concerns were that MTMC changes would: (1) cause carrier revenues to decrease; (2) force some carriers out of business; (3) result in intense competition among carriers, with a reduction in cost and quality resulting in more loss and damage claims; (4) require additional carrier paperwork; and (5) result in increased costs to MTMC because it would have to bear the costs of printing and distributing the tariffs. GAO found that, since the program was implemented: (1) no carriers had gone out of business; (2) the majority of carriers had increased revenues; (3) the number of claims had decreased by 959 and the cost increased by $1.2 million; and (4) MTMC had no estimates for increased costs but did not need additional staff and expected to reduce overall costs with a new automated rate-filing system.
