Pentagon cancels multibillion dollar household goods moving contract
The Pentagon terminated its contract with HomeSafe alliance for cause, saying the company had demonstrated an “inability to fulfill their obligations.”
The Defense Department has cancelled its multibillion dollar Global Household Goods contract (GHC), bringing an abrupt end to a years-long effort that was intended to overhaul the management structure of the system that’s used to move service members’ belongings from one duty station to another, but whose implementation ultimately caused many more problems than it solved.
In a statement Wednesday night, the Pentagon said it terminated its up-to-$17.9 billion contract with HomeSafe Alliance for cause. Sean Parnell, DoD’s chief spokesman, said the decision was due to HomeSafe’s “demonstrated inability to fulfill their obligations and deliver high quality moves to service members.”
The cancellation appeared to mark the end of the overall GHC project, which DoD first began in 2018 with the goal of improving the moving process by consolidating its management under a single managed service provider. But the contract’s implementation was delayed multiple times — first by a long string of bid protests at the Government Accountability Office and the Court of Federal Claims — and then by technical integration challenges between HomeSafe and DoD systems. By the time DoD finally started conducting large-scale moves under GHC this year, HomeSafe, the contract’s eventual winner, struggled to meet the military’s demand because of a lack of moving company capacity within its base of subcontractors.
Defense Secretary Pete Hegseth first hinted the contract may be in jeopardy last month, when he intervened to correct “deficiencies” in GHC’s implementation, including by standing up a new joint task force to fix ongoing problems and acknowledging, for the first time, that the rates DoD was offering movers via HomeSafe under GHC “fail[ed] to reflect market rates.”
In a second memo, made public on Wednesday, Hegseth said he was giving that task force more immediate responsibilities and installing Maj. Gen. Lance Curtis to lead it. A month earlier, Curtis had also been placed in charge of U.S. Transportation Command’s Defense Personal Property Program (DP3) when DoD replaced its previous leader, Andy Dawson.
The Pentagon said DoD that for the short term, military moves will be handled entirely through the department’s “Tender for Service” contracts, the legacy system GHC was intended to replace. Curtis will also have the authority to make other near-term changes to improve the tender program, with TRANSCOM playing a supporting role in implementing those changes.
Over the longer term, Hegseth also ordered the task force to deliver recommendations for another attempt at household goods moving reform by September 5.
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