New program revamps DoD freight services.

With the December award of 73 contracts, the Military Traffic Management Command has turned over a new chapter in how it manages domestic transportation services. The Command has streamlined procedures for moving most domestic freight and fuels under an initiative known as Tailored Transportation Contracts and substantially revamped the way the military procures domestic freight services.

The award of these contracts is in keeping with a command focus to move away from low-cost, technically acceptable bids in favor of customer-oriented, performance-based, best-value contracts that reward superior service with additional business. Command officials believe this creates a win-win for the customer and the commercial industry. New distribution expectations place a premium on responsive, time definite, consistent levels of service--something that is difficult to achieve and enforce absent a solid contractual relationship. TTC contracts will convert the Guaranteed Traffic, or GT, Program, used by the command for more than 17 years, to Federal Acquisition Regulation, or FAR, performance-based contracts.

"This is a tremendous success story for MTMC," said Maj. Gen. Ann Dunwoody, MTMC Commander. "A lot of hard work, commitment and perseverance contributed to this success. It is truly reflective of the tremendous partnership we share with our industry partners and Military Services."

Contracts were awarded under two solicitations, one for Freight, all kinds and one for' Fuels. Start dates under the new contracts were set for Dec. 21 for fuel shipments and Jan. 13 for freight movements.

"The awards are all performance-based and either indefinite delivery, indefinite quantity contracts based on regionalized lanes or requirements contracts for specific lanes of traffic," said Col. Jan Frye, Principal Assistant Responsible for Contracting at MTMC. Additionally, a substantial number of prime awards went to small business, exceeding the original goals set.

Early on in the initiative, an MTMC Integrated Process Team composed of transportation, acquisition, legal and industry representatives was organized to streamline the contracting process transition. During the IPT sessions, MTMC's industry partners, as well as its many customers, were directly involved in developing the performance-based work statements for the new process. Recent legislative changes and the ICC Termination Act of 1995, which abolished the Interstate Commerce Commission, eliminated the exemption from the FAR for guaranteed traffic.

"Historically, the procurement of these long-term recurring freight transportation services has not been governed by the FAR due to an exemption stating that carriers can offer reduced rates for Government Bills of Lading service and that agencies can negotiate reduced rates for volume moves or for shipments on a recurring basis," said Frye.

According to Ed Brown, MTMC's Global Domestic Business Processes ,Branch chief who spearheaded the new program's development, the command will now procure all transportation services involving recurring shipments or long-term contracts under the FAR.

"This will include future procurements based upon, or similar to, the GT agreements that MTMC had utilized under FAR exempt procedures," said Brown.

Brown is quick to note that the FAR-based TTC process will be similar to the current GT process. He notes that many carriers are already familiar with FAR procedures highlighting "best value" features because similar processes have been incorporated in the GT process over the years.

"Our goal is to minimize the impact of the change on MTMC, its customers and industry by incorporating as much of the current GT process and procedures into the FAR-based process and instruments as possible," said Brian Rivera, a MTMC transportation management specialist who took over Brown's program manager role in December.

We greatly appreciate industry and the Military Services' support of this change, said Rivera.

The new Tailored Transportation Contracts are developed to ensure quality transportation services to its many DoD customers. Its most significant change is the empowerment of the Defense Logistics Agency and the Military Services to determine who is a quality carrier.

"Focus is now placed on the needs of the DoD shipper," said Rivera. "A pivotal shift is steering away from a 'low cost' environment to one of best value, selecting the best performer to move the freight."

To help ensure the success of this new program, MTMC has developed a regional structure for procuring transportation services in these contracts. For freight all kinds, there are eight origin regions to six destination regions included in the schedule. Shipping offices and depots will order from the resultant contracts. MTMC has developed an automated system designed to monitor minimum shipment requirements for each contractor and provide timely reporting of contractor performance and service exceptions.

"Once contractors' minimums are met, shippers are free to choose among the carriers within their region, based on overall performance," said Rivera. "Carriers will be privy to web-based metric reporting, detailing overall customer satisfaction for services rendered. This is an incentive for contractors to perform at a maximum level of performance during the minimum guarantee period and throughout the life of the contract."

In addition, MTMC hosted two TTC training sessions the week of Dec. 9 for shipper representatives and awarded contractors, to provide an overview of the program, explain its requirements and demonstrate its new web-based metrics system, which will track and monitor contractor performance under the program.

June Pagan

Operations Center 

HQ, MTMC