cy, programs and logistics. “It has
changed the way we talked about
what we do, our relationships with
our customers, our partners, our
“We have to measure our success
through the eyes of the customer,
and also how we conduct the business,” he added. “When you’re
measuring the process from end to
end what you want to do is first is
ask the customer at the other end,
‘What is your measure of success?’”
Transcom aggressively embarked
on its new role by conducting more
than 300 interviews with its national partners and its customers — the
warfighters — about how they view
DPO’s success, Harnitchek told
Seapower. Too often, the legacy performance and effectiveness measures were focused internally instead
of on the customer, he said.
“They want us to be more efficient. They would like us to be precise, be reliable, provide them with asset visibility and they want value for
those three things,” Harnitchek said.
Customers also want to know where a shipment is
at any given time until it is received.
“Initially — as with anything when you start to
measure — you generate a lot more questions than you
generate answers. We are finding significant areas for
improvement and we are fixing them now,” he said.
While DTCI is not the “last” word on Transcom’s
transformation, it is an “outward manifestation” of
how the command is changing the way it measures its
business and its relationship with its customers and
the private industry.
“We are buying, on behalf of our customers, an outcome, as opposed to a conveyance,” Harnitchek said.
“When you are talking about buying performance you
have fundamentally changed the relationship with
industry. You are moving from managing supplies to
But from the moment the request for proposals hit
the street, DTCI has been fraught with controversy. It
is easily one of the largest contracts ever to be awarded to the transportation and shipping industry, so a lot
of money is at stake and several companies already are
worried that they could be cut out of the action.
After all, the contract winner would carry enormous
clout by managing a $1.5 billion, seven-year contract
that eventually could expand to encompass the DoD’s
global transportation system.
U.S. TRANSPORTATION COMMAND
A forklift operator moves supplies at the New Cumberland facility of the Defense
Distribution Depot Susquehanna, Pa. One of the major aspects of the U.S.
Transportation Command’s Defense Transportation Coordination Initiative is to
coordinate and streamline military shipping and distribution operations, which currently have no centralized planning, coordination or control.
On another level, the winner would decide which
trucking companies and other carriers get a share of
the $900 million the Defense Department spends
annually on shipping freight.
The contract, by its nature, does not sit well with
some key players in the transport market, the so-called
transportation intermediaries. These motor carriers
and truck brokers, who have trucks under contract
and match cargo with available capacity, view DTCI as
a threat to their livelihood.
Fearful of being shut out, they argue that the winning team would establish a monopoly by either using
its own assets or those of a select few. They believe large
companies could sweep the high-stakes contract, with
some small businesses — ensured a piece due to government contracting regulations — protected at the
lower end. No such assurances, the transportation
intermediaries claim, exist for companies in the middle.
Transcom notes that the Government Accountability
Office (GAO), the watchdog arm of Congress, ruled in
favor of the command’s approach. In fact, the GAO ruling
“validates” the effort, argued Col. Jim Lovell, the DTCI
His office has a quality assurance surveillance plan
that lays the foundation for evaluating contractor performance, as well as an ironclad process in place to
monitor contractor performance once the project is
awarded, he said.
Payments to the company hired to run the DTCI are
“determined on how he meets and exceeds the various