The U. S. Transportation Command on Friday, Aug. 17, announced a contract award potentially worth $1.6 billion to Menlo Worldwide Government Services to manage Department of Defense freight movements in the continental United States with the goal of maximizing efficiencies and reducing cost.
The contract, which has a potential seven-year life cycle, has a three-year base period estimated as worth more than $525 million. There are also two one-year options periods valued at about $543 million and two one-year award term option periods worth about $567 million.
“DTCI is a team effort, in partnership with the Defense Logistics Agency and the military services, to increase the effectiveness and efficiency of DOD freight movements in the continental United States,” says Air Force Gen. Norton A. Schwartz, USTRANSCOM commander. “Menlo Worldwide Government Services will utilize best commercial practices to enable load consolidation and optimization, use of more efficient intermodal means of transportation and tailored scheduling to meet the customer requirements. These improvements will increase the precision and reliability of freight movements, leading to increased customer confidence, cost savings and increased efficiency in our CONUS shipping operations.”
DTCI, a USTRANSCOM Distribution Process Owner initiative, is a freight management program designed to improve the reliability, predictability and efficiency of DOD materiel moving within CONUS by reducing cycle times and improving predictability through the use of more dedicated truck schedules, cross docking operations, better mode selection and load optimization.
“In addition to the efficiencies and expected cost savings we’ll gain, this long-term partnership with Menlo Worldwide Government Services allows us to implement several commercial best practices into our transportation operations,” says Air Force Col. James Lovell, director of the DTCI Program Management Office.
DTCI will be rolled out in three phases, with the first installation coming on line within six months. Phase I includes Defense Logistics Agency CONUS Defense Distribution Centers and will be completed within 22 months. Phase II will start before the completion of Phase I and will incorporate activities within close proximity of the DDCs, selected aerial ports and DOD shippers; the government may require the coordinator to implement an additional 50 sites per year after successful Phase II implementation, but in no event will the number of sites under this contract exceed 260. Phase III, which will start before the completion of Phase II, will be to all other scheduled DOD activities and will be completed within 25 months.
“DLA and USTRANSCOM have worked closely on the Defense Transportation Coordination Initiative for several years,” says Army Lt. Gen. Robert Dail, DLA director. “This award represents a significant accomplishment in our collective efforts to streamline distribution processes and provide better and more cost-effective support to our nation’s warfighters. DLA looks forward to executing the first phase of the initiative.”
Benefits of the new program are expected to include increases in efficiencies and cost savings, as well as better visibility of freight movements. DOD says the enhanced visibility will allow for enhanced planning of other modes of transportation so it can better meet end customer (warfighter) expectations of delivery. “Our partnership with Menlo Worldwide Government Services will also help us gather the metrics that we need to drive continual process improvements in our distribution system,” Schwartz says.
Certain categories of freight will be excluded from DTCI, such as cash/collect on delivery shipments, sensitive and/or classified shipments, arms, ammunition and explosives, bulk and missile fuels, household goods and privately owned vehicles.
“This is a milestone win for Menlo and our partners,” says Robert L. Bianco Jr., president of Menlo Worldwide. “USTRANSCOM is to be commended for their foresight, vision and commitment to a best-in-class solution for improving distribution and logistics for our nation’s warfighters. This is a tremendous opportunity to leverage and apply our experience with some of the nation’s largest commercial businesses into a highly efficient logistics solution for the military. We look forward to a successful, long-term partnership with USTRANSCOM, DLA and the DOD that delivers new efficiencies and superior performance for our military’s domestic transportation operations.”
Menlo Worldwide is prime contractor for DTCI in partnership with the following principal subcontractors:
“I want to congratulate the Menlo team and their partners on an outstanding win,” says Douglas W. Stotlar, president and chief executive officer of Menlo’s parent company, Con-way Inc. “The entire Con-way organization stands behind you as we welcome USTRANSCOM, DLA and all DOD participants as our customers and embark on an exciting new chapter for our enterprise.”