January 22, 2013

NDTA FALL MEETING Transportation Policy 101

November 2016

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Course Objectives

Familiarity with: • Transportation Policy (TP) Organization • USD(AT&L) Priorities • Better Buying Power • The TP Mission • Overarching Challenges in Transportation • The Focus Areas: Sealift, Airlift, Surface,

Personal Property, Metrics, Financials, Category Management, and Other Responsibilities

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Mission: Transportation Policy Interactions

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Chairman, JCS

Joint Staff J4 J3 J8

PACC (PAKAFG Coord Cell)

FEDERAL AGENCIES DoTransp DHS MARAD TSA FAA CBP ICE

USCG DoState DOE LOG. MGMT. NASA USAID NOAA NNSA FMC OMB GSA WHMO

ACADEMIA NDU (ICAF, NWC)

Log Tech UNC DAU AFIT

Under Secretary Acquisition Technology & Logistics Principal Deputy Under Secretary

-International Cooperation - ARA - Installations & Environment - PSA -Defense Procurement Acquisition Policy - DCMA

ASSOCIATIONS & INDUSTRY NDTA NDIA AMSA IAM

SHIP, AIR, RAIL, GROUND TRANSPORT UNIONS

Logistics & Materiel Readiness - Supply Chain Integration - Materiel Readiness -Maintenance Policy & Program - Program Support - Resource Management

TRANSPORTATION POLICY

Policy AFG PAK

Central Asia Pacific Europe Africa SOLIC

USTRANSCOM AMC JPO

J6 MSC J5/4

J8 SDDC J3 AQ

COCOMs

USCENTCOM

AFRICOM JFCOM PACOM EUCOM SOCOM

SOUTHCOM

Office of the Secretary of Defense OGC Comptroller CAPE Public Affairs Leg Affairs

Secretary of Defense Deputy Secretary of Defense

USMC I&L LPD

ARMY Army G4

AMC

NAVY Navy N4

N41-NAVSUP N42-Strat Mob

USAF A4 AQ

GOSCs ‛Councils of Colonels’

Integrated Product Teams

DLA

MPSA

USD(AT&L) Priorities

• Support current operations • Focus on programs that are affordable • Look for efficiencies and productivity gains • Maintain health of industrial base • Strengthen the workforce • Protect the future

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Better Buying Power

• Began when Secretary Carter was the USD(AT&L) • 1.0 – cost consciousness • 2.0 – best practices, providing better tools and professionalism • 3.0 – innovation • Overall, success in reducing program cost-growth from 10% to 4% for over

200 programs • BBP Focus Areas

– Achieve affordable programs – Control Costs throughout the Product Lifecycle – Incentivize productivity and innovation in industry and government – Eliminate unproductive processes and bureaucracy – Promote effective competition – Improve tradecraft in acquisition of services – Improve the professionalism of the total acquisition workforce

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Transportation Policy Mission

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Establish policies and provide guidance to DoD Components for the efficient and effective use of DoD and commercial transportation resources

Air, Sealift, and Surface Transport

Military Postal

Metrics Personal Property

Category Mgmt

Distribution Strategic Mobility

Transport Payment

Key Areas of Responsibility

S c o p e DoD Components

Federal Agencies

Industry Congress

Overarching Challenges in Transportation

• Balancing support for ongoing operations with policy making and business initiatives

• Improving Readiness using commercial partner networks and infrastructure

• Stabilizing decline of U.S. flag vessels and mariners

• Expanding use of Defense Transportation System

• Declining trucking capacity and driver shortages

• Increasing efficiencies and standardization through joint programs

• Implementing Government-wide category management initiatives

• Implementing enterprise-wide metrics to measure cost and performance

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SEALIFT

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RRF Composition: • 46 Total Vessels

Surge Fleet Composition: • 15 Total Vessels

Prepositioning Fleet Composition: • 23 Total Vessels

Government-Owned Lift

• MARAD’s Ready Reserve Force (RRF) and MSC’s Surge Fleet

– Maintained in Reduced Operating Status and expected to be fully operational within assigned 5-day readiness status

– Berthed in locations to minimize sailing time to strategic loadout ports

– Crewed by U.S. commercial mariners

• Prepositioning Fleet

– Administered by MSC; places military equipment and supplies aboard ships located in key ocean areas to ensure rapid availability

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Commercial Lift

VISA and MSP VISA • 96 Ships (includes MSP dry cargo vessels) • 289 Tugs, barges, Offshore Support Vessels (OSV)

MSP • 60 Vessels o 58 Dry Cargo Vessels; 2 Tank Vessels

• Voluntary Intermodal Sealift Agreement (VISA) – A partnership between the U.S. Government and the

maritime industry to provide DOD with “assured access” to commercial sealift and intermodal capacity

– VISA can be activated in three stages, with each stage providing additional capacity

– Authorized under MARAD’s authorities under the Defense Production Act of 1950

• Maritime Security Program (MSP)

– A fleet of active, commercially viable, militarily useful, privately-owned U.S.-flag vessels operating in international commerce

– MSP participants must be enrolled in an emergency response program (i.e. VISA)

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Cargo Preference • Cargo Preference Act of 1904

– Requires 100% military cargo on US-flag ships – Applies to cargo destined for DoD use, even if not owned by DoD – Codified in DoD Policy (DoD Directive 4500.09E and DoD Instruction 4500.57, and

DFARS 252.247-7023 and 247.5) – Waivers issued primarily due to a lack of US-flag ship availability

• Cargo Preference Act of 1954 – Requires 50% of government impelled cargo on US-flag ships – The 1954 Act is applicable to the DoD, but DFARS coverage is not required because

compliance with the 1904 Act historically has resulted in the DoD exceeding the 1954 Act's requirements

– Applies to certain Foreign Military Shipments (e.g. Foreign Assistance Act shipments), but in support of U.S. Merchant Marine, DoD policy requires 100% of applicable cargoes to be carried by US-flag vessels

• DoT’s Maritime Administration enforces compliance

Cargo Preference Ensures a Viable US Merchant Marine in Support of National Security

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AIRLIFT

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Civil Reserve Air Fleet Program

National Airlift Policy --- National Security Decision Directive 280, June 1987 • Ensure military/civil airlift resources can meet mobilization and deployment

requirements • Military and commercial resources are equally important and

interdependent in meeting wartime airlift requirements • Rely on commercial air carriers to provide capacity beyond that

of military organic fleet

• Protect national security interests within commercial air carrier industry DoD Implementing Policies

• Voluntary participation by carriers • Contractual arrangement based on annual contracts • Incentives in exchange for carrier airlift capabilities – opportunity to participate

in DoD and Federal agency airlift requirements

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CRAF Three (3) Stages Based on National Security Objectives and Operational Needs • Stage I - Minor Regional Crises and Humanitarian Assistance / Disaster Relief • Stage II - Major Theater War • Stage III - National Mobilization

Activation Process

Operational Insights

Current Airlift Capabilities • 23 Carriers • 453 Aircraft (416 international and 37 national domestic) • Must provide aircraft and crews within 24 or 48 hours of notification

Previous Activations • 1990 in support of Operations Desert Shield/Storm • 2003 in support of Operation Iraqi Freedom

Civil Reserve Air Fleet Program

Approve Implement Direct Request

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SURFACE

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Motor Carrier Installation Access

• Background – In response to shooting incidents and the threat of terrorism, DoD stopped accepting

the TWIC and initiated driver background checks • drivers facing lengthy wait times at gate • drivers unsure if they would be granted access as DoD installations use different criminal

disqualification criteria for entry

• Current Status and Way Forward – DoD recognizes the TWIC for ID proofing. Allows unescorted access with successful

background check and established need (bill of lading, invoice, etc.) – Fielding ePACS at all DoD installations to reduce visitor wait time

• requires initial ePACS enrollment and background check at each installation visitor center • allows TWIC scanning and automatic screening against Gov databases at subsequent visits • developing ePACS database sharing to eliminate need to enroll at each installation • developing similar software to scan REAL-ID drivers license

– OSD(Intelligence) is revising DoD installation access policy • standardize disqualification criteria across all Services • standardize process to adjudicate background discrepancies

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AA&E Interagency Coordination Group

• Overview – OSD(TP) chairs the AA&E ICG – Members include OSD(Intelligence), military

Services, CCMDs, DLA, DCMA, SDDC, DHS, TSA, DoT, DoE

– Work issues to enhance the safety and security of AA&E while in-transit

• Examples of issues/initiatives include: – Installation response to AA&E

incidents/accidents – Satellite tracking via SDDC/DTTS – GAO reports on AA&E carrier safety and

munitions accountability

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PERSONAL PROPERTY

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Personal Property Personal Property Consolidation and Standardization

o Consolidates 167 personal property shipping offices to ~10 by 2018 (128 consolidated) o Standardizes “back-office” business processes o Contributes to improving overall customer experience o Opportunity to leverage SDDC personal property management with standardization effort

USTRANSCOM initiative to review the Personal Property Program: The DoD’s end-to-end household goods value chain lacks the unity of effort and alignment required to consistently produce high quality relocation services for Service Members and their Families.

o ACCOUNTABILITY. No single agency or commander possesses the required responsibility, authority, and influence over resources to optimize end to end HHG synchronization to ensure SM and Families consistently receive high quality service

(note: as a result DP3 is driven by non-standard and complex cross functional policies, business rules, organizational relationships, and systems that do not optimize Service Member PCS outcomes)

o FAMILY RELOCATION. DP3 management is not integrated within holistic HR efforts to relocate Service Members and their Families

o ENTITLEMENTS. DoD policy is complicated and wide variances in entitlements exist between Services creating perceptions that parts of the Joint force are treated better, and complicating IT development and driving DPS program costs higher

o AUTOMATION. DPS is often difficult to use without explicit instructions and support from the help desk and/or installation transportation

TRANSPORTATION METRICS

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Supports Transportation Services Functional Domain Expert Responsibilities under BBP 2.0

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Transportation Metrics

• Management tool to enable performance and cost trend analysis and identify process improvements and policy update requirements

• Consists of 12 performance measures related to cost, reliability and responsiveness

o Is purchased transportation managed in an efficient and cost-effective manner? o Can customers depend on procured transportation to meet mission

requirements? o Are current acquisition methods and systems satisfying customer requirements?

• Phase I: CONUS freight shipments – completed

• Phase II: OCONUS freight – completed

• Phase III: Personal Property – underway

• Phase IV: TBD

TRANSPORTATION FINANCIAL INITIATIVES

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Third Party Payment System (TPPS) • TPPS is a third party electronic billing and payment system for payment of DoD

transportation bills • Deputy Secretary of Defense designated PowerTrack (now Syncada) as DoD system for

surface freight payments in 1999; HHG were added in 2004 • OSD(TP) and DFAS co-chair a TPPS Oversight Counsel that provides overall guidance and

direction for DoD use of the TPPS • DFAS is the Program Manager and Contracting Officer’s Representative and

USTRANSCOM AQ is the contracting office • During 2015, more than 12 million invoices, valued in excess of $4 billion were processed

through TPPS • New TPPS contract with U.S. Bank was effective on Jan 1, 2015; focus areas to ensure

success: – Current account closeout / carrying balance reconciliation – Developing new account hierarchy structure / account naming convention template – Data retention / storage / access resolution – Auditability

Improving TPPS support of today’s business and ensuring an affordable program for tomorrow’s growth

Transportation Financial Auditability TFA is a long-term process improvement initiative with the goal of standardizing

transportation business rules, processes, systems, and training enterprise-wide. Accomplishments

July 2014, published the Auditable Obligation Methodology for Transportation Account Code management

April 2015, endorsed transitioning to a single shipper system by business process area (Third Party Payment System Freight, Transportation Working Capital Fund Freight, and Personal Property)

March 2016 issued a Memorandum of Agreement for sharing of transportation Key Supporting Documents (KSDs) August 2016 issued a Policy Memorandum requiring evidence of receipt of transportation services

Current Initiatives Develop a solution for KSD central repository Develop an implementation plan for evidence of receipt of transportation services rendered Develop a BCA for a transportation target environment with the goal of standardizing transportation

business rules, processes, and systems

Way Forward Develop target environment implementation plans based on BCA and current initiatives

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Audit Show

Stoppers!

TFA Complements DoD Component auditability efforts

Economy Act • The Economy Act [Title 31, U.S.C., sections 1535 and 1536] provides authority for

federal agencies to order goods and services from other federal agencies (including other Military Departments and Defense Agencies) and to pay the actual costs of those goods and services

• The head of an agency or major organizational unit within an agency may place an order with a major organizational unit within the same agency or another agency for goods or services if: o Funds are available; o The head of the requesting agency or unit decides the order is in the best interest of the

United States (U.S.) Government; o The agency or unit to be asked to fill the order is able to provide the ordered goods or

services; and o The head of the agency decides that ordered goods or services cannot be provided as

conveniently or economically by a commercial enterprise.

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DoD provides DTS services under the Economy Act to:

GSA, DoS, DoE, NASA, DoJ, NOAA

and other Federal Agencies

OTHER RESPONSIBILITIES

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Other OSD TP Responsibilities

• Category Management • Operational Support / Executive Airlift • Non-tactical Vehicle Policy • Space Available Policy • Military Postal System Policy • Logistics Fellows Program • Developing and Maintaining Air Related

Interagency Agreements

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Transportation Policy Issuances

ODASD-TP has oversight responsibility for issuances covering: o transportation and traffic management o operational support airlift o transportation engineering o acquisition and use of non-tactical vehicles o military postal services o personal property program o USTRANSCOM charter and assignment of distribution process owner mission

Assigned workload (22 issuances): o 6 Directives o 11 Instructions o 1 Regulation o 3 Manuals o 1 Catalogue

Key Directives: o DoDD 4500.09E, “Transportation and Traffic Management” o DoDD 4510.11, “DoD Transportation Engineering” o DoDD 5158.04, “United States Transportation Command (USTRANSCOM)”

Key Instructions: o DoDI 4500.57, “Transportation and Traffic Management” o DoDI 4540.07, “Operation of the DoD Engineering for Trans and Deployability Program” o DoDI 5158.06, “Distribution Process Owner (DPO)”

http://www.acq.osd.mil/log/tp/

QUESTIONS

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