Sam Spade's San Francisco

Awaiting me in my inbox this morning was some some very interesting news.

The Department of Defense has just awarded an astounding $1.6 billion contract to a San Mateo company to manage freight movements for the U. S. Army, the Air Force, the Navy and the Marine Corps. This is a very major contract with national importance.

The contract will not include the U.S. Coast Guard Guard as they are a branch of the Dept. of Homeland Security, and not part of the DOD.

Here is the official news release issued by the U.S. Transportation Command:

U.S. Transportation Command News Release
RELEASE NUMBER: 070817-1
by Lt. Col. Cliff Mirabella, USTRANSCOM Public Affairs

The U. S. Transportation Command announced a contract award potentially worth $1.6 billion today to Menlo Worldwide Government Services, LLC of San Mateo, Calfornia, to manage Department of Defense freight movements in the continental United States with the goal of maximizing efficiencies and reducing cost.

"DTCI ( Defense Transportation Coordination Initiative ) 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," said Air Force Gen. Norton A. Schwartz, commander, USTRANSCOM. "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 is a USTRANSCOM Distribution Process Owner initiative. DTCI 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," said Air Force Col. James Lovell, director, DTCI Program Management Office, "this long-term partnership with Menlo Worldwide Government Services allows us to implement several commercial best practices into our transportation operations."

DTCI will be rolled out in three phases with the first installation coming on line within 5 1/2 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. 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. 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," said Army Lt. Gen. Robert Dail, DLA director.

Benefits of the new program are expected to include increases in efficiencies and cost savings, as well as better visibility of freight movements. The enhanced visibility will allow for enhanced planning of other modes of transportation so DOD 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," said Schwartz.

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.

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 approximately $543 million and two one-year award term option periods worth approximately $567 million.

For more information about this story, try these resources:

USTRANSCOM DTCI (U.S. Transportation Command, Defense Transportation Coordination Initiative)

Q and A document (prepared by USTRANSCOM in .pdf format)

Link to Menlo Worldwide in San Mateo

Contact Menlo Worlwide

Contact the DTCI Public Affairs Officer, Lt. Col. Cliff Mirabella by phone at