As its mission, the U.S. Transportation Command (USTRANSCOM), through the Defense Transportation System (DTS), is responsible for moving units, people, equipment, and households by ship, aircraft, rail, and truck for the Department of Defense during wartime and peacetime. USTRANSCOM recovers the vast majority of its costs through the Transportation Working Capital Fund (TWCF), in which customers pay for movement services through rates. When customers observe that the TWCF rates are higher than equivalent rates of other transportation providers, they may seek alternative options and thus shift movements outside the DTS, which could affect readiness. Peacetime movements contribute to USTRANSCOM's ability to be ready for its wartime mission, so shifting these movements outside the DTS can increase overall costs to the Department of Defense when other readiness activities must be funded. This report considers TWCF cost-recovery approaches that incentivize USTRANSCOM's customers to make transportation decisions that support USTRANSCOM's ability to meet wartime requirements. The analysis took place from December 2016 through August 2017 and reflects our teams understanding of USTRANSCOM processes at that time. This research was sponsored by USTRANSCOM's Program Analysis and Financial Management Directorate and conducted within the Acquisition and Technology Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.
Aligning Incentives in the Transportation Working Capital Fund: Cost Recovery While Retaining Readiness in Military Transportation
2019
89 pages
Report
No indication
English
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