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A Cost Reduction Alternative for the Department of Defense Global Privately Owned Vehicle Contract

Abstract : Military members and Department of Defense (DOD) civilians who are assigned to overseas locations are entitled to store a Privately Owned Vehicle (POV) at government expense for the length of that assignment. Frequently, these vehicles are stored for three years or longer at a significant cost to the government. Additionally, the contract storage costs over a three or four year overseas assignment usually exceed the Fair Market Value of the POV. This Applied Systems Design Project will develop an alternative process, or a POV Incentive Option, that will give DOD the option to offer a member Fair Market Value for a particular POV in lieu of the member receiving their financial storage entitlement (at present, up to $310 per month, which equates to a maximum of $11,160 in POV storage costs over a three-year overseas assignment). The significant entitlement expense, and the growth in storage costs, gives this project a compelling business case at the same time DOD is aggressively seeking billions of dollars in efficiencies.