The Pentagon announced it has canceled a massive contract with HomeSafe Alliance (HSA) to ship the household goods of troops moving between duty stations that had become a source of steady criticism as families struggled to complete moves.
Pentagon spokesman Sean Parnell said Wednesday that the cancellation of the contract, worth around $7.2 billion, was "for cause due to HSA's demonstrated inability to fulfill their obligations and deliver high-quality moves to service members."
The move coincided with the appointment of Maj. Gen. Lance Curtis to lead the Permanent Change of Station (PCS) Joint Task Force that, according to Parnell, will have the power to "decisively act and make immediate improvements to the DoD Personal Property Program."
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The Defense Department manages roughly 400,000 household goods shipments each year -- 15% of all moves in the U.S. Oversight of these moves originally was managed by U.S. Transportation Command, but long-standing issues with the old system prompted the department to privatize the effort, leading to an award in 2021 of a new contract to HomeSafe Alliance, a joint venture between Houston-based KBR and a West Virginia company, Tier One Relocation.
The contract was troubled from the start, beginning with a series of bid protests that delayed its implementation and followed by complaints from moving companies that the rates they were to receive were too low to turn a profit and new contract rules appeared to require drivers to become company employees -- a restriction that would transform an industry that relies on owner-operators of trucks or loading teams who work for several companies.
Military families also said they were financially unable to simply do their own moves as they had in the past because reimbursement rates for personally procured moves were too low.
What is unclear is the impact this cancellation will have on the Pentagon budget. The intention of the contract was to have one moving management company coordinate the industry portion of the shipments, hold them accountable, and be transparent about the process with service members and families.
The contract also was designed so funds would be funnelled to the individual companies and the truck drivers, packers and loaders to encourage growth and meet capacity.
But moving representatives consistently have said this didn't happen, and movers simply didn't participate because of the lower reimbursement rates set by HSA and the uncertainty over employment.
In a statement provided to Military.com on Friday, HSA protested the contract cancellation.
"We disagree strongly with TRANSCOM's decision to terminate the Global Household Goods Contract and are reviewing legal options," the company said in a statement.
It added that, although the company will be ceasing operations, it will complete all moves currently in progress.
"I'm incredibly proud of the work our team has done, and I'm confident that we were turning the tide on the antiquated and broken military move system that we inherited," HomeSafe Alliance CEO Bobby Nicholson said in a statement.
HomeSafe started test moves in 2024 at select military installations, but by January 2025 had completed only 688, saying at the time it experienced "unexpected challenges" in the military move system.
While it vowed to handle a majority of the services' domestic moves this year, by April, just 25% of domestic moves had been assigned to HomeSafe and 1,600 were returned to the old system.
Last month, Defense Secretary Pete Hegseth made a series of moves, including ordering Transportation Command to increase oversight of HomeSafe Alliance's performance and improve the legacy system, known as Tender of Service.
As part of the order, Hegseth also created a PCS Task Force to review the process and make recommendations for improving, expanding, transferring or terminating the contract or responsibilities of HomeSafe or the legacy system.
The Pentagon, under Hegseth, has not been shy about canceling contracts that it has deemed either wasteful or unproductive -- often under the auspices of the so-called Department of Government Efficiency. However, while officials have been quick to tout claimed top-line dollar savings, neither Hegseth nor Parnell have offered any major details about what most of the contracts did.
In May, Military.com reported that some of these cancellations were for services like backing up data on a critical Navy server to the cloud or helping troops better use their tuition assistance.
Regarding the cancellation of the household goods contract, the American Trucking Associations, the trade group that represents the trucking industry -- including movers – hailed the decision.
"We have been sounding the alarm over this contract's failures to deliver for our nation's men and women in uniform, and we are grateful the Department of Defense has come to this same understanding," said Dan Hilton, a top director with the group, in a statement to Military.com on Friday.
With the HSA contract gone, though, the moving companies that the ATA represents now stand to benefit from the higher rates for moving military families that existed in the old system.
However, even before the new contract was awarded, military families had reported significant issues with the old process. In 2018, what was referred to as a "perfect storm" of troubles plagued the moving industry, including volume that exceeded capacity; shortages of drivers, packers and loaders as a result of low unemployment rates; and rules that limited the time truckers could be on the road.
More than 41,000 people signed a Change.org petition calling for improvements, which prompted the government to move toward privatization.
Megan Harless, an Army veteran and military spouse who has been a highly visible advocate for military families undergoing PCS moves since that time, said in a statement Friday on her LinkedIn page that she welcomed the news of the contract cancellation but said there is "much more work to be done still."
"We need to make sure that the right changes are made, and that our military community is not used as pawns again. We need to make sure our voices continue to be heard at [sic] the new PCS [Joint Task Force] [which] is putting together its plan," Harless wrote.
In the DoD announcement Wednesday, Hegseth permanently appointed Curtis to lead the Permanent Change of Station Joint Task Force.
That group, according to the Pentagon, will review the entire PCS process to "identify additional actions to better the moving experience" and provide direction for reforms by September, according to the announcement.
In addition to making changes to the way military moves are conducted, the administration said that it is looking to reduce the burden of permanent changes of station by reducing their numbers entirely.
Hegseth announced last month that he directed the military services to cut the amount of money they spend on PCS moves for troops in half by 2030.
While this change was framed as a way to reduce costs and provide stability for families, department officials did not offer clear definitions on what moves are discretionary and what guardrails will be put in place to keep the cuts from affecting families or careers.
Related: Army Pulls Back Household Goods Shipments as Privatized Moving Contract Leads to Widespread Issues
