Menlo Worldwide Selected For $1.6 Billion USTRANSCOM DTCI

Defense Daily, August 22, 2007

The U. S. Transportation Command (USTRANSCOM) recently announced a contract award potentially worth $1.6 billion today to Con-Way Inc.'s [CNW] subsidiary Menlo Worldwide Government Services LLC of San Mateo, Calf., to manage Defense Department movements in the continental United States to maximizing efficiency and reduce cost.

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.

Menlo Worldwide is prime contractor for DTCI in partnership with the following principal subcontractors: Computer Sciences Corp. [CSC], ONE Networks Enterprises, Inc., and Olgoonik Logistics.

"I want to congratulate the Menlo team and their partners on an outstanding win," said Douglas Stotlar, Con-Way Inc. president and CEO, said in a statement. "The entire Con-way organization stands behind you as we welcome USTRANSCOM, [Defense Logistics Agency] DLA and all DoD participants as our customers and embark on an exciting new chapter for our enterprise."

"DTCI 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," Air Force Gen. Norton Schwartz, USTRANSCOM commander, said.

"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," Schwartz said. "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, a freight management program designed to improve the reliability, predictability and efficiency of DoD materiel moving within the United States 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," Air Force Col. James Lovell, director, DTCI Program Management Office, said. "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 five and a half months.

Phase I includes Defense Logistics Agency (DLA) continental U.S. 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. The number of sites under the contract will not 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," Army Lt. Gen. Robert Dail, DLA director, said. "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."

The 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 warfighter delivery expectations.

"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," Schwartz said.

Certain categories of freight will be excluded from the DTCI, such as, sensitive and/or classified shipments, arms, ammunition and explosives, bulk and missile fuels, cash/collect on delivery shipments household goods and privately owned vehicles.

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TICKER(S): Con-Way Inc.'s [CNW]: Computer Sciences Corp. [CSC]: