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Bus and Motor Coach Library

Marketing Your Services to the Military – Part 2
A Historical Overview

Author - Brian J. Niddery (2005)

The roots of the Passenger Surface Inspection Program (PSIP) can be traced back directly to the 1985 Gander air disaster in Newfoundland, Canada where all 256 passengers and crew died, of which 248 were soldiers, who were returning from the Middle East. Contracted by the US military, Arrow Air, an American-based charter airline crashed while departing Gander airport, making it the worst air disaster in Canada's history.  Not only did this forever change the processes by which the Department of Defense (DoD) would procure air services from the commercial sector, it brought attention to the safety and security of military personnel being transported by passenger motor carriers.

Initially, the then Military Traffic Management Command, now SDDC sought the assistance of the then Federal Highway Administration (FHWA), Office of Motor Carriers, now the Federal Motor Carrier Safety Administration to provide the level of oversight and control desired by SDDC on their approved passenger motor carriers to ensure safe, efficient, secure and reliable service.  FHWA's Office of Motor Carriers faced with an ever increasing number of motor carriers (190,000 in 1990 now almost 700,000) entering the transportation system due to deregulation and their limited resources were faced with their own problems and thus unable to respond to SDDC needs.  SDDC (formally MTMC) shoulders two critically important responsibilities regarding the movement of military personnel.  One of course is their safety, and the other because virtually all of SDDC's customer's transportation requirements are mission sensitive, is the reliability of the transportation service.  Therefore, any delays to the normal flow of activities can be costly and disruptive to the mission. 

SDDC, understanding the importance of these two issues sought the inspection services of a qualified safety and security firm to provide the assurance they sought for their customers and in 1990 through the competitive bidding process awarded the initial "Bus Inspection Program" to Consolidated Safety Services, Inc (CSS).  This sparked the beginning of a relationship between SDDC and CSS that has lasted now for over 15 years.  SDDC, professionals in their own right in the world of logistics and CSS the safety/security specialist have worked collectively toward the common goal of ensuring safe, efficient, secure, and reliable ground passenger motor carrier transportation services for military personnel nationwide.  And, in doing so have developed one of the most successful and internationally recognized ground transportation safety inspection programs in our nation's history. 

The inspection program developed and implemented by CSS, although keeping pace with changing regulations, has remained essentially unchanged from its original design.  The basic functional components of the program include two very distinctive types of inspections.  One is the On-site Corporate inspection, historically referred to as the FTE inspection, FTE meaning Facilities, Terminals, and Equipment, which is compatible with the DOT compliance review.  Compatible in the sense that all evaluation Factors described in the Federal Motor Carrier Safety Regulations (FMCSR) under Part 385, on-road performance elements (vehicle out-of-service and accident rates) and critical/acute regulatory violations are included in the inspection process and subsequent safety performance rating assigned, which is discussed later.  The other is what is generally referred to as the Standard of Service and Safety or SSS inspection.  These inspections are no-notice inspection compatible with what most people know as the "roadside" inspection, which will also be discussed in detail later.

With the FTE Corporate inspection there is however, one unique difference associated with the on-site inspection conducted by CSS compared to that of DOT.  To understand the difference requires some explanation.  The Federal Motor Carrier Safety Regulations (FMCSR) provides the motor carrier the details of what is required under the regulations.  However, they are silent on just how the motor carrier should ensure the regulations are complied with.  This is left to the motor carrier to determine through their "Safety Management Controls".  Under the FMCSR, Part 385 Safety Fitness Procedures, Safety Management Controls are defined as the systems, policies, programs, practices, and procedures used by the motor carrier to meet their regulatory responsibilities and to ensure the safe movement of passengers and product through the transportation system.  Because each motor carrier, although governed by the same regulations are unique unto themselves, just how they meet their regulatory obligations is dependent upon a number of variables to include organizational structure, equipment used, transportation services provided, and geographical location just to mention a few. 

So it is left up to the motor carrier to develop and implement their own controls and oversight procedures to ensure safe operations.  If you turn back to the regulations, specifically Section 385.5, you will find that for a motor carrier to meet the DOT safety fitness standard, the motor carrier must demonstrate it has adequate safety management controls that function effectively to ensure compliance and safe operations.  Under the PSIP program motor carriers are subject to routine in-service (FTE) on-site corporate inspections generally conducted within a two-year period.  Although the carrier's on-road performance is monitored for any irregularities, CSS knows it could be two years before the next on-site inspection is conducted.  Therefore, CSS places a lot of focus and importance on the carrier's knowledge of the requirements and their safety management controls.   For example, when reviewing the content of the carrier's driver qualification files, they will validate that the carrier has the proper documentation to denote the driver's annual driving review has been conducted.  However, they will also research and evaluate all the procedures used by the motor carrier when conducting the annual review of a driver's driving record to ensure the documentation presented is supported by sound management control and oversight. 

CSS approaches each inspection with the philosophy that a violation(s) is merely a symptom of a more deeply rooted problem generally tied to the carrier's lack of knowledge, poor execution, limited or inadequate management controls and/or oversight, or the lack of having established the proper levels of accountability.  Therefore, simply pointing out the violations is like treating the symptom.  Unless the root of the problem is identified and corrected, the symptom or violation(s) will continue to occur. 

Initially when the program was started the contract restricted CSS from providing any guidance and/or assistance to the motor carriers inspected under the program.  Once the inspections began, CSS quickly realized that many of the carriers, although wanting to do a good job, failed to fully understand the requirements and therefore could not establish effective safety management controls.  CSS knew that if they could help improve the level of safety and compliance within the carrier's operations it would also benefit its client SDDC.  DoD officials after being debriefed on the issues clearly understood the benefits of allowing CSS to provide guidance and assistance and removed the restrictions.  So what was initially an adversarial relationship that naturally occurs between the "inspector" and the "inspectee" was replaced with essentially a "win - win" situation benefiting all concerned.  So with each inspection conducted, the motor carrier receives, in addition to the assistance provided by CSS while on site, a detailed inspection report that also includes clarifications regarding any detected violations and recommendations on how to correct the operational deficiencies found.   This information provided back to the carrier also supports one of the primary objectives of SDDC and CSS, which is to continually reduce and/or minimize the safety risk to military personnel.  When operational deficiencies and/or violations have been brought to the carrier's attention, it is expected to take effective corrective action to eliminate a reoccurrence. CSS maintains a running inspection history on all the carriers that have entered and/or left the program.  With each inspection the carrier's inspection history is provided to the CSS Transportation Safety/Security Specialist and reviewed prior to the next inspection.  As part of the inspection, the CSS specialist will pay close attention to previous violations to ensure the carrier has acted properly to eliminate previously noted problems.  With this process continual improvement is expected.

As mentioned previously SSS inspection is the second basic type of inspection included in the program.  This No-Notice inspection generally performed at the point of origin is conducted in accordance with the North American Inspection Standard with the serviceability of the driver and vehicle determined by the Commercial Vehicle Safety Alliance's Uniform Out-of-Service Criteria.  The FTE Corporate inspection can determine if the carrier has the capability to provide safe, efficient and reliable service, the SSS inspection ensures the level of service expected is in fact provided. 

Also important to SDDC is the comfort of the troops.  One of the elements of these and the vehicle inspections conducted during the FTE inspection is the interior condition of the vehicle, be it a van, limo, taxi, bus, or motorcoach.  SDDC wants to ensure that troops are afforded all the creature comforts, as any passenger would be.  The cleanliness, and functionally of the passenger comfort features are therefore included as part of the vehicle inspection.

Another unique feature of the PSIP program is the rating system.  After the Gander air disaster, DoD introduced a numerical scoring system for the commercial airlines under contract to DoD.  The scoring system contained five levels where a rating of 1 denoted superior service and five (5) unacceptable or unsatisfactory services.  DoD also wanted a similar numerical scoring or rating system for the PSIP program. 

CSS, understanding the dynamics of the transportation industry and the ever-changing regulations knew that they had to develop a flexible system.  They would also have to ensure that it would be compatible with FMCSA's satisfactory, conditional and unsatisfactory safety ratings.  Another important element was to find a way to incorporate some method by which a motor carrier's safety management controls or lack there of would be included.  All of which had to ensure no inspector bias or subjectivity was entered into the rating process.  The rating system CSS introduced and which has been in use for over 14 years is fully automated.  Using FMCSA's basic rating system as a foundation, CSS developed three distinctive levels denoting "satisfactory" or acceptable performance.  A rating of 1 denotes a superior ranking, 2, excellent, 3 adequate.  A CSS Safety Performance Rating of 4 is equal to the FMCSA conditional rating and 5, unsatisfactory.   What this did is allow DoD to incorporate the "Best Value" concept into its selection process.  A carrier's vehicle out-of-service rate and accident rate are also ranked with 5 distinctive levels. 

Each individual rating factor is scored independently as are the carrier's vehicle and accident rates.  These individual scores are then combined to provide an overall Safety Performance Rating.  Under the PSIP program a final rating of 1, 2 and/or 3 are acceptable.  To get a better understanding of just how important these distinctions are to DoD you can look at how FMCSA currently calculates a motor carrier's accident rate. 

Under FMCSA's rating system motor carriers who operate outside of the 100 air mile radius who have an accident rate of 1.5 accidents per million miles traveled or less would receive a "satisfactory" rating. 

However, if that rate is calculated at more than 1.5 or for example 1.6 the rating is unsatisfactory which does not provide much separation or distinction between safe and/or unsafe operations.

Over the years SDDC and CSS have worked collectively to improve the program.  While a number of improvements have been introduced, there are several that stand out as major milestones of the program.  One such improvement was the introduction of the on-site Pre-Qualification Inspection.  This inspection, similar in all respects to the FTE Corporate inspection was introduced into the program as the final stage in the approval process in November 1992 and the initial impact was significant and the benefits long term.  As mentioned earlier, in 1990, DoD had about 790 approved passenger motor carriers with the ranks continuing to swell as the motor carrier population continued to grow.  DoD's initial approval process was primarily administrative requiring the carrier to demonstrate at least 12 months of continued operating experience prior to their application, evidence of proper financial responsibility (insurance), and valid operating authority.  The carrier also had to have a satisfactory safety rating from DOT.  DoD's business is very attractive and on average prior to November 1992, DoD was processing an estimated 25 applications per month of carriers seeking DoD approval.  Without any effective screening or barriers to gaining approval the less than reputable carrier entering the system could under bid the more reputable carriers and were literally squeezing them out of the DoD business arena. 

As the inspection program began those carriers failing the CSS inspection were being removed from the program.  However, with the DoD administrative approval process those that were disqualified and removed from DoD's program simply applied for a new operating authority and new name from DOT and within six months were once again a DoD approved carrier transporting military in the same unsafe high risk fashion as before.  CSS recognizing this revolving door, met with DoD officials to discuss the problem and find a solution.  The solution was to incorporate the on-site Pre-Qualification Inspection as the final step in the approval process. 

Prior to its introduction, SDDC was processing on average about 25 applications each month of passenger motor carrier seeking DoD approval.  With the notification that the on-site inspection would be the last step in the approval process and that reports of those failing the inspection would be forwarded to FMCSA, the number of applicants seeking DoD approval for the next three months was zero.  Since November 1992, the number of passenger motor carriers seeking DoD approval now averages about 2.8 carriers a month.  This removed a rather significant administrative burden from SDDC. 

In November 1992 there were still about 790 approved passenger motor carriers.  With the introduction of the Pre-Qualification inspection as the final step in the approval process, that number was reduced in 18 months to a more manageable number of just 396.  The number of DoD approved carriers is currently about 435.  While this fluctuates some from between 425 to 450, the base of approved passenger motor carriers has remained stable for almost 10 years now.

Another important fact is that on average since November 1992, 40% of those carriers seeking approval do not pass their initial Pre-Qualification inspection, which brings to light another important step that was incorporated into the program in 2000.  It became apparent to CSS during discussions with applicants seeking clarification of the information requested that many of these applicants would not be able to pass the inspection.  In an effort to save the government both time and money CSS met with and formulated what is now described as the Pre-Qualification Questionnaire.  This "questionnaire" is 7 pages of regulatory questions all designed to test the core competency of the motor carrier and determine its ability to pass the initial inspection.  Although not fool proof, it has served to eliminate from the on-site inspection process on average 23% of those applying for DoD approval.  The combination of the percentage of failure from the questionnaire screening and the actual on-site inspection still totals about 40 %. 

There is another important underlining benefit provided to both DoD's approved carriers and SDDC worth mentioning regarding the Pre-Qualification Inspection.  As mentioned previously, before the introduction of the Pre-Qualification inspection reputable carriers were continuously under bid by those who didn't re-invest their resources into maintaining safe operations and were essentially being squeezed out of the DoD business arena.  The Pre-Qualification inspection ensured that each carrier gaining approval was operating at a level already required by those that were approved.  This essentially leveled the playing field.  What this meant for SDDC was that even the lowest bidder was a highly qualified carrier.  As the approved carriers began to realize their business was protected from the less then desirable carrier they quickly began to re-invest their resources to enable them to meet DoD's transportation needs.  In fact with only 435 approved carriers, DoD seating capacity in the event of a national emergency is higher than it was when they had 790 approved carriers, and their transportation needs can be met with a much higher degree of safety.

Another minor change, which generated significant benefits and also closed a loophole in the process, was the move to maintain the list of approved passenger motor carrier by their legally registered name. 

Previously, some of the passenger motor carriers would register himself or herself with DoD using their legal name, their DBA name, and even their trade name if they had one.  So from SDDC's view, it looked like they had three different carriers, when in fact it was only one.  The problem was that if the company were disqualified under its legal name, it would continue to conduct business with DoD under one of its other registered names.  This was detected by CSS through the SSS inspection process and once presented to SDDC, the approved list and bidding process was changed to reflect only the carrier's legal name.

A lot of DoD's passenger transportation needs are also filled with those operations using vans, limos, and taxis.  However, initially because these types of operations were essentially unregulated there were no set standards by which to evaluate these types of operations for SDDC.  Again SDDC and CSS put their heads together and released the Addendum to the Military Bus Agreement in 1998.  The "Addendum" requires these types of operations in order to become DoD approved to literally follow and meet the guidelines of the Federal Motor Carrier Safety Regulations.  There was obviously a learning curve considering these types of operation never had to worry about drug and alcohol testing, qualification files, time records or even maintenance files, but the standard was set and it proved to be the right move.  During the 15 year history of the program there has only been one recorded fatality and that was with one of those previously unregulated operations.

The mission is simple, provide SDDC and Transportation Officers nationwide, the ability to select with confidence, a passenger motor carrier from the DoD approved list who can, with the highest degree of probability, provide safe, secure, and reliable transportation services for the troops.