TRANSCOM gets green light for ‘corrective action’ on $7B household goods contract

transcom-gets-green-light-for-‘corrective-action’-on-$7b-household-goods-contract

U.S. Transportation Command officials have been cleared to move ahead with their review to decide whether a $7.2 billion contract for outsourcing the management of service members’ household goods moves was properly awarded.

On June 16, the Government Accountability Office dismissed two protests against the award, filed by unsuccessful bidders. This GAO action signals the two bidders have agreed with TRANSCOM’s plan to take corrective action regarding the contract, and gives TRANSCOM the green light to start reevaluating the bids to decide who should get the contract.

TRANSCOM is re-evaluating the four bidders who were in the competitive range, and will make a new award decision, according to sources familiar with the process. They’re looking at allegations provided by an “interested party,” reviewing the evaluation record, and gathering more information.

The contract, which was awarded to American Roll On Roll Off Carrier Group, of Parsippany, N.J., known as ARC, was to cover a nine-month transition period and three-year base period. But if all the options are exercised, the contract will be worth about $20 billion over nine years.

The contract is aimed at fixing military families’ long-standing problems with damaged household goods, and other frustrations with movers, and puts management of the moving process in the hands of a consortium of private companies headed by ARC. All household goods moves before February, 2021 will continue under the current system.

TRANSCOM announced the contract award in April. Two unsuccessful bidders, HomeSafe Alliance, LLC and Connected Global Solutions, LLC filed protests in late May. A third bidder, Hi-Line Moving Services, Inc. filed a protest that was dismissed in December.

On June 9, TRANSCOM notified GAO of its request to take corrective action, after “an interested party” provided information that they believed should have been considered in the Global Household Goods Contract award decision, a TRANSCOM spokesman said June 10.

Dismissing protests is common for GAO in these cases where the agency has proposed corrective action. GAO determines whether that action will make the protests academic, and at that point, will dismiss the protests.

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TRANSCOM had no comment on the GAO action.

“U.S. TRANSCOM intends to take corrective action to consider this new information, gather facts and conduct a review of the award,” the TRANSCOM spokesman said in the June 10 statement, and noted the corrective action is expected to be complete “in the coming weeks.”

A spokesman for American Roll On Roll Off Carrier Group, known as ARC, previously said corrective actions following awarding of contracts are not uncommon.

ARC is the lead in the contract. The Team ARC consortium includes UniGroup, a $1.7 billion transportation company and the parent of United Van Lines, and Mayflower Transit; Suddath, a company that moves about 30,000 military members a year; Atlas World Group, the parent company of Atlas Van Lines, Inc. and Atlas World Group International; The Pasha Group, which has moved military members since 1947; and Deloitte.

ARC, which has done business with DoD and other government entities for decades, is part of the Norwegian company Wallenius Wilhelmsen, and operates the largest U.S.-flag fleet of roll-on, roll-off vessels.

According to a Justice Department press release from July, 2016 Wallenius Wilhelmsen Logistics pleaded guilty to price fixing and paid a $98.9 million criminal fine for its involvement in a conspiracy to fix prices of international ocean shipments of roll-on, roll-off cargo to and from the Port of Baltimore and other locations in the United States.

In August, 2019, federal prosecutors in Australia charged Wallenius Wilhelmsen Ocean AS with criminal cartel conduct.

TRANSCOM officials did not comment about whether they knew about the previous Justice Department action against ARC’s parent company, or whether it played any part in the decision to re-evaluate the contract award.

About

Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book “A Battle Plan for Supporting Military Families.” She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.

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