A $7.2 billion contract for outsourcing the management of moving service members’ household goods has been pulled back by the U.S. Transportation Command.
The contract, which was awarded to American Roll On Roll Off Carrier Group, of Parsippany, N.J., 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.
TRANSCOM officials are reviewing reported allegations made by “an interested party,” according to TRANSCOM spokesman Micheal Walton.
“An interested party has presented U.S. TRANSCOM with information that they believe should have been considered in the Global Household Goods Contract award decision. U.S. TRANSCOM intends to take corrective action to consider this new information, gather facts and conduct a review of the award,” he said, in a statement.
TRANSCOM notified the Government Accountability Office of their request to take corrective action on June 9.
“If approved, U.S. TRANSCOM will review the entire evaluation record, to include reviewing the reported allegations along with gathering additional facts. We anticipate the corrective action to be complete in the coming weeks,” Walton said.
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. All household goods moves before February, 2021 will continue under the current system.
Protests were filed with the Government Accountability Office by two of the unsuccessful bidders on the contract — HomeSafe Alliance, LLC and Connected Global Solutions, LLC.
A spokesman for American Roll On Roll Off Carrier Group said corrective actions following awarding of contracts are not uncommon.
“Corrective action occurs in a substantial number of GAO protests where an agency determines that it would like to address potential issues in the record or raised by the protests,” said Charles Diorio, spokesman for ARC. “U.S. TRANSCOM will re-evaluate proposals and render a new award decision.”
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 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.
TRANSCOM officials did not immediately comment about whether they knew about the previous Justice Department action, or whether it played any part in the decision to re-evaluate the contract award.
ARC officials did not immediately comment on that aspect.