Pay & Benefits

$20 billion plan to outsource management of military household moves hits roadblock

The government’s plan to outsource its management of military household goods moves hit a major roadblock Wednesday after the Government Accountability Office decided in favor of two protesters of the contract, which had a potential cost of $19.9 billion over nine years.

The GAO recommended that U.S. Transportation Command fix the flaws in its procurement decision awarding the contract to American Roll-on Roll-off Carrier Group, Inc., of Parsippany, N.J., according to a GAO announcement. TRANSCOM must make a new decision about which proposal will be the best value for the government.

The contract, awarded in May and originally set to start in February, was aimed at fixing military families' long-standing problems with damaged household goods, and other frustrations with movers. Those problems came to a head in 2018. It sets up a new system where a single commercial move manager would have overseen everything related to the movement and temporary storage of household goods, essentially privatizing a function currently conducted by TRANSCOM.

The GAO analysts recommended that TRANSCOM conduct a new round of oral presentations and discussions; allow revised proposals to be submitted, and reevaluate those proposals; and make a new decision about which of those proposals is the best value for the government.

In a statement provided to Military Times, TRANSCOM officials said they remain committed to the concept of creating a single move manager for household goods “as soon as feasible while adhering to all federal acquisition laws and regulations.” They acknowledged there will be a delay but didn’t provide a possible timeline; one source said this could delay the start of a new global contract until 2022.

TRANSCOM hasn’t yet made a decision about scrapping the contract with ARC. TRANSCOM “is committed to addressing and remedying the acquisition concerns identified by the GAO,” officials stated. “We are reviewing the GAO comments to determine the way ahead, which will lead to the implementation of the [Global Household Goods' Contract].”

TRANSCOM is required to advise GAO whether they will comply with the recommendations.

The protests and GAO’s decisions focused on technical aspects of the selection process, according to TRANSCOM, “but did not challenge the foundational underpinnings of the entire household goods move improvement effort.”

HomeSafe Alliance, LLC, of Houston, and Connected Global Solutions, of Jacksonville, Fla., filed the protests. They challenged TRANSCOM’s determination that ARC, who won the contract, is a responsible contractor. They also claimed that TRANSCOM conducted “unequal discussions” during negotiations, and challenged the agency’s evaluation of oral presentations. GAO agreed with those challenges.

GAO also agreed with the companies' challenges to TRANSCOM’s decision related to contract award being the best value.

Shortly after the contract was awarded in May, the companies filed protests with GAO, resulting in TRANSCOM pulling back the contract. “An interested party” provided information about ARC to TRANSCOM that they believed should have been considered in the award decision. They alleged that ARC didn’t disclose adverse information of its parent company and the parent company’s executives, as is required.

Justice Department officials confirmed to TRANSCOM that the adverse information was not affiliated with ARC or its parent company, according to TRANSCOM. After their review, TRANSCOM reaffirmed the contract with ARC.

In its announcement, GAO stated that if TRANSCOM decides again that ARC offers the best value, TRANSCOM should perform a new responsibility review of ARC, based on GAO’s findings.

GAO’s bid protest process is handled by its office of general counsel, examining whether agencies have complied with procurement laws and regulations.

GAO’s announcement was first reported by Military.com.

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