Every year, approximately 400,000 servicemembers and their families have their household goods moved and stored, equal to about 15% of all global moves. Following a large number of complaints about damaged property in 2018, the U.S. Transportation Command (TRANSCOM) decided to consolidate more than 900 commercial transportation service providers into one $20 billion Defense Personnel Property Program (DP3) contract. In April 2020, TRANSCOM awarded the contract to American Roll-On Roll-Off Carrier Group (ARC).
While the intent of consolidating the contract is to resolve many of the complaints surrounding the movement of the personal belongings of our nation’s warfighters, protests have been made that will delay the contract until at least October 15, 2020. The first two protests were submitted to the Government Accountability Office (GAO) immediately following the initial award of $7.2 billion to ARC.
Among the objections to ARC was the $98.9 million payment made in 2016 by its parent company, Wallenius Wilhelmsen ASA (WWASA), to settle an investigation into the alleged anti-competitive conduct of its U.S. subsidiary, Wallenius Wilhelmsen Logistics AS (WWLAS), in the car carrying industry by the Justice Department (DOJ). WWASA also owns shipping companies in Norway and South Korea that were fined for rigging cargo bids and price-fixing. ARC maintains that it is unrelated to ASA.
In response to the protests, after the initial award of the contract to ARC, TRANSCOM said it would take corrective action due to concerns and confusion about ARC’s parent company. But TRANSCOM then decided not to request or accept any revised bids from the other vendors and keep ARC. This action does not instill a lot of confidence that the low level of satisfaction by servicemembers with the movement of their personal belongings will be resolved.
The bidding disputes on the contract leave readers of a July 6, 2020 Federal News Network article baffled. According to TRANSCOM, the contract was considered for a rebid because the agency made an error in assuming the owners of ARC’s parent company had some unsavory dealings, but upon further reflection TRANSCOM determined that they were looking at a different company. Yet, the protests further delayed the start of the transition to the new contract as both TRANSCOM and GAO tried to determine whether the protests had merit. Had the allegations against ARC been raised and resolved before the contract award was issued, these delays – occurring during the busiest time for moving – could have been avoided.
On June 16, 2020, GAO dismissed the protests. Whether this resolves the questions raised about ARC’s parent company is yet to be seen. TRANSCOM, in its re-award notice, maintains that “since neither ARC, nor its parent company WWASA, have a record of misconduct, USTRANSCOM substantiated its original award to ARC because its proposal provided the best service for the best value for servicemembers, Department of Defense civilians and their families.”
As reported in Federal News Network on July 15, 2020, the two companies who filed the first protest filed a second set of protests to GAO, delaying the contract until at least October 15. They reiterated their concerns over the ownership of ARC, with one company claiming that its bid was lower. As the article noted, the parent company ASA paid the fine, and its current chairman pled guilty on behalf of AS. It defies common sense to argue that this is anything but a single, vertically integrated operation under the same ownership.
Regardless of ownership issues, it seems risky to hand over 15% of domestic and international moves to a single entity. It is hard to fathom how one company can physically handle that much work without a significant expansion of its business to closely match the thousands of people employed by the original 900 companies used by TRANSCOM.
It is also patently unfair. Every American has more than one moving company to choose from when they move. Military families should have that freedom to choose as well. They have enough to worry about without being concerned as to when and how their belongings will be transported as scheduled, on the same day and at the time they are needed, from one state to another or anywhere else around the world. The use of only one company will not make this process any less stressful.