Defense

Two firms renew legal challenges to DoD’s $7B moving contract

The two companies who had challenged U.S. Transportation Command's household goods contract have returned to the Government Accountability Office after TRANSCOM...

Jared Serbu@jserbuWFED

July 15, 2020 9:23 am

3 min read

A Pentagon contract meant to completely overhaul the military’s system for moving service members’ belongings around the world is once again under protest.

The same two companies who had initially challenged the $7.2 billion Global Household Goods Contract (GHC) in May filed new bid protests at the Government Accountability Office this week, meaning the contract could continue to be tied up until Oct. 21, the due date for GAO to rule on the latest round of challenges.

GAO dismissed protests by Connected Global Alliance LLC, and HomeSafe Alliance LLC late last month after U.S. Transportation Command pledged to take corrective action on at least one of the issues they raised in their complaints. But less than two weeks later, TRANSCOM announced it wouldn’t be taking any corrective action after all, and re-awarded the contract to the same vendor it initially picked for the award, American Roll-On Roll-Off Carrier Group (ARC).

“The decision to re-award GHC in light of the serious issues raised is extremely disappointing,” Al Thompson, HomeSafe’s CEO said in a statement. “We are confident GAO will agree that errors have been made on a major contract that touches every member of the armed forces and their families.”

The firm raised nine separate issues in its initial protest, but according to TRANSCOM, the primary one that led the command to pull the contract back and take corrective action was that it appeared ARC had failed to disclose the criminal history of its parent company.

TRANSCOM later explained that the whole thing turned out to have been a misunderstanding.

ARC, officials said, had inadvertently selected the wrong parent company, Wallenius Wilhelmsen Logistics AS, when they registered themselves in the government’s System for Award Management. That company plead guilty to a bid rigging and price fixing conspiracy in 2016 and paid a nearly $100 million fine; the Justice Department indicted three of its current and former executives as well.

But since ARC’s legal parent company is Wallenius Wilhelmsen ASA, there was no need for it to disclose those misdeeds, TRANSCOM said. The latter Wallenius Wilhemsen is merely “a separate company with a similar name,” the command said in a July statement.

But as Federal News Network reported in detail last week, that’s only true in the most formalistic sense. Wallenius Wilhelmsen ASA is the parent company to both ARC and Wallenius Wilhelmsen Logistics AS. The ultimate parent company disclosed the conviction to its investors at the time, and set aside money to pay the fine. Its current chairman is the same individual who entered the guilty plea on behalf of Wallenius Wilhelmsen Logistics AS in a federal courtroom.

HomeSafe said the criminal history issue was only one of many it was challenging, however. The company, a joint venture led by KBR, is also asserting the same sorts of claims that tend to form the basis for many bid protests: That its price was lower, that the agency’s pre-award discussions were misleading, and that the technical evaluation process was flawed.

“USTRANSCOM has a once in a generation opportunity to transform the current moving system that is overpriced and underperforming, causing great dissatisfaction across the armed forces,” the company said. “As 2021 promises to be a record breaking year for military household moves due to COVID-related delays, the new protest filed gives USTRANSCOM one more chance to create a military household goods movement system that meets the reasonable and deserved expectations of military members and their families.”