Court rules for DoD in challenge to $20B household goods moving contract

The Defense Department has prevailed for a second consecutive time in a long-running series of legal challenges to its plans to overhaul the military’s household goods moving system, paving the way, at least for now, to implement a multibillion dollar contract that could last for as long as a decade.

The Court of Federal Claims on Thursday denied two separate protest lawsuits filed by losing bidders who had challenged the up to $17.9 billion award to HomeSafe Alliance. The full decision is still under seal to allow time for parties in the case to argue portions of it should be redacted, but court records reflect Judge David A. Tapp ruled in favor of DoD and HomeSafe, and against the losing bidders, Connected Global Solutions, LLC (CGSL) and American Roll-on-Roll-Off Carrier Group (ARC).

The same two bidders had previously challenged the same contract in another bid protest before the Government Accountability Office. GAO ruled in March that the protests were without merit. Either bidder could still appeal Thursday’s decision to the Court of Appeals for the Federal Circuit; neither company immediately answered queries Thursday evening asking if they planned to do so.

But at least for now, DoD intends to press forward to finally implement the Global Household Goods Contract (GHC), which has working its way through the contracting system and various bid protests since at least 2018.

“The favorable decisions from both the Government Accountability Office and the Court of Federal Claims validate the integrity of the GHC program and award,” Brig. Gen. Joel Safranek, the director of the Defense Personal Property Management Office said in a statement Thursday evening. “We’re excited to resume the transition towards this vital reform effort to the household goods relocation program.”

Moves under new system will begin next year

Gen. Jacqueline Van Ovost, the commander of U.S. Transportation Command, told reporters in August that as long as the court ruled in the government’s favor by October, DoD would be able to start handing the military moving process over to HomeSafe in 2023 — though not in time for the peak summer moving season.

“We have learned that implementing major changes during peak season does not go well. So we’ll work with the contractor, work with their software, make sure all their subcontractors are lined up, but we will use the current system for peak season next year,” she told reporters during a media roundtable at the annual Air Force Association conference. “Then, come about October, we’ll start to integrate. And we’re integrating in such a way we’re sort of cutting off our [legacy] system very methodically.”

Van Ovost said she expected about 25% of the military’s total moves next October to be handled under the new system, in which HomeSafe, a joint venture led by KBR and Tier One Relocation Services, will eventually serve as the sole manager for all military household goods moves around the world. Currently, DoD contracts individually with more than 900 individual companies for each and every move, a method officials have said leads to poor quality control and an inability to manage capacity in the overall moving system.

The new contract should be fully implemented worldwide by the peak summer season of 2024, Van Ovost said, barring any further court challenges.

In a statement Thursday evening, Al Thompson, HomeSafe’s CEO, said the company was “extremely pleased with the court decision.

“Combining our HomeSafe Connect advanced digital solution and global program management expertise, we will transform and modernize the relocation experience for the members of our armed forces, Department of Defense civilians, and their families.”

Tech improvements underpin much of the new system

In an interview last year with Federal News Network, Thompson, a former senior official at the Defense Logistics Agency, said technological advances would be at the center of the improvements the company believes it can make to the moving system.

Once the contract is implemented, all military members will manage their moves via a single app, and artificial intelligence algorithms will help determine the most efficient carrier to get a member’s goods from one duty station to another, he said.

“For example, between a military concentration area of Hampton Roads, Virginia, and San Diego, there’s a tremendous volume of household goods shipments. But if you were to go out on the interstates and track these moving vans, many of them are chasing each other half-full,” Thompson said. “We believe that more of those trucks are going to be full. That’s going to significantly reduce cost for the movers and increase their bottom line performance, because instead of driving half-empty vans coast to coast, they’re going to be much more close to 100% full. That leverages capacity that’s kind of hidden today. It’s out there, but we can’t get at it, because we don’t have this global system integrator.”

But the web-based technology the company plans to use was also one of several points at issue in the bid protest lawsuit. ARC had alleged HomeSafe had misrepresented itself by claiming a key portion of its technological approach was compliant with the “High” designation under the government’s FedRAMP program for cloud security. HomeSafe responded that its approach could indeed be configured to attain an authority to operate (ATO) at the “High” level, and that the claim was a misunderstanding about the difference between compliance and an actual ATO, which companies typically are granted only after a contract has been awarded.

ARC and CGSL made several other claims in their protests, including that TRANSCOM held unequal discussions with the bidders and made irrational tradeoff decisions during the source selection process. Although it’s not yet clear why the court rejected those arguments, GAO previously found many of the same claims were “without merit.”

And while it’s not yet clear whether Thursday’s ruling is the final word on the GHC contract, it’s only the latest chapter in what has been a long bid protest saga.

TRANSCOM had initially awarded the contract to ARC in 2020. HomeSafe and CGSL protested the award, and later that year, GAO determined DoD committed “pervasive violations” of procurement law in its award to ARC. TRANSCOM responded by taking “corrective action” — restarting the entire bid evaluation process from scratch with a brand new  new source selection team — and eventually awarding the contract to HomeSafe instead in November of last year.

Once the long slog through the contracting, protest and transition process is finally finished, TRANSCOM hopes the overhauled system will be a dramatic improvement to the current decentralized moving system, in which DoD itself contracts directly with moving companies. A 2020 DoD Inspector General report found, for example, that 41% of shipments were arriving late, and 21% had at least one claim for damage.

But Van Ovost said TRANSCOM has been working on incremental improvements to the current system in the meantime, with the input of military members and their familes.

“We’re doing things like a better claims capability process through your phone, and more transparency on where they’re at in the process,” she said. “You can already see now, for example, for the subcontractor doing the work, the customer feedback on them and where your stuff is … because we can’t wait for GHC. When the single move manager comes on board, we want this all nicely ironed out such that they can just plug in with their software system and we’re ready to go.”

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