GAO rejects legal challenges to multibillion dollar military moving contract

Editor’s Note: This story has been updated to incorporate new comments from U.S. Transportation Command and HomeSafe Alliance.

The Defense Department’s attempt to fundamentally restructure its household goods moving system for military members overcame a major roadblock on Thursday as the Government Accountability Office denied five separate protests losing bidders had filed.

GAO ruled against each of the pending challenges to the multibillion dollar award — three by American Roll-On-Roll-Off Carrier Group (ARC) and two by Connected Global Solutions. The protest arbiter has not yet published public versions of its decisions, but found...

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The Defense Department’s attempt to fundamentally restructure its household goods moving system for military members overcame a major roadblock on Thursday as the Government Accountability Office denied five separate protests losing bidders had filed.

GAO ruled against each of the pending challenges to the multibillion dollar award — three by American Roll-On-Roll-Off Carrier Group (ARC) and two by Connected Global Solutions. The protest arbiter has not yet published public versions of its decisions, but found that each of the protests were “without merit,” Ralph White, GAO’s managing associate general counsel for procurement law said in a statement.

U.S. Transportation Command awarded the Global Household Goods contract (GHC) to HomeSafe Alliance, LLC in November. The procurement is worth at least $6.2 billion, and possibly up to $17.9 billion if DoD exercises all of its contract options over the next nine years. The department plans to use the contract to transition all military members’ permanent change of station moves to a single managed service provider, rather than contracting with companies on a move-by-move basis, as it does today.

“We’re excited to begin implementing the contract to improve the household goods shipment process for service members, civilians and their families,” Gen. Jacqueline Van Ovost, TRANSCOM’s commander said in a statement. “The stability, capacity management, and accountability delivered through GHC will benefit our people and the moving industry.”

ARC said it was disappointed by GAO’s decision.

“We will review the GAO decision and evaluate next steps, including any further legal action,” a spokesman said.

Both ARC and Connected Global Solutions have the option of continuing the protest process via lawsuits at the Court of Federal Claims. Representatives for the latter company could not be immediately reached for comment after business hours on Thursday.

Both companies had challenged the contract award on multiple grounds, including by alleging that TRANSCOM contracting officials used an unreasonable approach to evaluating their technical proposals and a flawed analysis of the “best value” tradeoffs involved in each bid, White said.

At the time the contract was first awarded, DoD and HomeSafe said military moving services would start transitioning to the new contract in late 2022. It remained unclear Thursday how much the GAO protest process would set that timeline back; TRANSCOM officials did not immediately respond to a request for comment Thursday evening. The process could also be further delayed if either or both companies pursue more protests before the Court of Federal Claims and the court issues a stay.

DoD has been trying to reform the much-maligned household goods moving system by hiring a single logistics company to manage the entire enterprise for several years. An earlier attempt was derailed by another series of bid protests in 2020.

TRANSCOM first awarded the contract to ARC that April , but HomeSafe and Connected Global Solutions protested the contract. GAO upheld both companies’ challenges several months later, finding the initial award was plagued by “pervasive” violations of federal contracting rules, including a failure to do enough due diligence to ensure ARC was a responsible bidder.

TRANSCOM took another year to reevaluate the companies’ proposals before deciding to award the contract to HomeSafe instead.

Al Thompson, HomeSafe’s CEO said in an interview that his company currently expects moves to start taking place under the new contract in December of this year. At that point, TRANSCOM will transition 25% of the military moves to the new GHC contract, and the workload will gradually increase, with HomeSafe managing all domestic moves by next February. International moves will transition to the contract in September 2023, after the peak moving season.

He said TRANSCOM officially lifted the stop work order it imposed during the bid protests on Friday, letting the company begin transition work.

“There are many things we need to do to bring HomeSafe Connect to life. That’s our information technology solution, which is the great enabler for performing on the contract,” he told Federal News Network. “So we have teams working very hard on that right now to finish the development and then quickly move into testing, and U.S. TRANSCOM will then do their own independent testing. We also have an outside firm that’ll do penetration testing to meet the operational requirements of the program, but also to meet some very stringent cybersecurity requirements so that we’re absolutely certain that we’re protecting data for our military service members and their families.”

The company also thinks it will need to directly hire about 750 new employees to handle customer service, IT and other functions. But it will also have to establish contractual relationships with the thousands of moving companies who currently handle military moves, and help them transition to HomeSafe’s new technology platform.

“It’s a vast network of many local small business movers and larger companies that we need to bring together, so we are already planning an outreach strategy where we’ll be visiting a number of cities across the United States to meet with representatives of industry and assist them,” Thompson said. “We want to make sure that that we have a common user experience, and we also have to meet these very stringent cybersecurity requirements, which are kind of new to the moving industry. So we determined early on that trying to interface a large number of different systems would not allow us to meet those requirements.”

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