Multibillion-dollar military moving contract delayed again after losing bidder sues

A planned overhaul of the military’s household goods moving system is on hold once again because of yet another bid protest challenging DoD’s latest award of the multibillion-dollar Global Household Goods contract (GHC).

One of the losing bidders, Connected Global Solutions (CGSL), filed suit in the Court of Federal Claims last week after having lost its protest before the Government Accountability Office earlier this month. The lawsuit is, in effect, an appeal of that GAO decision.

In response, U.S. Transportation Command (TRANSCOM) said on Wednesday that it has issued another stop work order to the winning bidder, HomeSafe Alliance. Work had also been paused during the GAO protest.

The latest delay wasn’t strictly required — the court hasn’t issued an injunction ordering one — but TRANSCOM said it believes a voluntary pause in the transition to the new contract will help expedite a final decision in the case.

“The command assesses that voluntarily agreeing to the stay of performance reduces the length of the litigation process, which is in the best interest of the program and customers,” TRANSCOM officials said in a statement. “If the court finds in TRANSCOM’s favor, the transition period will resume as soon as allowable at the point in which it was paused. If the court finds in CGSL’s favor, TRANSCOM will comply with any directed remedies.”

CGSL was one of two losing bidders who also had their protests denied by GAO earlier this month. Both had challenged DoD’s award to HomeSafe, worth up to $17.9 billion over a contract option period that could extend for as long as nine years, on numerous grounds, all of which GAO found to be “without merit.”

The other losing bidder, American Roll-on-Roll-Off Cargo (ARC), has not yet said whether it also intends to continue the protest process at the claims court.

Also this week, GAO released public versions of the legal decisions it made denying both the ARC and CGSL protests on March 3. The documents are heavily redacted, and don’t reveal the complete reasons why the office’s protest arbiters ultimately upheld TRANSCOM’s award to HomeSafe.

They do shed some light on the competition though, including by showing that TRANSCOM ultimately decided HomeSafe’s proposal would be the best-value approach to revamping the troubled military moving system, even though its bid wasn’t the cheapest. ARC’s bid was the highest at $19.5 billion. CGSL’s was just below HomeSafe’s at $17.7 billion.

GAO found TRANSCOM’s source selection team made a perfectly rational decision when they determined the slightly higher price point was worth it.

The office sided with the government’s assessment: “Due to HomeSafe’s more advantageous and better-detailed technical proposal, the government can, without difficulty, justify paying a minimal 1.26 [%] price difference, because HomeSafe’s superior technical capability outweighs the minimal cost difference,” according to TRANSCOM documents quoted in the final decision.

The newly-published decisions also shed light on why the latest round of the GHC award process took so long.

DoD first awarded the contract to ARC in April 2020, but GAO upheld protests by both HomeSafe and CGSL later that year, finding the award was tainted by “pervasive” violations of procurement law. After that, TRANSCOM said it would re-evaluate the bids and make a new award.

But the GAO decisions released this week as part of the new round of protests show that TRANSCOM started the evaluation process completely from scratch, helping to explain why it took officials another full year to make the latest award to HomeSafe.

During that time, TRANSCOM completely replaced the source selection team that had made the initial, problematic award to ARC, going so far as to forbid them from viewing any of the documents involved in the first selection team’s decision process. Then, they held five separate rounds of new discussions with all three bidders to help them correct what the new source selection team thought were deficiencies in each company’s bid.

The basis of CGSL’s latest challenge at the Court of Federal Claims is still unknown. The company’s complaint was filed under seal, and Judge David Tapp, who will ultimately decide the case, hasn’t yet approved a redacted version of the lawsuit CGSL proposed for public release.

Also unclear is how much of delay the new protest will present. Unlike GAO, which must decide bid protests within 100 days, there’s no deadline for the court to reach a final decision. TRANSCOM said the process could take “several months.” That’s likely an optimistic assessment, based on the court’s track record in dealing with complex bid protest litigation.

Before the most recent stop work order, HomeSafe believed it would be able to start performing moves under the new system before the end of calendar year 2022, the company’s CEO told Federal News Network in an interview earlier this month.

Whenever a final contract is allowed to proceed, DoD hopes to use it to reduce longstanding problems in the military moving system, including routinely delayed shipments and frequent damage claims.

In general, officials believe they can fix many of the system’s problems by putting a single system integrator in charge of managing the entire military household goods moving enterprise, including its relationships with thousands of local moving companies, who will operate as subcontractors to the GHC vendor.

It would be a dramatic change to how the system operates now, where DoD contracts with local movers and van lines one service member at a time, with no global visibility over the moving industry’s capacity and demand for its services.

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