GAO Overturns Award of $19.9 Billion Global Military Moving Contract
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The U.S. Government Accountability Office has overturned the award of a potential nine-year, $19.9 billion contract to a New Jersey company for moving military household goods worldwide.
The lucrative Global Household Goods Contract, first awarded in April to American Roll-on Roll-off Carrier Group, or ARC, of Parsippany, N.J., is intended to address military families’ long-standing problems with delays and damaged goods during moves to assignments worldwide, according to the Department of Defense U.S. Transportation Command.
However, on Oct. 21, the GAO issued a decision saying it has sustained the protests of two competitors for the contract, and was sending it back to TRANSCOM with recommended instructions for reconsideration.
The sweeping contract calls for the contractor to provide all personnel, supervision, training, licenses, permits and equipment necessary to perform household goods relocation transportation and storage-in-transit warehouse services worldwide.
The GAO decision was in response to protests lodged by two of ARC’s competitors: Connected Global Solutions of Jacksonville, Fla.; and HomeSafe Alliance, of Houston. The protests alleged that ARC lacks the experience and capability to move the estimated 400,000 members of the military and their families and DOD employees across the globe each year.
In its decision, GAO said it had specifically sustained both competitor protests as to TRANSCOM’s “responsibility findings, the conduct of discussions, and the evaluation of oral presentations.”
By law, GAO can only make recommendations on contractor protests of an agency awarding a contract. But failure to follow GAO recommendations in such contract protest disputes is extremely rare, according to GAO records.
One of the more serious contentions raised in June by both protesters was TRANSCOM’s determination of what GAO said was relevant information on ARC’s initial bid that listed a Norwegian company as an ARC affiliate that had been convicted of an antitrust conspiracy to rig bids and fix prices.
After looking into the allegation for nearly two weeks, TRANSCOM permitted ARC to change the name of its parent company on the bid to Wallenius Wilhelmsen ASA, which was not part of the 2016 conviction for Sherman Antitrust violations. “A separate company with a similar name, Wallenius Wilhelmsen Logistics AS, was convicted,” TRANSCOM said.
As a result of the change, TRANSCOM re-awarded the contract to ARC.
But GAO said it wasn’t clear whether TRANSCOM looked deep enough into the protest allegation.
“We sustain the challenge to the agency’s responsibility determination because the contracting officer left unresolved a conflict in the record concerning whether ARC’s contract performance would include the involvement of affiliates with past engagement in criminal activities,” GAO said.
GAO said the contracting officer must determine, among other things, that a contractor has ‘a satisfactory record of integrity and business ethics.’ ”
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In both decisions supporting the protests, GAO recommended that the agency take steps to remedy the flaws in the procurement. “These recommendations include conducting a new round of oral presentations and discussions, permitting the submission of revised proposals, and re-evaluating those proposals.”
“We also recommended that the agency make a new decision about which of the proposals offers the best value to the government. We noted that if the agency again decides that the proposal submitted by ARC offers the best value, it should perform a new responsibility review, consistent with the findings in our decision,” GAO said.
In addition, GAO recommended that both protesters be reimbursed the “reasonable costs associated with filing and pursuing their protests.”
In a statement, ARC said it is “disappointed” with the GAO decision.
“Team ARC remains committed to consistently delivering a superior relocation experience for service members and their families,” said Eric Ebeling, CEO at ARC. “We will evaluate our options in light of the GAO’s decisions and determine the appropriate next steps.”
“HomeSafe Alliance is pleased by TRANSCOM’s decision to accept new proposals,” the company’s CEO, Al Thompson, said in a statement, “and views this as the best possible step for both ensuring efficient moves for our troops, as well as for reducing costs for our country’s taxpayers.”
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