USTRANSCOM Revokes $7 Billion PCS Contract

USTRANSCOM PCS Contract

Contract Revoked for Privatizing PCS Moves

There has been increasing pressure on defense officials to improve household goods moves for military families, and to hold moving companies accountable. Officials at U.S. Transportation Command (USTRANSCOM) have been considering several ideas and suggestions to improve the process.

USTRANSCOM  is a unified, functional combatant command which provides support to the ten other U.S. combatant commands, the military services, defense agencies and other government organizations, and is the executive agency for military household goods moves. However, the attempt to privatize military household goods moves has recently hit a delay. In a report by Military Times, a  $7.2 billion contract for outsourcing the management of moving service members’ household goods has been pulled back by the U.S. Transportation Command (USTRANSCOM ). USTRANSCOM officials are reviewing reported allegations made by “an interested party,” according to USTRANSCOM spokesman Michael Walton. “An interested party has presented USTRANSCOM with information that they believe should have been considered in the Global Household Goods Contract award decision. USTRANSCOM intends to take corrective action to consider this new information, gather facts and conduct a review of the award,” he said, in a statement.  Protests were filed with the Government Accountability Office by two of the unsuccessful bidders on the contract — HomeSafe Alliance, LLC and Connected Global Solutions, LLC.

The contract, which was awarded to American Roll-On, Roll-Off Carrier Group (ARC), of Parsippany, N.J., was to cover a nine-month transition period and three-year base period. But if all the options are exercised, the contract will be worth about $20 billion over nine years. According to its website, ARC provides global logistics and shipping services to the U.S. Government. ARC is part of the Norwegian company Wallenius Wilhelmsen and operates the largest U.S.-flag fleet of roll-on, roll-off vessels. This includes providing American-owned, managed, and crewed Ro-Ro shipping and intermodal services committed to the requirements of the Department of Defense, other U.S. Government departments and agencies, and commercial customers.

The ARC contract award is the first time the Pentagon has outsourced household goods and delivery system management. The contract is aimed at fixing military families’ long-standing problems with damaged household goods, and other frustrations with movers, and puts management of the moving process in the hands of a consortium of private companies. All household goods moves conducted before February, 2021 will continue under the current system.

But instead, U.S. TRANSCOM on June 9 notified the Government Accountability Office (GAO) of a request to take corrective action on the contract. The GAO oversees government contract protests and disputes. “If approved, U.S. U.S. TRANSCOM will review the entire evaluation record, to include reviewing the reported allegations along with gathering additional facts. We anticipate the corrective action to be complete in the coming weeks,” Walton said.

“The United States Transportation Command (USTRANSCOM) has decided to take corrective action in response to protests of the contract awarded under Solicitation No. HTC711-19-R-R004,” ARC spokesman Charles Diorio said in a statement to Military.com. “This is a standard process available through the U.S. Government Accountability Office to ensure U.S. TRANSCOM  followed the terms of the solicitation and applicable acquisition regulations,” Diorio said of the protests in a news release posted to ARC’s website May 28. “With large government contracts, it is not unexpected that unsuccessful bidders protest the award. We have no reason to believe that the protest process will change the ultimate outcome of the award.”

“Corrective action occurs in a substantial number of GAO protests where an agency determines that it would like to address potential issues in the record or raised by the protests,” said Charles Diorio, spokesman for ARC. “U.S. TRANSCOM will re-evaluate proposals and render a new award decision.”

ARC is the lead in the contract. The Team ARC consortium includes UniGroup, a $1.7 billion transportation company and the parent of United Van Lines, and Mayflower Transit; Suddath, a company that moves about 30,000 military members a year; Atlas World Group, the parent company of Atlas Van Lines, Inc. and Atlas World Group International; The Pasha Group, which has moved military members since 1947; and Deloitte.

According to a Justice Department press release from July, 2016 Wallenius Wilhelmsen Logistics pleaded guilty to price fixing and paid a $98.9 million criminal fine for its involvement in a conspiracy to fix prices of international ocean shipments of roll-on, roll-off cargo to and from the Port of Baltimore and other locations in the United States. No statements were provided by USTRANSCOM or ARC on if the Justice Department’s press release influenced the revoking of the contract.

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Justin Fisher is a currently serving with the Arkansas Army National Guard. His career has expanded two decades and has three deployments. He holds a Bachelor’s in Arts in Communications and hosts a weekly podcast featuring candid interviews with members of the military.