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August 16, 2014

Scott AFB at center of probe into beleaguered vehicle shipment program

Hundreds of privately owned vehicles belonging to U.S. military personnel, including some at Scott, have disappeared or been damaged after a newly formed company received the contract to move them to overseas bases and back.

The complaints about the missing cars are one reason the United States Transportation Command, which awarded the contract last year to International Auto Logistics, of Brunswick, Ga., took the unprecedented step of announcing Friday night it was sending out survey teams next week to car processing centers across the globe to look for the missing vehicles.

The announcement Friday is the latest in "a series of steps to restore confidence of service members and their families in the POV shipping process," according to the announcement from Transcom, which is headquartered at Scott.

These actions are being taken after a special Transcom task force trying to fix the problem visited several vehicle staging centers and "determined significantly increased contract surveillance during the contract transition is necessary," according to Air Force Brig. Gen. Paul Guemmer, the task force leader.

One of those who've complained about a missing car is retired Air Force officer Michelle Kastler, of New Baden, who still is waiting for her car to show up.

Kastler said she was not impressed by Transcom's announcement, which emphasized the survey teams will not be doing IAL's job for them.

"By sending out those teams, that is exactly what they're doing," Kastler said. "And think of the huge expense that's going to be."

In preparation for returning home after three years stationed at an Air Force base in Great Britain, Kastler dropped off her 2012 Hyundai Accent at a British port on May 23.

The car has been missing since. No one has been able to tell her where the car is, or when she can expect to receive it.

"It's ridiculous," said Kastler, who was promised delivery by July 17. "I feel it's kind of like a betrayed trust."

On May 1, International Auto Logistics in Brunswick, Ga., took over a nearly $1 billion, five-year contract to transport military personnel's privately owned vehicles between overseas duty stations and U.S. bases.

Since then, more than 500 informal complaints have been filed with the Surface Deployment and Distribution Command, which is based at Scott, along with more than 100 formal complaints filed with SDDC's inspector general regarding the contractor's performance, a spokesman for the command confirmed.

In addition, 550 inconvenience claims have been filed with IAL, which entitle claimants to reimbursements for lodging and travel until their vehicles show up.

According to the company's website, IAL lists Boyle Transportation, of Billerica, Mass., as a major subcontractor. Boyle's board of advisers includes three retired generals: Gen. William Tuttle Jr., the former commander of the U.S. Army Materiel Command, which overseas SDDC; Maj. Gen. Charlie Fletcher, Transcom's former director of operations and plans, and Maj. Gen. Dan Mongeon, former director of operations for the Defense Logistics Agency.

SDDC is an Army command that's part of the U.S. Transportation Command, also based at Scott. SDDC supervises the movement of military property. It directly oversees the IAL contract.

Navy Capt. Aaron Stanley, SDDC's personal property director, blamed the problems on the fact that IAL began the contract during the busiest time of the year, when about 40 percent of total vehicle volume -- or about 26,000 cars -- is shipped.

"That was a real challenging time window for the contractor to start," Stanley said.

To improve its performance, IAL has increased customer service staff at its Georgia headquarters and set up a call center in Honolulu that will take down customer names and questions, with a response promised in 24-48 hours, Stanley said.

Stanley said SDDC will "continue to put boots on the ground and to continue to provide the oversight that's required and talk with the contractor weekly ... daily, in most cases, to continue to address the issue."

Transcom awarded the contract to IAL in fall 2013 after a competitive bidding process. The contract was supposed to begin Dec. 1, but did not take effect until May 1 because of appeals filed with the Government Accountability Office and the U.S. Court of Federal Claims by the previous contract holder, American Auto Logistics, of New Jersey.

American Auto, in court documents, alleges that IAL is a small company that's been in existence only two years, and was led by a South Korea businessman linked to North Korea and the Rev. Sun Myung's Unification Church.

IAL's problems have resulted in:

* The creation by Transcom and SDDC of a 12-member "fusion cell team" consisting of "subject matter" and "supply chain" experts to evaluate and address critical issues affecting the U.S. military's privately owned vehicle shipping program, according to an announcement made Wednesday by the two commands.

* Military insurance carrier USAA, of San Antonio, creating a special team of claims processors to handle claims of missing cars filed by IAL customers. "What I've been telling people is, 'Give us a call and we can learn more about your situation, because policies are different according to the state you live in," USAA spokeswoman Rebecca Hirsch said

* A Facebook page where people have posted hundreds of complaints and photos of missing or damaged vehicles taken by military personnel and their spouses worldwide. An online petition accessible via the Facebook page is seeking the revocation of IAL's contract and giving it back to American Auto. That petition has received 1,230 signatures as of Saturday morning.

Amanda Nunez, an IAL spokeswoman, also blamed the complaints her company has received on the fact that IAL had too little time to implement the new contract.

"The volume of vehicles IAL has been requested to move from storage and ship in the months of June and July, over 36,000, represent the largest volume for those months in the history of the program," Nunez said in an email.

IAL submitted a winning bid of $919.2 million for the project, compared with a bid of $957.5 million from American Auto -- a difference of $38.3 million, or 4 percent.

Eight companies competed for the new contract, but in the end it came down to bids between American Auto, which had the contract for 12 years, and the hastily formed IAL, whose president, Doug Tipton, previously served five years as a top American Auto executive.

American Auto argued in court papers that IAL should not have received the Transcom contract because it lacked experience for a job that requires the overseas shipment of 65,000 vehicles annually, the storage of 8,500 other cars, and the settlement of thousands of insurance claims across 34 processing centers worldwide.

In its appeal, American Auto cited an article in Defense Industry Daily that stated that IAL in 2013 had no website, had revenues of only about $1 million and a staff of 10 people.

IAL, however, argued that its parent company, International Auto Processing, also of Brunswick, Ga., has 27 years of experience moving vehicles and has shipped more than 6 million vehicles for Mercedes Benz USA, General Motors and Hyndai USA and other car makers.

Nunez denied America Auto's claims that IAL has links to North Korea and the Unification Church.

Roll Call magazine contended in a June article that a man named Park Sang-Kwon is really IAL's chairman and that he started a joint-venture between North and South Korea that was financed by the Rev. Moon's Unification Church.

The General Accounting Office and the court of claims "determined this allegation has no merit," according to Nunez's email.

Although America Auto warned that IAL did not have the resources to handle such a large contract, the federal government has repeatedly sided with the Georgia-based firm.

The GAO found in its favor, as did federal claims court Judge Marian Blank Horn, who in a June 24 decision concluded the government followed the law in awarding the contract.

American Auto plans to appeal in U.S. district court.

Meanwhile, hundreds of military families are still wondering about the whereabouts of their cars.

Katherine Wenzel's husband, an Army sergeant, was transferred to Fort Leonard Wood, Mo., located three hours southwest of St. Louis, after several years stationed in Germany.

The Wenzels turned over their 2005 Mitsubishi Lancer to IAL on June 10. They were promised a June 23 delivery date. The car still has not arrived.

"I've called IAL at least 20 times," Wenzel told the News-Democrat. "Every time I've spoken to somebody, it's been a different story."

Unhappiness with IAL is not universal. On Thursday, at the sprawling SDDC vehicle processing center in Bridgeton, Mo., Army Lt. Col. Bill Taylor was pleased as he climbed into his Chevrolet pickup truck, which arrived on time from Alaska.

"I'm extremely satisfied," Taylor said. "It was a great experience on either end. Very professional, quality product."

For Kastler, the retired Air Force officer in New Baden, the decision to go with IAL, in her opinion, came down purely to an effort by Transcom to shave costs, but at great personal expense to military personnel.

"It's cost. It's cost," Kastler said. "It has to be that they saw the price ticket and said, 'Hey, this year we've got to cut X million dollars, here's one way to do it.'"

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