The U.S. Transportation Command, based at Scott Air Force Base, was taken to task by the Pentagon’s inspector general for a series of mistakes in its oversight of a troubled contractor hired to ship military members’ vehicles to overseas duty stations and back.
The Army Surface Deployment and Distribution Command, SDDC, also based at Scott, made $162 million in “potentially improper payments” to International Auto Logistics, according to the Defense Department inspector general report issued Wednesday.
Throughout 2014, IAL, of Brunswick, Ga., was the target of sharp complaints by military members that the contractor had lost or severely damaged military members’ privately-owned vehicles, while delivering more than 27,000 vehicles later than promised, according to the IG report. The report is titled “U.S. Transportation Command Needs Further Improvements to Address Performance Concerns Over the Global Privately Owned Vehicle Contract III.”
Although U.S. Transcom made progress in addressing IAL’s performance, “improvements are needed in contract oversight,” the IG report states. Transcom contracting staff and SDDC “did not implement adequate controls to ensure proper contract oversight and address all performance concerns,” according to the report.
In the report’s management comments section, which provided Transcom a chance to rebut the IG report, Army Lt. Gen. Stephen R. Lyons, Transcom’s deputy commander, acknowledged IAL’s “very poor performance” at the start of the contract and during the summer moving season.
“Performance one and a half years ago was unacceptable and many service members were adversely impacted by delivery delays,” Lyons wrote.
But Lyons pushed back against the IG’s most serious criticisms of Transcom’s handling of the IAL matter, noting that “the contract is currently executing as intended...and produced $54 million in savings in the first year of performance through November 2015 including a successful high volume 2015 summer moving season.”
Lyons added that Transcom is confident that “contract administration practices are more than sufficient to ensure successful performance continues.”
The IG probe was launched in late 2014 under pressure by U.S. Sen. Dick Durbin, D-Ill., the ranking Democrat on the Senate Defense Appropriations Subcommittee, and other senators after they were inundated with complaints by angry military families who were upset their cars were arriving months later than promised, and often in poor shape.
In a written statement issued Friday, Durbin said that when he began looking into problems with IAL, “the percentage of servicemembers’ vehicles delivered on time was 70 percent. It was unacceptable...”
One year later, the “on time rate is 97 percent,” Durbin wrote. “It hasn’t been a quick or an easy task to bring this contract into compliance, and I appreciate the Department of Defense and Transcom’s commitment to getting this program on the right track.... With Transcom’s continuing oversight, I am confident that this contractor is now better prepared to meet the needs of our nation’s servicemembers and their families while saving tens of millions in taxpayer dollars.”
One of the biggest problems the IG probe uncovered concerned IAL’s car storage center in Chester, S.C. The Transcom “contract required vehicles be covered, locked, and stored in accordance with standard commercial practices” according to the IG report. “Specifically, numerous leaks were present throughout the facility, which allowed water to drip onto numerous vehicles. In addition, vehicles were unlocked; dirt and debris accumulated on uncovered vehicles; and vehicles were parked in standing water.”
IAL was awarded the new contract in September 2013. But injunctions by the company that held the old contract for 12 years, American Auto Logistics, kept IAL from getting started on the project until May 1, 2014, the peak shipping season.
IAL eventually won appeals before the Government Accountability Office and the U.S. Court of Federal Claims, but lost six months of valuable preparation time, according to an IAL spokeswoman.
In any event, mounting anger and frustration with IAL led military personnel and their spouses to start a Facebook page where they could vent their rage about IAL’s shortcomings, compare information on missing vehicles and display photos of damaged cars and trucks.
Three months after IAL took over shipping of troops’ vehicles, the number of customer complaints had soared. Those complaints led Transcom, by August 2014, to assume oversight of the contract from SDDC and set up a team of logistics and supply chain experts, its “Fusion Cell Team,” to address problems in tracking and monitoring the movement of customer vehicles.
The IG report was not all negative. It applauded Trancom for handling the problems, even though it took months for the command to implement sufficient safeguards to ensure proper oversight.
“Without effective oversight, (Transcom) will not have sufficient information to assure transportation and storage services received are consistent with contract quality requirements and performed in a timely manner,” according to the IG report.
IAL’s on-time delivery of vehicles in the summer of 2014 fell below the contract's 98 percent requirement, noted the auditors, adding that it “ never exceeded 70 percent.”