What caused the military to halt a $7.2 billion contract to fix its household moves?
The company that had won a $7.2 billion government contract to provide moving services for military families said Tuesday it has never been accused of any criminal activities and that parties with a vested interest are promoting a “false and misleading narrative.”
American Roll-On Roll-Off Carrier Group, Inc. (ARC), based in Parsippany, N.J., won the large U.S. Transportation Command contract in April to help the Defense Department centralize military moves.
The award was quickly challenged by two firms that did not win the contract, HomeSafe Alliance LLC and Connected Global Solutions LLC, which filed a bid protest with the U.S. Government Accountability Office to review the award. In an unusual turn, Transportation Command alerted the GAO on June 9 it was going to look again at the award to ARC.
ARC said its business is completely separate from another firm owned by its same Norwegian-based parent company. The other subsidiary, Wallenius Wilhelmsen Logistics AS (WWL), was fined almost $100 million by the Justice Department in 2016 for price-fixing.
The military completes about 400,000 household moves a year of service members’ vehicles, furniture and clothing as they and their dependents are transferred from one base to another.
But military families have faced significant delays over the years in receiving their furniture and belongings, and have frequently complained about lost or damaged personal property. In 2019, more than 107,000 people signed a Change.org petition to demand that the Pentagon’s moving process be overhauled.
When the contract award to ARC was announced in April, Transportation Command, based at Scott Air Force Base near Belleville, Ill., said the new centralized approach would address “long-standing pain points DoD families have highlighted for years.”
After the award was challenged, Transportation Command decided to reconsider the contract.
“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,” Transportation Command spokesman David Dunn said in an email.
“After reevaluation due to corrective action, if ARC is the best value to the government, the stop work order will be lifted. If the best value is determined to be another offeror, a new contract award will be made to that offeror,” Dunn wrote.
In a statement, HomeSafe, one of the vendors who had filed the bid protest, said it “understands USTRANSCOM is re-evaluating this award and we expect our original proposal will be given favorable consideration as part of this process.”
If the award had not been halted by Transportation Command, the GAO would have had 100 days from the date the protest was filed to render a decision on whether or not the protest had merit.
In a statement, ARC said the fines to the other subsidiary for price-fixing may have played a role in the award being halted.
That subsidiary, Wallenius Wilhelmsen Logistics AS (WWL), also a Norwegian corporation, “conspired with other roll-on, roll-off ocean shipping lines from at least February 2000 until at least September 2012 to fix prices, rig bids, and allocate customers,” according to a 2016 Department of Justice announcement of the $98.9 million criminal fine.
Roll-on, roll-off cargo includes non-containerized cargo, such as cars.
A spokesman for ARC said the firm operates separately from WWL.
“As an entirely separate U.S. company with separate U.S. citizen management, ARC was not a party to the 2016 U.S. Department of Justice case involving Wallenius Wilhelmsen Logistics, a Norwegian company, and has never been accused of any anti-competitive or criminal activities. ARC was never owned or otherwise controlled by WWL,” said ARC spokesman Charles Diorio.
“It is unfortunate that well-documented facts relating to a 2016 agreement reached between WWL and the U.S. Department of Justice to settle allegations of anti-competitive behavior are being misinterpreted by parties with a vested interest to promulgate a false and misleading narrative about ARC,” Diorio said.
