After Protest, DoD Upholds $7.2 Billion Military Moves Contract to New Jersey Company

Patricia Kime

US. Transportation Command has upheld a decision to award a $7.2 billion military household goods shipping contract to Parsippany, N.J.-based American Roll-On Roll-Off Carrier Group, Inc., and its partners.

TRANSCOM officials said Monday that allegations made in a bid protest filed after the contract was awarded April 30 were not substantiated. The award to the company, also known as ARC, was confirmed Monday.

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"Protests are a common part of the acquisition process and serve as an important check and balance," TRANSCOM officials said in a statement.

The contract was pulled back for review on June 9 after at least one of the companies that was not selected alleged that ARC had not been forthcoming in its bid. Specifically, the protest stated ARC has not been transparent about its ownership or the executives that run its parent company, Wallenius Wilhelmsen Group.

TRANSCOM agreed to review the allegations in a process known as "corrective action."

ARC is the U.S. subsidiary of a Norwegian company Wallenius Wilhelmsen, which also owns two other shipping companies -- one in Norway and one in South Korea -- that have been fined for price-fixing and rigging international cargo bids.

But ARC, which has held U.S. government contracts for more than 30 years and shipped thousands of pounds of military cargo, service members' household goods and privately owned vehicles, has "never been accused of any anti-competitive or criminal activities," a company spokesman told Military.com earlier this month.

After investigating the allegations, a government contracting officer concluded that they had no basis, according to TRANSCOM.

"Over the course of the following week, the contracting officer and legal counsel reviewed the response and other relevant information. After a thorough review of all relevant information, the contracting officer made an independent determination that the allegations were unsubstantiated," said U.S. Transportation Command officials in a statement.

The contract will shift management of all of the military's worldwide household goods shipments to ARC by 2022, beginning with a nine-month transfer of information technology systems and other administrative processes.

The contract had already been delayed at least 100 days as the GAO worked to review contract protests filed late last month by two companies that had lost the award, Home Safe Alliance LLC and Connected Global Solutions LLC.

When the TRANSCOM pulled the contract award, ARC remained confident that they would prevail.

"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," wrote ARC spokesman Charles Diorio on the company's website May 28.

On Monday, ARC executives said the company is ready to work.

“Team ARC remains committed to our proposal to provide exceptional customer service to TRANSCOM and the service members,” ARC Chief Executive Officer Eric Ebeling said. “We look forward to getting started on [the Global Household Goods Contract].”

The contract award is the first time the Pentagon has outsourced household goods and delivery system management.

The Department of Defense moved to contract out the services following a tumultuous 2018 summer moving season, which resulted in 10% of military families reporting loss, breakage or other issues with their moves.

While TRANSCOM instituted a number of initiatives to improve the military moving process, ultimately DoD decided to privatize the effort.

TRANSCOM officials said the contract will "improve access to -- and management of -- quality capacity to meet peak demand and enable the Department to affix the accountability and responsibility lacking in today's program."

The company that made the allegations did not respond to a request for comment.

The Government Accountability Office on June 16, 2020, approved TRANSCOM’s request to review the allegations, which resulted in the dismissal of protests filed against the original contract award.

-- Patricia Kime can be reached at Patricia.Kime@Monster.com. Follow her on Twitter @patriciakime.

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