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August 19, 2020 11:15 AM, EDT

Lawmakers Seek Investigation of Military Moving Contract Re-Award

CapitoSen. Shelley Moore Capito, one of the lawmakers who raised concerns, speaks at a past press conference. (Al Drago/Bloomberg News)

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Several members of Congress have written letters requesting further investigation into the award of a $7.2 billion Department of Defense contract to a company they claim lacks the experience to move an estimated 400,000 members of the military and their families and DOD employees across the globe each year.

The global household contract, awarded to American Roll-on Roll-off Carrier Group (ARC) in April, is intended to address military families’ long-standing problems with delays and damaged goods during moves to assignments, according to the U.S. Transportation Command.

However, in June, military officials pulled back the contract saying it was re-examining its award to ARC after two competitors protested the contract, which could be worth $20 billion if all the options on it are exercised over nine years, to the Government Accountability Office. The protests alleged, among other things, that ARC failed to disclose that its parent corporation pleaded guilty to fraud and antitrust violations, and that three of its owner’s executives were convicted of price fixing.

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Two weeks later, Transcom re-awarded the contract, saying that after checking ARC and its parent company, Wallenius Wilhelmsen ASA, they discovered ARC was not part of the 2016 conviction for Sherman Antitrust violations. “A separate company with a similar name, Wallenius Wilhelmsen Logistics AS, was convicted,” Transcom said.

An ARC spokesman told Transport Topics that although ARC is an American subsidiary of Wallenius Wilhelmsen ASA — a publicly listed company on the Oslo, Norway, stock exchange — its board of directors and management team are all U.S. citizens.

The spokesman said ARC was awarded the contract “because our proposal offered the best service for the best value for service members, DOD civilians and their families.”

However, three U.S. senators and one congressman are criticizing the military’s quick re-award decision.

They include:

  • Sen. Thom Tillis (R-N.C.), who wrote in an Aug. 3 letter to Ellen Lord, undersecretary of defense for acquisition and sustainment, “ARC has zero past experience or revenue streams in the military moving space.” He added, “Instead of fully vetting each allegation, Transcom deemed this a clerical error. Failure to accurately disclose ownership and a criminal history makes a bidder ineligible for the award.”
  • Sen. Shelley Moore Capito (R-W.Va.), who wrote in an Aug. 6 letter to Lord, “I am concerned that Transcom’s award to ARC will not result in necessary service enhancements for our nation’s military families and will disadvantage taxpayers. I encourage you to make sure that Transcom awards the Global Household Goods contract to a qualified entity that will improve service to our military families and comply with all application laws and regulations.”
  • Sen. Joe Manchin III (D-W.Va.), who wrote in an Aug. 10 letter to Lord that ARC’s bid was $2 million higher than its competitors and that he did not believe that just two weeks is enough time to complete a thorough investigation. Manchin also said he was concerned that ARC failed to disclose its ownership by a foreign company. “While Transcom considered this to be a clerical error, the failure to disclose accurate ownership and criminal history should have immediately made ARC ineligible for the award,” Manchin wrote.
  • Rep. David McKinley (R-W.Va.), who in an Aug. 4 letter urged the House Armed Services Committee leadership to conduct an independent investigation into Transcom’s decision on the ARC contract. “Considering the significance of this contract to our national security, an independent investigation is imperative,” McKinley wrote.

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