Contract Bundling and the Monopoly That Makes It Harder for Soldiers to Move
Moving is a stressful experience. The DOD just hired American Roll-On Roll-Off Carrier Group as the moving monopoly.
|Matt Stoller||Mar 3||5||1|
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From a commenter:
It’s small potatoes (2 billion dollars / year) but DOD is in the final stages of outsourcing the program that handles the moves (PCS) for all service members from a number of SMEs to one large contractor whose parent company has been convicted multiple times of defrauding governments around the world.
The Federal News Network has been on this story. The Pentagon consolidated 900 moving firms it employs into one large contract, which it awarded to a firm called American Roll-On Roll-Off Carrier Group. That firm, however, looks real sketchy.
Among the objections to ARC was the $98.9 million payment made in 2016 by its parent company, Wallenius Wilhelmsen ASA (WWASA), to settle an investigation into the alleged anti-competitive conduct of its U.S. subsidiary, Wallenius Wilhelmsen Logistics AS (WWLAS), in the car carrying industry by the Justice Department (DOJ). WWASA also owns shipping companies in Norway and South Korea that were fined for rigging cargo bids and price-fixing. ARC maintains that it is unrelated to ASA.
A few lawmakers are concerned.
Two lawmakers have weighed in with their concerns about the recently awarded $7.2 billion contract to outsource the management of service members’ household goods moves.
U.S. Transportation Command’s “decision to accept a higher priced bid, from a subsidiary of a foreign-owned company with a questionable track record, is deeply troubling,” wrote Rep. David B. McKinley, R-W.Va., in an Aug. 4 letter to the leaders of the House Armed Services Committee. He urged the committee to conduct an investigation into TRANSCOM’s decision.
The American Federation of Government Employees is also opposed to this contract. The consolidation of these contracts into one giant monopoly award is something called “contract bundling,” spearheaded by Bill Clinton’s head of acquisition Steve Kelman in the 1990s. It was a disaster, and continues to be a disaster, and merely helped dominant firms work with government procurement officers to exclude competitors.