Members Request Investigation of Multibillion Dollar Pentagon Contract

August 5, 2020 by Reece Nations
The number of known military installations with water sources contaminated by cancer-linked firefighting foam is likely to rise, Pentagon officials said Wednesday, Nov. 20, 2019. (Dreamstime/TNS)

WASHINGTON – Two members of Congress have penned letters requesting a probe into the Pentagon’s decision to grant a multibillion dollar moving contract to American Roll-On Roll-Off Carrier Group Inc.

The three-year, $7.2 billion contract would privately outsource the management of service members’ household goods, according to Marine Corps Times. If all options on the contract are exercised, the contract could be worth as much as $20 billion over nine years.

Sen. Thom Tillis, R-N.C., and Rep. David McKinley, R-W.Va., submitted letters questioning the Pentagon’s decisions to Under Secretary of Defense for Acquisition and Sustainment Ellen Lord, and the House Armed Services Committee, respectively.

The initial contract was originally awarded to ARC April 30. However, two companies who lost their bids for the contract filed complaints with the Government Accountability Office in May.

The companies’ protests centered around ARC’s failure to disclose its Norwegian parent company with a criminal history and the fact that the bid’s price tag was $2 billion higher than other qualified proposals. ARC is the American subsidiary of Wallenius Wilhelmsen Group, whose other subsidiaries pleaded guilty to price-fixing in the U.S. and “criminal cartel conduct” in Australia.

“Failure to accurately disclose corporate ownership or criminal history on the official U.S. government websites should automatically render a bidder as ineligible for the award,” the text of McKinley’s letter read. “Further, trusting a company with a checkered history to handle the valuables of our service men and women is irresponsible. Considering the significance of this contract to our national security, an independent investigation is imperative.”

DoD officials reconsidered the department’s decision at first, but eventually re-awarded the contract to ARC after a review by the U.S. Transportation Command determined a clerical error was the reason for misidentifying the group’s parent company.

TRANSCOM concluded ARC mistakenly designated sibling-company Wallenius Wilhelmsen Logistics, instead of Wallenius Wilhelmsen ASA, as its parent company in its filings.

“The Department of Justice confirmed ARC and its parent company, Wallenius Wilhelmsen ASA, were not part of the 2016 conviction for Sherman Anti-Trust violations,” TRANSCOM said in a statement. “A separate company with a similar name, Wallenius Wilhelmsen Logistics AS, was convicted.”

TRANSCOM’s ruling failed to account for the discrepancy between the cost of ARC’s contract and competing bids from other companies, Tillis’ letter noted. Additionally, Tillis contended that the contract lacked any “consideration for broader improvements to the household moving system.”

Further, Tillis asserted in his letter, ARC has no prior experience or streams of revenue in the military moving market. As a result of the move to re-award the contract to ARC, a 30-day deadline for justification from TRANSCOM to the GAO has been triggered.

HomeSafe CEO Al Thompson said in a statement, “We are confident GAO will agree that errors have been made on a major contract that touches every member of the armed forces and their families.” 

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