Pentagon Says Cost Savings Worth Car Shipping Headaches

Despite lost cars and months of transportation worries for service members, changing to a new contractor to ship troops' cars to and from overseas duty stations was worth it thanks to the money saved in the switch, Defense Department officials said yesterday.

The new contract, which saves the Defense Department $50 million a year, is the "best value solution for the federal government," according to a release from U.S. Transportation Command, which manages the contract.

The value was highlighted by the behavior of the previous contractor after the new award decision, American Auto Logistics (AAL), officials said. Rather than provide a smooth transition, it filed a series of legal protests that delayed the start of the contract.

"This peak season was hampered significantly when legal actions interrupted the planned transition between contractors," said Gail Jorgenson, director of acquisition for TRANSCOM, in a statement released Sept. 22. "But in the long run, TRANSCOM and International Auto Logistics (IAL) are committed to service members, and committed to getting things right."

IAL took over the shipping contract May 1, five months later than planned thanks to the legal battle. When contract protests failed, representatives of AAL in early April began sending emails to members of the press, berating IAL's pending takeover.

TRANSCOM officials said it was exactly that behavior that caused the shipping problem to start. Original contract plans called for IAL to take over the system in early December of last year -- plenty of time to work out any kinks before peak moving season, officials said. Instead, thanks to contract appeals and a lawsuit, IAL's takeover was delayed until the start of the busiest car shipping season in recent memory.

"IAL began work on the new contract May 1 when the last extension with AAL ran out. AAL refused TRANSCOM's request to continue shipping vehicles an additional two weeks," TRANSCOM officials said in a release. "This curtailed efforts to conduct a smooth transition for the new contractor and government personnel."

New TRANSCOM figures show IAL is now delivering twice as many vehicles per week as it had a month ago, officials said. Additionally, more vehicles are currently being delivered than are entering the system.

Officials reported last month that 70 percent of the nearly 27,500 vehicles shipped since May 1 were delivered after their arrival deadlines. A random August sampling showed only 5 percent of those cars were late, TRANSCOM officials said early this month, but cautioned that the improvement applies only to vehicles shipped after Aug. 1.

In addition to the cost savings, the new contract adds protections for service members that the previous one did not include. For example, the current contract makes IAL responsible for all damage or delays caused by ocean carriers, formerly capped at $500, and when shipped by land, formerly capped at $20,000.

Officials with AAL said that despite the savings and changes, their proposal was better.

"We are extremely disappointed with TRANSCOM's latest response to the current debacle with the GPCIII contract," said Liz Poston, an AAL spokesperson. "We remain firm in the belief that the proposal we offered to USTRANSCOM provided the best value to the government and service members based on our extensive experience and track record. TRANSCOM made a choice to change contractors, determining that the new contractor was capable of performing. We believe it was the wrong choice, for reasons that are obvious today, and have exercised legal remedies available to us to challenge the award to a clearly unprepared and ineffective contractor."

Members of a Facebook page dedicated to circulating crowd-sourced information about IAL and troops' lost vehicles said their shipping problems and missing cars can be blamed on the Defense Department's cost savings.

"You get what you pay for," said commenter and Army wife Sarah Ann Soldat, who recently moved from Germany to Fort Sill, Oklahoma. "They say this is saving so much money and this nonsense about increased services and more responsibility on the company, but AAL did a better job and did not cause half the grief or inconvenience to service members. It's easy to sit up on that hill and make these comments when they will never have this experience."

-- Amy Bushatz can be reached at Amy.Bushatz@monster.com.