GAO upholds Defense DepartmentÆs 3PL contract process
Competition among commercial logistics companies for a massive contract to manage the U.S. military's domestic surface freight transportation needs is back on track after the Government Accountability Office this week denied a protest by smaller trucking companies.
The congressional investigative agency, which resolves disputes over whether federal contracts were fairly or legally awarded, concluded that the Defense Department had complied with procurement laws in setting up the bidding process for the Defense Transportation Coordination Initiative (DTCI), according to a statement issued late Thursday by U.S. Transportation Command.
The protest was filed by 90 motor carriers and truck brokers, supported by the Transportation Intermediaries Association, who are upset that they could lose existing business with Defense agencies and depots. Under the DTCI, a five-year contract managing about $750 million in logistics spending covering the continental United States, the third-party logistics provider would be responsible for selecting and managing motor carrier subcontractors.
TIA members argue that the DoD should not bundle the management of transportation providers with the actual provision of transportation service in a single contract because it gives too much power to a single private entity. They have lobbied for a system in which a 3PL coordinates the activities of the existing contractor base.
The Defense Department said it needs to outsource its freight transportation to improve the efficiency of shipping materiel. Currently each Defense entity makes its own arrangements for shipping parts and supplies to thousands of end users without any centralized oversight that would allow for consolidation, optimized routes or volume discounts that could save the government millions of dollars.
GAO upholds Defense Department’s 3PL contract process
