performance thresholds on the program: on-time pick
up, on-time delivery, loss and damage-free shipments,
how quickly they process loss and damage claims, the
availability of [information technology] systems and
small business contracting goals,” Lovell said.
Vying for the contracts are teams led by UPS, IBM,
Eagle Global Logistics Inc., C.H. Robinson and Ryder System, which includes team member Northrop Grumman.
Houston-based Eagle Global Logistics already ran a
pilot program in several southeastern states that served
as a partial model for the current DTCI program. The
pilot, which ran from 2000-2003, reportedly performed poorly and Transcom never issued a report on
the results. Some officials say problems arose due to
the pitfalls of an untested contracting approach.
The potential winner will face a broad geography
and an aggressive schedule. The first phase, or spiral,
of DTCI will start with 67 sites, which have to be fully
operational 25 months after the contract award.
Three phases within the first spiral will include 18
Defense Logistics Agency distribution centers, followed by co-located service sites and, finally, encompass sites and bases not co-located with DLA distribution centers. If the first spiral is successful, up to 260
sites will be added.
Meanwhile, the intermediaries have been fighting
unsuccessfully to have DTCI’s transportation contracts
separated from the logistics management so that they
are not — as they fear — shut out of the work.
“We are not opposed to outsourcing in any way, we are
just against the bundling of the management and the actual contracts,” said Robert Vollmann, president of the
Transportation Intermediaries Association (TIA).
According to Vollmann, hundreds of companies currently have
contracts with DoD.
“They are moving freight and
everybody is happy,” he said.
The 90 motor carriers and the
association filed a protest with the
GAO to overturn DTCI, arguing the
contract would limit future competition. But while GAO agreed that
competition could be limited, it
overturned the protest late last year,
citing the overall benefits of the
approach, such as cost savings.
“Our concern is that the military
put a system or process in place so
that our people can’t compete for this
business,” said Richard Gluck, a partner with law firm Garvey Schubert
Barer and TIA’s general counsel.
“That is not good for the government because it is going to lose the benefits of price competition and when they need surge capacity they are not
going to have it. It is not a good thing to be so heavily
reliant on one contractor and his subcontractor,” he said.
Moreover, the TIA coalition protested the DoD’s
decision to combine transportation and coordination
functions under DTCI. The coalition had unsuccessfully tried to convince Transcom to award the transportation contracts separately and not let the new
transportation coordinator have a say in the matter.
Congress, however, has instructed the oversight and
investigations arm of GAO to look into the program. A
report on the practice of contract bundling and the
engagement of small business was due Feb. 1, but at
press time sources said it may not be completed until
later this spring.
“They are doing a fairly thorough review,” said a knowledgeable source.
The intermediaries also hope that with a Democratic
Congress intent on oversight and investigations, they can
convince key committees to hold hearings on the program. To that end, the industry already has met with the
office of Rep. Henry Waxman, D-Calif., chairman of the
Government Reform Committee, as well as the House
and Senate Armed Services Committees.
The government has said there will be opportunities
for small- to medium-sized brokers. It also has said it
will ensure that the prime contractor keeps the contracting process open.
But Gluck expressed skepticism, adding, “We want
to keep their feet to the fire on that commitment.”
On the flipside, Lovell points to the many requirements contained in the contract’s performance work
Motor carriers and truck brokers who do business with the Department of
Defense view the Defense Transportation Coordination Initiative as a threat to
their livelihood since one commercial company will be chosen to lead the program.