[Federal Register Volume 61, Number 65 (Wednesday, April 3, 1996)]
[Notices]
[Pages 14747-14760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-8093]
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DEPARTMENT OF DEFENSE
Department of the Army
Reengineering the Personal Property Program--Synopsis of Comments
Received
AGENCY: Military Traffic Management Command (MTMC), DOD.
ACTION: Notice.
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SUMMARY: As part of the reengineering of the Department of Defense
(DOD) personal property program on June 30, 1995, MTMC released the
draft requirements document over MTMC's EasyLink Bulletin Board. The
initial draft of the requirements document outlined the anticipated
requirements to participate in the movement of personal property under
MTMC's reengineered concept. More importantly, the initial draft of the
requirements document was provided with the intent to give industry the
opportunity to comment on the feasibility of the proposal. A request
for comments from industry concerning the draft requirements document
was published in the Federal Register, Thursday, July 13, 1995, Vol 60,
No. 134. In conjunction with the draft requirements document, MTMC
released on August 1, 1995, the proposed acquisition strategy over the
EasyLink Bulletin Board. In the proposed acquisition strategy, MTMC
informed industry that we were considering the use of the Federal
Acquisition Regulation (FAR) to procure services for the movement of
personal property.
An additional request for industry's comments, this time concerning
the proposed acquisition strategy, was published in the Federal
Register, Thursday, August 10, 1995, Vol 60, No. 154. In this Federal
Register notice, we requested industry consider the draft requirement
document and proposed acquisition strategy as one package, and that
comments be provided to MTMC by September 20, 1995.
ADDRESSES: Headquarters, Military Traffic Management Command, ATTN:
MTOP-Q, 5611 Columbia Pike, Falls Church, Virginia 22041-5050.
FOR FURTHER INFORMATION CONTACT:
Mr. Lee Strong or Shelly Johnson, MTOP-Q, (703) 681-6393.
SUPPLEMENTARY INFORMATION: As a result of the Federal Register requests
for comments, MTMC received 297 letters from industry. The 297 letters
included 102 individual letters, 152 National Moving and Storage
Association endorsement letters, and 43 Washington Movers Conference
endorsement letters. The following provides a summary of many of the
questions posed by industry concerning the draft requirements document
and proposed acquisition strategy, as well as, MTMC's current position
regarding these industry questions.
Summary of Industry Comments Concerning the Draft Requirements
Document and Proposed Acquisition Strategy
In response to a request for comments concerning MTMC's
reengineering draft requirements document and proposed acquisition
strategy, we received 297 letters, including 102 individual letters,
152 National Moving and Storage Association endorsement letters, and 43
Washington Movers Conference endorsement letters. The following
summarizes and consolidates the questions posed in those letters and
provides a MTMC response.
Comments Regarding the Acquisition Strategy
(1) Industry: The use of proposed FAR to award contracts for
personal property movements is unacceptable and will adversely impact
the DOD Personal Property Program by imposing detailed, complex, and
burdensome regulations, including the provisions of the Service
Contract Act and Small Business Act. The use of the FAR is more onerous
and complex than the current system and fails to achieve the stated
goal of simplification.
Response: The Federal Acquisition Regulation (FAR) is an instrument
the Federal Government routinely utilizes to acquire and administer the
vast majority of its contracts for goods and services. It may be as
simple or as complex as the requirement being procured. It may require
minimal to detailed documentation depending upon the requirement and
the dollar threshold involved. Currently the FAR is geared toward
streamlining the acquisition process as much as possible while
maintaining the proper expenditure of public funds. The language in the
FAR is to the mutual benefit of private industry and the Federal
Government. The Service Contract Act (SCA) requirements are
administered and implemented by the Department of Labor (DOL). The FAR
simply implements the procedures and regulations published by DOL.
While compliance with the SCA provisions may require changes in carrier
business practices, these changes are not insurmountable. Likewise, the
FAR implementation of the Small Business Act, where applicable, will
not necessarily make the acquisition process unduly burdensome. While
many members of the industry may not be familiar with these provisions,
we are confident that this industry has the capability to learn, adjust
and master new procedures just as it has done in the past when we made
changes to the current program. MTMC is available to assist industry in
understanding these provisons.
(2) Industry: The ongoing regulatory requirements of the Service
Contract Act (SCA) would impose a significant burden and subject
industry to varying interpretations, continuous review of the contract
award procedures, and significantly increase costs due to mandatory
wage levels. The burden of imposing wage determinations and benefit
guidelines on full-service worldwide moves will fall directly upon the
small businesses, the agents and owner operators who actually perform
the services for the member. The detailed accounting infrastructure
does not exist to handle such a complex process.
Response: The Service Contract Act (SCA) does not require a
detailed accounting system, nor does it require continuous review of
the contract award procedures. MTMC intends to work with the Department
of Labor to attempt to lessen the impact on the industry, as
[[Page 14748]]
much as possible. Again, while compliance with the SCA provisions may
require changes in carrier business practices, carriers will be able to
factor into their rates any increased costs in the operations caused by
their compliance with the SCA. Once established, the specific burdens/
interpretations imposed by the SCA will have to be addressed between
the industry and the Department of Labor.
(3) Industry: The provisions of the Small Business Act mandate
maximum business opportunity for small and small disadvantaged
businesses. In addition, large businesses with annual gross receipts of
$18.5 million, or more, must submit a subcontracting plan outlining the
minimum goals for subcontracting and specifying how the plan will be
executed. These requirements are an administrative burden, and are
difficult to understand and enforce. Small businesses have an equal
opportunity to compete in the current program and the requirements of
the FAR will prevent them from competing in the new program.
Response: The FAR does not prevent small and small disadvantaged
business from bidding/proposing on any requirement that has full and
open competition. Small businesses will be given an equal opportunity
to compete among small businesses and among their larger competitors.
The provisions of the Act apply to both the current program and the
proposed reengineered program. The broad policies of the Act are to
ensure that a fair proportion of acquisitions are placed with small
business concerns and small disadvantaged business concerns. The FAR
regulations implement this policy. The regulations will not prevent
competition by these concerns. Rather, the regulations promote
competition by mandating that such concerns have the maximum
practicable opportunity to compete. For information on how to submit a
subcontracting plan, which is only applicable to large businesses for
awards over a certain threshold, it is recommended that companies
review the guidance in FAR Subpart 19.7. It is apparent that many of
the large firms currently have an operating procedure with many small
businesses; therefore, they should review actions that they currently
have in place to determine whether they would satisfy the requirement.
The FAR approach may be more or less labor intensive depending upon the
type of solicitation and the type of contract awarded. Part of its
advantage, however, is that it is a competitive process for the award
of contracts which allows technical and price factors to be considered;
it is not simply a system for filing rates.
(4) Industry: The FAR is a very complex bidding process and
requires a very large amount of work for potential contractors who wish
to bid on the program. The decision to file rates from each area of
responsibility to each rate area will result in 17,425 contract awards.
If 50 carriers should file rates for all channels, MTMC would be
required to evaluate 871,250 offers. Under the current program, all
rates are submitted electronically and require only a few number of
personnel to manage the process. The FAR evaluation process is labor
intensive and will not reduce the manpower required to administer and
manage the program.
Response: MTMC agrees that awarding a best value FAR contract under
the Area of Responsibility (AOR) to rate area/channel concept would be
labor intensive and difficult to administer because of the large number
of potential offers and awards to be evaluated and administered.
Although a low cost FAR-exempt concept would provide simplicity in
administration, we believe FAR contracts, which are awarded based on
price and non price factors and which would allow the contracting
officer to exercise business judgment in selecting an awardee, would
result in an overall better value to the Government than the present
distribution scheme which awards to the carrier with the low rate.
Since quality of service is a major goal in the reengineering effort,
MTMC has been considering alternatives which allow us to achieve
greater value while being administratively manageable.
Consequently, MTMC is considering an approach which encompasses six
origin regions which include four CONUS and two OCONUS regions. We
anticipate the four CONUS regions being divided into the states within
the four Regional Storage Management Offices (RSMO) areas currently in
existence. The two OCONUS regions would be divided into countries under
the current responsibility of the Military Traffic Management Command,
Europe and the Military Traffic Management Command, Pacific. We
envision three categories of service out of each origin region and
contractors may choose to bid as follows:
CONUS Origin Regions
a. Intra-Region Destination. Contractor must provide service from
all areas of responsibility (AOR) of personal property shipping offices
(PPSOs) located within a region to all AORs located within states in
that same region. (Example: The Atlanta Region encompasses North
Carolina, South Carolina, Kentucky, Tennessee, Mississippi, Alabama,
Georgia, and Florida. The contractor must provide service from North
Carolina to any other state within the Atlanta Region.) Locals and
intra-state moves will not be included for the pilot acquisition.
b. Inter-CONUS Destination. Contractor must provide service from
all AORs of PPSOs located within a region to all AORs located within
states outside that region. (Example: From Atlanta Region to
California, Kansas, New Jersey, etc.)
c. OCONUS Destination. Contractor must provide service from all
AORs or PPSOs located within a CONUS region to all OCONUS AORs.
(Example: From Atlanta Region to Germany, Japan, Italy, etc.)
OCONUS Origin Regions
(Moves originating from these regions will not be included in the
pilot acquisition.)
a. Intra-Region Destination. Contractor must provide service from
all AORs of PPSOs located within a region to AORs located within
countries in that same region. (Example: From MTMCEUR Region (Germany)
to United Kingdom, Italy, Turkey, etc.)
b. Inter-OCONUS Destination. Contractor must provide service from
all AORs of PPSOs located within a region to all AORs located within
countries outside that region. (Example: From MTMCEUR Region (Germany)
to Japan, Korea, Hawaii, etc.)
CONUS Destination. Contractor must provide service from all AORs
of PPSOs located within a OCONUS region to all CONUS AORs. (Example:
From MTMCEUR Region (Germany) to South Carolina, California, New
Jersey, etc.)
We anticipate making multiple awards on DOD's needs and the
contractor's capacity set out in responsive proposals. In addition, we
envision awarding an indefinite delivery/indefinite quantity (IDIQ)
fixed price contract for one (1) year, with four (4) priced one (1)
year option periods. The contract will specify the minimum tonnage the
contractor is guaranteed for the base period and the maximum tonnage
the contractor is obligated to move during each year of performance and
for the life of the contract. Further, the contractor will specify his
maximum daily tonnage capacity for each installation within the region.
Contractors may be authorized to submit a separate daily maximum
for peak season. The maximum daily tonnage capacities will be a
negotiable element in determining contract awards.
[[Page 14749]]
A contractor may choose to submit a proposal for any or all of the
categories of service. Each awardee is obligated to provide service
from all areas of responsibility of PPSOs located within a region to
all destination AORs encompassed within each category of service.
(5) Industry: MTMC's repeated statements indicate the technical
area elements of an offeror's proposal will have priority over cost. It
is very difficult for those who have been in business with the military
for any length of time to believe cost will not be the primary factor.
This element of the reengineering proposal is critical to providing
premium services for the military customer.
Response: One of the main differences between the current personal
property program and the reengineered concept, is that the current
program awards traffic to the low rate carrier. The reengineered
concept, on the other hand, will emphasize the selection of carriers
that provide quality service, even if this results in the payment of
commensurably higher rates. Thus, the reengineered source selection
process will place weight on the carriers' capability to provide
quality service and not just focus on low rates. The relative
importance of the technical factors the Government will evaluate during
the source selection process will be specifically stated in the
solicitation.
(6) Industry: Technical issues can only be evaluated subjectively.
Awards based on subjective evaluation factors and the offerors writing
ability rather than the carriers ability to competitively meet MTMC's
established service requirements will result in litigation.
Response: We are aware that changing the present system may result
in litigation. However, if we adopt a FAR-based system, we plan to
develop a streamlined acquisition process that will help us achieve two
main objectives: facilitate the source selection process for both the
carriers and MTMC, and minimize the potential for litigation. We plan
to develop a source selection process which de-emphasizes proposal
writing skills and emphasizes the contractors' capability and past
performance. Again, if we adopt the FAR-based approach, we will seek
industry assistance with the draft solicitation and the streamlined
acquisition method.
(7) Industry: Industry is not familiar with the terms, conditions,
and requirements of the FAR. This will lead to inconsistent
interpretations, appeals and protests.
Response: Industry has indicted repeatedly that it understands the
terms and conditions of the services we want to procure. Additionally,
industry has indicated that it can provide most of the required
services under the current program. The main difference lies on the
source selection methods and standardized clauses which the FAR
provides. Thus, whether we procure those services using the FAR, or
using FAR-exempt procedures, does not appear to increase the potential
for inconsistent service. The statement of work will be essentially the
same under either method. With regard to appeals and protests, please
note that the right to appeal or protest procurement decisions is based
on statute, not the FAR. If the FAR is chosen, MTMC is dedicated to
work with industry in facilitating the transition to a FAR-based system
and, together, avoid any conditions which may lead to unnecessary
appeals or protests.
(8) Industry: A FAR based contract has indefinite and various terms
and conditions which are subject to legislative change and new
interpretations by parties with no knowledge of the moving industry.
This will adversely impact the ability of the contractor to comply and
provide the services required.
Response: No government contract, be it FAR or FAR-exempt, has
``indefinite and variable terms and conditions.'' The FAR contains
rules, terms, and conditions which generally govern the formation and
administration of government contracts. The work requirements are
established by the requiring activity and are set forth in the
contract. While the FAR is often revised to implement new ideas, court
decisions and legislative changes, those changes are always
prospectively applied. In those unusual cases where a contract needs to
be modified to implement a new court decision or statute, the
contractor is compensated for any increased cost of performance.
(9) Industry: Subcontracting requires discussions prior to bid
submission between the parties involved. These discussions will involve
the exchange of price information, as well as consideration of whether
a potential bidder will agree not to submit its own independent bid.
This raises serious anti-trust implications. The moving industry has in
the past been subject to Justice Department grand jury investigations
and threatened indictments on the basis of alleged joint actions by
bidders and agents in connection with the submission of bids on
military traffic.
Response: Carriers concerned about whether their discussions
regarding potential subcontracting arrangements with other carriers or
contractors might have antitrust implications should consult their
legal counsel. Hundreds of contractors in other industries routinely
enter into subcontracting arrangements without violating antitrust
laws. We are unaware of any statutory provision which would prevent the
household goods industry from entering into similar subcontracting or
other types of teaming arrangements. Please refer to FAR Subpart 9.6
for the Federal Government's policy on teaming arrangements and joint
ventures.
(10) Industry: Subcontracting is developed based on business
relationships and established on the basis of mutual integrity and
reputation for performance and prompt payment. In addition,
subcontractors will have no protection against slow payment or
nonpayment by the Government selected contractor.
Response: Any acquisition concept we adopt will place significant
emphasis on past performance. This will include the contractor's
financial performance. Since a carrier's failure to comply with its
financial obligations to its subcontractors is likely to negatively
impact its performance, we anticipate that the carrier receiving awards
under such a reengineered proposal will be motivated to maintain
excellent working relationships with its subcontractors. As far as
protection against slow payment, or nonpayment by a Government selected
contractor, we believe that this responsibility rests with industry. As
a general rule, the Government's obligation is to the prime contractor.
It is the responsibility of subcontractors to assure that they are
involved in a business relationship with a reliable and responsible
prime contractor. The same holds true for the prime contractor.
(11) Industry: MTMC's concept of contractors and subcontractors
will put the agent/van line relationship seriously at risk. No large
van line, with appointed and dependent and financially supported
agents, will make its resources available to those agents working as
subcontractors for a competing van line, on a contract that the carrier
itself bid on and lost.
Response: The objectives of the reengineering process include the
design of a procurement process that maximizes competition, selects
quality carriers, and is administratively manageable for MTMC and the
PPSOs. We recognize that any acquisition method we adopt which
satisfies these objectives may require some modification of industry's
current business practices. We do not wish to dictate what specific
changes the carrier industry should make to its business
[[Page 14750]]
practices. We trust that the household goods industry has the
capability to make those business decisions independently. Hundreds of
other government contractors have been able to adjust to changing
market conditions. The freight industry, for example, is successfully
adjusting to deregulation. We are confident that those household goods
carriers that are committed to providing quality transportation
services to DOD at competitive rates will find ways to successfully
compete for these contracts.
(12) Industry: Large van lines have the resources to provide the
services required and can satisfy the subcontracting requirements
within their own system of agents and owner operators without utilizing
the services of other carriers and agents. Capacity will only be an
issue during peak period of times. Many smaller carriers or agents will
not be able to survive on peak business alone. As a result, the agent
infrastructure will be severely damaged. Warehouse and van capacity
will be reduced resulting in serious deterioration of service and
competition on subsequent bids will be significantly reduced since many
unsuccessful bidders, who have been deprived military shipments will go
out of business. Service quality will ultimately deteriorate.
Response: If we adopt a FAR-based approach we anticipate making
multiple awards. The decision on how many awards we need to make will
depend on the minimum transportation needs of DOD shippers and the
capacity of the competing carriers. The solicitation will provide data
showing DOD's minimum transportation needs for each performance period,
including peak periods. It is possible that some carriers will base
their capacity on the agent infrastructure they already have in place.
Others may choose to expand their capacity by entering into additional
subcontracting arrangements. Carriers will retain absolute discretion
on how they wish to structure their proposals for these requirements.
At this point, it would be speculative to assert with a high degree of
certainty the potential impact the reengineered acquisition will have
on the agents infrastructure, as well as warehouse and van capacity. We
anticipate that the pilot acquisition we plan to conduct will provide
factual information about the potential impact of the reengineered
concept on the industry's infrastructure.
(13) Industry: The FAR contains many stringent reporting
requirements. These reports may be required simply because the contract
is subject to the terms and conditions of the FAR.
Response: The only known reporting requirement required by the FAR
relates to subcontracting and is only required of large businesses. The
report reflects the contractor's progress on meeting his/her
subcontracting goals as proposed and incorporated into any resultant
contracts. Any other required reports will not result from the FAR, but
will be generated as a requirement under the particular contract for
purposes of providing specific management information to the
Government.
(14) Industry: The FAR contains strict penalty provisions for
contractors that are not able to meet all of the terms of the contract.
Given the lack of familiarity with the detailed requirements of the
FAR, the number of violations can be expected to be very high and the
amount of potential penalties could be crippling to the entire
industry. There is no need for these penalties because they only serve
to enforce meaningless and unnecessary rules. This requirement is
another reason to exempt this contract from the FAR.
Response: The FAR provides guidance to Federal agencies on how to
conduct its acquisition. It provides standardized clauses which Federal
agencies must use for certain types of acquisition. It does not contain
penalties; rather, it outlines remedies available to both contractors
and government agencies in place of contract changes or disputes. These
remedies are incorporated into the contract through standardized
contract clauses. See FAR Subpart 33.2, for guidance on disputes and
appeals, and FAR Part 43, for guidance on contract modifications.
Contractors are only required to comply with the terms and conditions
of the contract. These terms and conditions initially are stated in the
request for proposals. Thus, carriers will know, even before they
submit a bid in response to the request for proposals (RFP), the terms
and conditions of the proposed acquisition. Those carriers that believe
they cannot comply with the terms of the RFP has essentially two
options. First, they can inform the procuring agency of the fact which
in their opinion prevent them from complying with the requirements, and
request the agency to amend the RFP. Second, carriers can enter into
teaming or joint venture agreements with other companies in order to
enhance their capability to perform the requirements. Of course, while
we understand this is not a desirable option, a carrier can always
choose not to bid. Finally, it should be noted that, like any other
private citizen, contractors also have to comply with Federal statutes.
Most of these statutes would apply regardless of whether we are dealing
with FAR or FAR-exempt contracts.
(15) Industry: The FAR contains provisions regarding default terms
and conditions. It also stipulates procedures regarding contractor
liability for procurement costs. The clauses pertaining to default are
not mandatory and the reasonableness of these terms should be dependent
upon the type of contract awarded. Specific information is required
regarding default provisions and punitive actions.
Response: The use of contract termination clauses for convenience
and default are mandated as specified in FAR Subpart 49.5. The
standardized clauses to be used are listed in that subpart. General
guidance regarding the policies and procedures for the complete or
partial termination of contracts is provided in FAR Part 49. We will be
glad to answer any specific questions industry may have about these
clauses. The specific clauses applicable to any contract will be
included in its appropriate RFP.
(16) Industry: All of MTMC's service requirements, with a single
exception (full replacement liability), can be achieved by modifying
the current program and without incurring the problems resulting from
the proposed ``winner take all'' FAR contract concept. The draft
Requirements Package and Acquisition Strategy reveals a program that is
far more bureaucratic and complex than the existing program and it
contradicts standard commercial business practices in most aspects.
Response: One of the primary reengineering goals it to move away
from the current rate driven system, to one that encompasses a quality/
greater value approach. MTMC has discovered several factors that argue
decisively against merely modifying the current program. First, the
existing system itself is a product of the process of making many
isolated changes without considering the total impact. It seems
inappropriate to fix a program by the same process that brought it to
its present form. Additionally, it is often difficult to adjust single
elements of the program because of vested interests and the
interconnected nature of various provisions. Frequently, good ideas are
lost in the negotiation or compromise process. Also, achieving a system
that awards traffic on other than cow cost cannot be attained by
modifying the existing program. The FAR provides an established and
proven procurement method to achieve the desired approach. In addition,
MTMC is considering a multiple award regional approach in place of the
``winner take all'' concept.
[[Page 14751]]
Thus, there will be adequate opportunities for several contractors to
receive contract distribution system and ``me-too'' bidding, on the
other hand, effectively emasculates the benefits that competition can
provide.
Comments Regarding the Draft Requirements Document; Industry
Comments and MTMC Responses are Keyed to the Paragraph Number of
the Requirement Document
1. Requirements
1.1 Channel Concept
(17) Industry: Commercial accounts are national, not regional or
point-to-point in scope. The moving industry, even at its inception,
was concerned about return loads. Trucks must be kept filled and this
cannot be done in a point-to-point environment, especially if it is not
known who will be awarded the contract from the other end. Not knowing
which routes will be awarded to an offeror further complicates the
bidding strategy. A traffic lane concept will minimize the opportunity
to fully utilize equipment and will increase costs.
Response: MTMC agrees the majority of commercial accounts are
national in scope; however, due to significant concerns from industry
regarding a national/worldwide approach and the effect it might have on
small and medium carriers, local moving and storage companies, and
freight forwarders, the approach was changed. MTMC considered awarding
traffic on a ``winner take all'' basis out of an area of responsibility
(AOR) to a rate area. It became clear through industry comments and
MTMC's analysis that the channel approach created many administrative
complexities. Consequently, MTMC is considering use of a regional
approach with multiple awards. The proposed regional concept provides
an opportunity for all carriers, local agents, and freight forwarders
to submit offers. Subcontracting provides an opportunity for carriers
to participate in those channels in which they were not awarded
contracts.
(18) Industry: The proposed traffic channel concept is no different
than those in use today. This concept offers no program simplification
for MTMC or industry.
Response: MTMC agrees. Analysis of the AOR/channel concept
confirmed this approach would not simplify the program for the
Government or industry. We feel the regional approach will simplify
evaluation, execution and administration.
1.1 Winner Take All
(19) Industry: The ``winner take all'' approach will have a
devastating impact on small corporations within the industry. It would
create a monopoly of large van lines, thus forcing small carriers,
agents, and forwarders out of business.
Response: The regional/multiple award concept should eliminate
concerns regarding ``winner take all.''
(20) Industry: No one carrier or any one agent in a military market
is able or willing to provide for 100 percent of all traffic in any
given channel. Every year during peak season there are problems
somewhere in the country acquiring the necessary capacity. It should be
abundantly clear from this that no one contractor is capable of
handling all of the shipments, whether worldwide, at an installation,
or in a single traffic channel. The volume is too large.
Response: Concerns over available capacity during peak season was
an important factor for MTMC in deciding upon multiple award options.
Multiple awards, in conjunction with contractor stated maximum daily
capacity and PPSO discretion in awarding traffic, will ensure
sufficient capability for movement requirements.
2.1 Expansion Capability
2.1.1
(21) Industry: A carrier and its agent cannot be expected to
maintain additional capacity and personnel to cover seasonal surges
which may or may not materialize. Steps should be taken to minimize
such surges by encouraging movements during the winter months.
Additionally, no prudent bidder can provide a viable rate without
knowing the parameters of the daily workload requirement. The
Government's estimated daily requirements and minimum acceptable daily
requirements must be provided for each channel.
Response: One of the ways that a contractor can expand capacity
during seasonal surges is through an effective subcontracting plan. The
revised concept allows for the contractor to specify their maximum
daily capacity. In addition, we are considering separate daily maximums
for peak season movement requirements. Multiple awards and
subcontracting will ensure the capability is available to support
seasonal surges. Contractor established daily maximums and the right of
refusal once daily maximums have been met, afford the contractor an
opportunity to effectively manage his/her company's operations.
Although MTMC and the services would like to see the volume of moves
evened out over the entire year, realistically there is not much that
can be done to accomplish this. Often, even when military members with
families are ordered to a new duty station during the winter months,
the spouse and children will stay behind until the school year is
completed. Although the DOD can control when a service member must
report for a new duty assignment, we can not mandate when he/she
chooses to move household goods and family. Just like the commercial
world, a move is a quality of life issue and most people with families
prefer to move in the summer to minimize the adverse impact on their
children's education.
(22) Industry: The Contractor should be compensated overtime labor
charges when services are requested and performed during other than
normal working hours. It is not realistic to require the contractor to
extend work hours without any additional compensation. The provisions
of the Service Contract Act would require the contractor to pay its
employees overtime wages and the Government should like be willing to
pay the contractor.
Response: Since confirmed pack, pickup, and delivery dates are
established between the contractor and customer, MTMC does not envision
the payment of overtime charges as a separate charge item. We would
expect contractors to factor anticipated costs into their rates.
(23) Industry: The expansion capability requirement is restrictive
on small business. The alternative to the unlimited expansion
capability requirements is to use the FAR-exempt tender system of
procurement. It has agent and carrier expansion capability built in by
using the Me-Too rate filing system. The available capability provided
by the Me-Too carriers will not be available under the FAR contract
concept.
Response: MTMC wants to move from the current rate driven system,
to one that considers the value of services provided. Although price
will continue to be one of the factors evaluated, it will not be the
driving factor in determining which proposal is awarded the traffic.
The Government will make cost-technical tradeoffs, and determine which
proposal offers greatest value based on sound business judgment and the
evaluation criteria stated in the solicitation. The current Me-Too rate
filing system does not lend itself to an approach that evaluates
factors other than cost. Although it allows for a carrier to match or
Me-Too the rate of the low cost carrier, it does not provide a vehicle
for the carrier to match the other factors encompassed in an
[[Page 14752]]
evaluated procurement. Therefore, under Me-Toos, the rate becomes the
driving factor once again. The alternative for expansion capability, is
for the contractor to assemble an effective and efficient
subcontracting plan.
2.1.2
(24) Industry: The Contractor may be asked to support unforecasted
contingencies, but should not be required to do so. The Contractor
should be compensated for all additional cost incurred in supporting
such an effort.
Response: Because of the potential severity of unforecasted
emergencies such as military contingencies, natural disasters, etc.,
MTMC believes it is imperative that the contractor be required to
support these unforeseen events. A provision does exist for HQMTMC and
the contractor to negotiate, when applicable, rate adjustments
necessitated by such unforecasted conditions that exceed contract
requirements. However, if such requirements are within the daily
maximum capacity established in the initial contract, they should not
entitle the contractor to additional compensation.
2.2 Movement Via Air Mobility Command (AMC)/Military Sealift Command
(MSC)
(25) Industry: Movement via AMC/MSC is not a commercial business
practice. MTMC is taking away the Contractors traffic management
responsibility for through movement. The PPSO's right to direct
movement via AMC/MSC will deny the Contractor the ability to negotiate
the most cost effective rates based on volume.
Response: DOD policy mandates use, under certain circumstances, of
AMC and MSC lift capability. This policy serves to maintain DOD's
transportation assets in operation during peacetime so they are
available during contingencies. In addition, there always is not ample
American flag service to accommodate the volume of DOD Unaccompanied
Baggage moving between CONUS and certain OCONUS destination (i.e.,
Korea), and there are some OCONUS areas where AMC/MSC assets provide
the only service available. Any directed use will be separately
addressed in any ensuing solicitation.
2.3 Compliance With DOD Policies
(26) Industry: Compliance with regulations, publications,
directives, MTMC advisories, and changes thereto are not commercial
business practices. The contract should be all inclusive and the
contract should not be revised without consultation and agreement from
the Contractor.
Response: The contract will specify which conditions the contractor
must comply with. Once the contract is signed and awarded, any change
must be discussed with the contractor. There is no way it can be
revised without the knowledge of the contractor.
2.5 Automation Interface
(27) Industry: Automation interface systems must be readily
available in the commercial marketplace and not out of the technical or
financial reach of contractors. Interface capability of the local
agents may be cost prohibitive and the requirement may preclude small
businesses from participating. MTMC should consider assisting small
businesses in acquiring this capability by providing sufficient notice
of the details of the electronic capability being requested.
Response: Definitive automation requirements will be included in
the Request for Proposal. MTMC envisions many benefits associated with
electronic capability such as intransit visibility of shipments,
electronic billing, and payments, etc. However, MTMC is also sensitive
to demands upon small and medium size businesses that provide quality
service. Consequently, MTMC will look to implement electronic
capability requirements that are efficient, cost effective and
reasonably avilable to the industry. We will also consider capabilities
of DFAS, the PPSOs, the military services, the customers, and MTMC.
3. Key Personnel
3.1/3.2 Contract Manager/Operations Manager
(28) Industry: It is not commercial practice to dictate the
experience levels of the contractor or subcontractor personnel. Key
personnel requirements should not be micromanaged by MTMC. The 10 years
experience requirement for the Contract Manager, and the 5 year
requirement for the alternate and Site Manager is unreasonable.
Recommend reducing or eliminating this requirement since the quality
feedback of the market place will drive the parties providing service
to employ the best personnel available to ensure high quality rankings.
Response: MTMC partially agrees and has eliminated the requirement
for years of experience for all key personnel except the Contract
Manager. MTMC believes that a minimum number of years of experience is
a necessary requirement to assure that the Contract Manager has the
knowledge and background to be responsible for the performance and
operation of the contract. However, as recommended by industry, MTMC
will relook the minimum experience requirement for the Contract
Manager. The specific requirement will be stated in the RFP.
3.3
(29) Industry: The prohibition against a contractor removing key
personnel constitutes interference with the internal management of the
contractor's company. This requirement should be deleted.
Response: MTMC has eliminated the requirement that the contractor
must notify and receive concurrence by HQMTMC of the replacement of key
personnel, with the exception of the Contract Manager whose replacement
must be with the concurrence of HQMTMC. HQMTMC is only concerned with
the replacement's qualifications. It is necessary that the contractor
verify to HQMTMC the qualifications of the potential replacement of the
Contract Manager to assure that the quality of contract performance is
not placed at risk by the employment of an inexperienced contract
manager.
4. Personnel
4.3
(30) Industry: Imposing requirements for uniforms with company name
or logo and Contractor issued identification cards are an excessive
regulatory requirement which provides no service quality benefit. These
requirements disrupt commercial industry practices and impact
subcontractors, small businesses, and carriers employing casual labor.
An alternative would be to require employees performing services at the
customers residence to dress in appropriate attire and be in
presentable clean condition. If identification is sought by the
customer, require the driver or lead foreman to present commercial
drivers license or possibly a Contractor issued identification card.
Response: MTMC has modified the requirement. All employees
performing moving services at the customer's residence shall be in
uniform shirt with company name or logo and maintain a professional
demeanor. The team leader shall have some type of contractor issued
identification. The uniform shirt and team leader's identification card
provide a method for the customer to verify who the individuals are
before allowing entry to their home. The identification card provides a
quick and accurate way for the customer to identify the team leader who
is in
[[Page 14753]]
charge of the work group and who the customer can go to if a problem
arises. MTMC feels that these requirements are simple as well as
inexpensive methods to reassure the service members that the
individuals handling their personal belongings are professionals.
Although these requirements may not have a direct impact on the quality
of service being provided, we believe that they are reasonable methods
to relieve some of the anxiety associated with moving.
5. Quality Control
5.2 Intransit Visibility Service
(31) Industry: MTMC requiring tracing within 2 hours is not
realistic and not the prevailing commercial practice.
Response: MTMC realizes that at the time of a tracing request, the
shipment may be in route and it may be difficult for a contractor to
provide an exact status on that particular shipment. Upon a request of
a shipment trace by the customer or the government, an initial response
from the contractor that provides the most current status available
within 2 hours from the time of the request will be required. Once the
initial response is made, a more updated and exact status can then be
provided at a later time. Technology available and currently in use by
many carriers today allows for the capability to trace, monitor, and
report movement progress of any shipment instantaneously. As our
members may also be traveling at the time of the request, we feel that
a 2 hour response time reasonably meets their needs while placing a
reasonable demand on the contractor.
(32) Industry: The requirement for the contractor to provide a
weekly report to the destination PPSO listing all anticipated late
shipments is excessive.
Response: MTMC understands industry's concerns with the volume and
frequency of reports currently proposed. Consequently, MTMC is
currently reviewing all the report requirements to determine which ones
can be streamlined or eliminated.
5.3 Access to Contractor Facilities
(33) Industry: Access to contractor's facilities should be limited
to normal working hours, by appointment only, and should not include
access to personnel files.
Response: Access to contractor records is often required to
substantiate compliance with statutory or contractual requirements.
When such efforts are necessary, the Government will coordinate with
the affected contractor to minimize disruptions as much as feasible.
5.4 Contractor Meeting With PPSO
(34) Industry: Contractor meetings with the PPSO should follow the
commercial practice that a meeting occur on an as needed basis based
upon common sense, problem resolution and the judgment of the manager
involved. It is not necessary to hold these meeting on a weekly,
biweekly, or monthly basis.
Response: MTMC agrees. The intent of this requirement is to let the
PPSO schedule the meetings at his discretion.
5.5 Contractor Operational Problems
(35) Industry: Agree that the contractor should keep MTMC/PPSO
informed about serious problems that arise, but disagree with being
required to advise the PPSO of the loss of a subcontractor. If a
subcontractor goes out of business or the relationship to the
contractor is terminated for any reason, neither MTMC nor the PPSO
should be involved as long as the contractor is still able to fulfill
its duties.
Response: MTMC agrees and will modify the requirement accordingly.
MTMC has no privity of contract with subcontractors; however, prime
contractors will be expected to fulfill their contractual obligations.
However, should a subcontracting plan become part of any ensuing
contract, any substantial variance from its terms must be reported.
5.6 Customery Survey
(36) Industry: Agrees with replacing TQAP with a customer survey
form.
Response: MTMC agrees and TQAP will be replaced with the customer
survey form.
(37) Industry: MTMC should not prescribe the questions on the
customer survey to be asked.
Response: MTMC believes that there are some core questions that
must be mandatory on the customer survey form to evaluate contractor
performance. However, MTMC does not intend to otherwise limit the
questions that the carrier believes it needs to retain quality service.
(38) Industry: There should be a mandatory return policy on the
customer survey form for the military service member, and if after a
predetermined time no reply is received then the move should be
considered satisfactory with the contractor receiving credit
accordingly.
Response: MTMC cannot mandate that the military member return the
customer survey form. We would expect carriers to institute reasonable
efforts to obtain representational answers. PPSOs will conduct a
sufficient number of random surveys to assure the sample size for each
contractor per region/contract provides a minimum 95 percent confidence
level. However, PPSO efforts will not remove carrier responsibility to
take all reasonable efforts to obtain survey results.
6. Quality Assurance
6.2 Contractor Performance
(39) Industry: The required standards of 99% for on-time pickups,
95% for on-time delivery, and 95% for using the contractor again are
higher than most corporate accounts and should be lowered.
Response: MTMC does not concur and has retained the requirement for
these standards. MTMC has benchmarked this requirement with corporate
customers and found numerous examples of standards equal to or higher
than these, and believes that the DOD, as this industry's largest
single customer, deserves equal service. Consequently, MTMC believes
that these standards are appropriate and reasonable.
(40) Industry: In addition to measuring loss/damage, claims
frequency and loss/damage claims exceeding a certain dollar amount, the
contractor's performance should be measured on the basis of claims cost
per hundredweight. Furthermore, loss/damage should not count against a
carrier as long as the member was made whole and is satisfied with the
move.
Response: MTMC disagrees that loss/damage should not count against
a carrier as long as the member was made whole and is satisfied with
the move. We believe that loss/damage is a critical element of a
contractor's overall performance and should be compiled and evaluated.
MTMC is considering claims' cost per hundredweight, as well as other
alternatives.
7. Specific Tasks
7.1 Customer Service
7.1.1 Toll Free Telephone Numbers
(41) Industry: It is simple to provide for toll free numbers in the
United States, but toll free numbers are not available all over the
world internationally. Also, the toll free number should only be
required to be manned during normal business hours which is 5 days a
week and 8 hours a day. Recommend that after hours be covered by a
mechanical message collection device with follow up during the next
official business day.
Response: MTMC recognizes that in some instances toll free numbers
may not be available internationally. MTMC
[[Page 14754]]
has modified the requirements document to read that if toll free
capability is not available, the contractor shall accept collect calls.
MTMC has also modified the requirement of the toll free number being
manned 24 hours a day, 7 days a week, to it being operational 24 hours
a day, 7 days a week. Thus, a type of recorder, beeper, or other
electronic device may be used provided someone knowledgeable will
promptly respond to the customer's concern. The goal is to allow
customer's located in different time zones, to contact the contractor
without being restricted by the contractors routine office hours.
(42) Industry: It is redundant and unnecessary for the contractor's
origin and destination agents to have toll free numbers. The service
member should be dealing with the contractor; thus, only one toll free
number is necessary.
Response: MTMC agrees and has eliminated the requirement for origin
and destination agent toll free numbers. However, the requirement for
the contractor to establish and maintain a toll free number for their
service areas has been retained in the requirements document. We
believe it is necessary that the customer have at least one toll free
number where his/hers inquiries/problems can be dealt with in a timely
manner.
7.1.2 Movement Counseling
7.1.2.1
(43) Industry: Imposing a minimum transit time schedule for the RDD
is micro management, and instead MTMC should allow the contractor to
work with the customer to reach a mutually agreed upon RDD. MTMC should
also allow the use of spread dates for pickup and delivery because it
is a commercial practice, allows for the greatest flexibility, and the
maximum use of a carrier's capability.
Response: MTMC agrees that the transit time guide should not be a
mandatory regulation for determining the RDD, and the contractor and
the customer should be allowed to come to a mutually agreed upon
delivery date. However, a transit time guide will be made available to
be used as a tool to assist in determining the RDD. In those instances
when a mutually agreed RDD cannot be reached between the Contractor and
the customer, the transit time guide will be used to establish the RDD.
MTMC will not require the customer to agree to the use spread dates.
However, if the contractor and the customer mutually agree to the use
of spread dates for pack, pickup, or delivery, then spread dates may be
used. However, if the customer does not agree to spread dates, then the
contractor must agree to a specified date for these services.
(44) Industry: MTMC needs to clarify the requirement that the
contractor must notify the customer within 2 work days after
notification by the PPSO that the contractor has been awarded the
traffic.
Response: MTMC has eliminated the 2 work day minimum for
notification, and modified the requirement so that upon notification of
shipment award, the contractor shall contact the customer to confirm
the pack, pickup, and tentative required delivery dates established
during the PPSO entitlement counseling or establish mutually agreed
upon dates. The contractor shall provide each customer and the PPSO a
schedule of all confirmed dates prior to the pickup date. The PPSO will
then issue a service order based on these confirmed dates.
(45) Industry: Agrees with move counseling being done by the
carrier. However, MTMC/PPSO must continue to provide entitlement
counseling because of the variation in policy among each of the
military services.
Response: MTMC agrees and the PPSOs will continue to provide
entitlement counseling to the service members while the contractor will
now be responsible for movement counseling.
7.2 Pre-move Survey
(46) Industry: It is unnecessary to require an on site pre-move
survey on all shipments regardless of weight or type. Telephone surveys
should suffice for small shipments and shipments more than a specified
number of miles away.
Response: MTMC wants the contractor to perform a pre-move survey on
all shipments. However, MTMC agrees that in many instances a pre-move
survey conducted by telephone would be effective and appropriate.
Consequently, the requirement has been modified so that a residence
pre-move survey shall be conducted on all shipments estimated at 3000
pounds or more, at origin points within a 50 mile radius of
contractor's nearest agent facility, unless specifically waived by the
customer and annotated on the service order. A telephone contact pre-
move survey shall be made, as a minimum, for all other shipments.
7.3 Customer Inconvenience Payment
7.3.1
(47) Industry: There should exist a minimum weight and miles
standard in determining inconvenience claims, as is the prevailing
commercial practice. The contractor should not be responsible to pay
100% of the costs of meals, clothing, or other purchased items that
retain a residual value. Inconvenience payments should not be tied to
the government per diem rate.
Response: MTMC does not concur and has retained the requirement
that the contractor shall pay the customer an inconvenience claim when
a missed pickup, missed RDD, or missed confirmed delivery date from SIT
causes inconvenience to the customer and the expenditure of personal
funds for the reasonable costs for lodging meals, and rental/purchase
of household necessities. MTMC has also retained the requirement that
the contractor's maximum liability, excluding costs for rental/purchase
of reasonable household necessities, shall not exceed the local DOD per
diem rate. MTMC believes that the customer should be reimbursed for
reasonable out of pocket expenses incurred as a result of these type of
situations. MTMC further believes that the DOD per diem rate provides
an established and effective tool to determine the cost for lodging and
food expenses associated with the various cost of living rates in
different areas of the world.
7.3.2
(48) Response: The contractor being required to acknowledge receipt
of the inconvenience claim is unnecessary. Also, the contractor will
require more than 15 work days from the time of the customer's request
for reimbursement to make payment of the inconvenience claim.
Response: MTMC partially agrees, and has eliminated the requirement
for the contractor to acknowledge receipt of the claim to the customer
within 5 days of the date of the customer's request. However, MTMC
believes that 15 work days from the time of the customer's request is a
reasonable period of time for the contractor to make payment on an
inconvenience claim, and has retained this requirement. This
requirement is designed to reimburse the customer for unexpected
expenses that he/she may not be reasonably able to personally
underwrite.
8. Transportation Services at Origin
8.3 Advance Notice of Pack/Pickup Dates
(49) Industry: Do not agree with short notice shipments being done
at no additional cost to the government. Additional services of this
type should be compensated because it goes beyond the level of normal
service.
[[Page 14755]]
Response: MTMC has retained the requirement that short notice
shipments, such as disciplinary actions, compassionate reassignments,
movements pertaining to deceased members and their families and short
notice assignments, shall be moved at no additional cost to the
Government. The contractor should account for these possible type
situations up front in the contractor's single factor rate, and
exercise sound business practices that permit the him/her to be
responsive to the government's needs. On the other hand, unforeseen
emergencies such as natural disasters, are subject to negotiation under
the expansion capability paragraphs of the draft requirements document.
8.4 Acceptance of Shipments
8.4.1
(50) Industry: It makes no sense to force the contractor to take
shipments with dates that cannot be met. There must be a minimum daily
work load established.
Response: MTMC is considering allowing contractors to establish
their maximum daily capacity at each AOR within a region. Each
contractor would be required to accept all shipments offered until they
reach their established maximum daily capacity. Contractors may refuse
shipments once they reach their maximum daily capacity. We will provide
specific details in the draft solicitation.
8.4.3
(51) Industry: Forcing the contractor to provide the PPSO a daily
report of all shipments scheduled for pack and pickup for the next work
day is an administrative burden with no clear value added.
Response: MTMC agrees and has eliminated the requirements that the
contractor provide this daily report.
8.6 Expedited Service
(52) Industry: Currently, the draft requirements document provides
that expedited service charges apply only if the RDD is less than 25%
of the published transit line. This language must be changed to require
an expedited service charge whenever the PPSO requires the RDD to be
less than the transit time. The requirement that expedited service be
provided without additional cost is unreasonable.
Response: MTMC has modified the requirements document to state that
if the required delivery date is less than 50% of the transit time then
expedited service charges will apply. MTMC believes that with the
contractor and the customer working together to set up a mutually
agreed upon delivery date, this will allow the flexibility and the
opportunity for the contractor to meet most expedited deliveries
necessitated by member needs. In those cases when the PPSO deems it
necessary for the required delivery date to be less than 50% of the
published transit time when the expedited service charge will apply.
Otherwise, we expect potential contractors to include this requirement
in their single factor rate.
11. Shipment Diversion
(53) Industry: Diversions of shipments up to 100 miles at no
additional cost is an excessive requirement.
Response: MTMC agrees that requiring the contractor to be
responsible for shipments diverted to a new destination up to 100 miles
at no additional cost is excessive. Consequently, the requirements has
been modified to 50 miles. However, when necessary to meet the needs of
the Government, the PPSO may order the contractor to divert a shipment
to a new destination that is more than 50 miles from the original
destination. In such case, a new single factor rate that includes all
charges from original origin to new destination will be negotiated
between the PPSO, in coordination with MTMC, and the contractor.
14. Transportation Services at Destination
14.8 Destination Shipment Report
14.8.1
(54) Industry: Destination shipment reports are excessive and
unnecessary micro management by MTMC.
Response: MTMC understands industry's concerns with the volume and
frequency of reports currently proposed. Consequently, MTMC is
currently reviewing all the reporting requirements to determine which
ones can be streamlined and/or eliminated.
14.9 Conversion of Storage in Transit (SIT) to Commercial Storage
(55) Industry: There must be a defined end point to government paid
SIT, not just an undefined specified date by the PPSO.
Response: SIT is authorized in increments of 90 days with
extensions up to 360 days. Consequently, SIT does have a defined end
point. In addition, a storage extension forms reflecting the expiration
date will be provided to the Contractor.
15. Liability
15.1
(56) Industry: The contractor should have the prerogative of
repairing a damaged item or replacing the item whichever they deem more
cost effective.
Response: MTMC agrees and has added the option of allowing the
contractor to negotiate with the member to repair damaged item(s) are
repaired to the same condition as received by the contractor from the
member at the time of pickup. If however, the contractor chooses to
replace the lost or damaged item(s), then replacement will be
determined by current market value without depreciation.
15.2
(57) Industry: Need to add statement that any item replaced becomes
the property of the contractor.
Response: MTMC agrees and has modified the requirements document to
read that all items which are replaced or for which the full current
market value has been paid become the property of the contractor. The
contractor shall pick up the salvage within 30 calendar days after
settling the claim with the customer unless provisions for a later pick
up date are made with the customer. Failure to pick up salvaged
property within the prescribed time results in forfeiture of the
property, loss of any deduction of funds for salvage value, and the
customer may then dispose of the property.
15.3
(58) Industry: Full value protection of $100,000 per shipment is
excessive and should be modified to apply a released value on a per
pound basis. Coverage should be depreciated; however, the member could
choose to purchase additional coverage at an additional cost if
desired. The contractor should be allowed to use a high-value inventory
in which the member must identify articles with a value of greater than
$100.00 per pound.
Response: MTMC partially agrees and has reduced the maximum
liability from $100,000 per shipment to $75,000 unless the customer
purchases additional insurance. MTMC is aware that additional up front
costs may be associated with full value protection; however, it is a
service that is desirable for our military members. We believe that in
the long run, these up front costs will be offset by better service and
a reduced claims ratio per move. This notwithstanding use of a high-
value inventory being considered.
16. Loss and Damage Claims
16.1
(59) Industry: Agrees with service members filing their claims
directly with the contractor.
[[Page 14756]]
Response: MTMC also agrees with direct claim settlement between the
contractor and the customer, and has provided for this option in the
draft requirements document.
16.3
(60) Industry: Commercial practice requires that exceptions (damage
to property) be noted at the time of delivery. At a minimum, the
customer should be required to notify the contractor of loss or damage
within a minimum number of specified days following delivery.
Response: The contractor will provide the customer a notice
document at time of delivery, and the customer will provide the
contractor at time of delivery with written notice of discovered lost
and damage. MTMC agrees that the service member should notify the
contractor in a timely manner of later discovered loss or damage.
Consequently, the requirement has been modified to read that the
customer will have 90 days to notify the contractor in writing of later
discovered lost or damaged items. For lost and damaged items identified
by the customer within the 90 day notice period, the notice document
overcomes the presumption of the correctness of the delivery receipt.
16.4
(61) Industry: The service member should only have up to nine
months to file a claim as is the current commercial practice.
Response: MTMC disagrees. Current commercial practice is no less
than 9 months. We feel that a 1 year limit for the service member to
file their claim directly with the contractor is fair, due to the
uniqueness of military constraints.
16.7
(62) Industry: Need to add a clause allowing the contractor to
inspect the damaged item(s).
Response: MTMC agrees, and has added the statement that the
contractor shall have the right to inspect the damaged property within
45 calendar days of delivery or dispatch of the customer's written
notice document, whichever is later. The contractor shall notify the
customer prior to any inspection to arrange a mutually agreeable time.
16.8
(63) Industry: The contractor will need more than 30 days to gather
documentation, determine the validity of a claim, make investigation,
conduct inspections, arrange for repairs and make cash settlement to
the service member.
Response: MTMC agrees that in certain cases the contractor may
require more than 30 days to settle the claims as was required in the
original draft requirements document. It has been changed to read that
the contractor shall pay, decline, or make a firm compromise settlement
offer in writing to the customer within 60 calendar days after receipt
of the claim by the contractor. However, if the contractor fails to
respond within 60 calendar days of receipt of the claim, or the
contractor declines to pay the claim, the customer may file a claim
with the appropriate military claim service. Such claim to the military
claim service may address all items which are not covered by an
agreeable resolution between the contractor and the customer.
16.11
(64) Industry: The service member should be precluded from filing a
claim directly with the government. Also, the government should not
have the power to offset on disputed claims between the contractor and
the customer.
Response: We cannot change the member's statutory right to file a
claim directly with the government. However, we prefer that the member
file directly with the contractor, and we plan to encourage it by not
making full replacement coverage available if the member decides to
settle directly with the military, without first seeking reimbursement
from the carrier. As for the government not having the right to offset
on disputed claims, we disagree and believe that the government should
have the right to enforce contract requirements and be the service
members' advocate. In any event, it is a remedy available under the
terms of government contracts. Consequently, as a minimum, the
contractor will be subject to set aside by the government on those
items that the military pays for and which the contractor improperly
denied.
16.13
(65) Industry: A monthly claims activity report provided by the
contractor to the PPSO is unnecessary and should be reduced to a
quarterly basis.
Response: MTMC disagrees. This monthly report is necessary to
assist in evaluating carriers' overall performance.
17. Billing and Payment Procedures
17.1
(66) Industry: The requirement to have all invoices certified by
the PPSO, that show that all services have been performed, is
unnecessary, encourages lost billing, and is counter productive to the
prompt payment act. Instead the contractor should bill the finance
center directly.
Response: The invoice certification requirement is being
reevaluated as part of the effort to implement EDI procedures.
Attachment 3--Single Factor Rate/Accessorial Information
1. Single Factor Rate (SFR)
(67) Industry: Single factor rates reduce the direct compensation
to service providers for extra services rendered, which are time and
labor intensive. The SFR is too inclusive. Prevailing commercial
practice is that accessorial services are separately identified and
payable when requested and performed.
Response: MTMC disagrees and will retain the SFR pricing structure.
Carriers currently participating in the international through
Government bill of lading program submit SFRs for household goods and
unaccompanied baggage shipments. Additionally, MTMC feels the SFR
should encompass the majority of the accessorial services which may
affect a shipment. Service providers should ensure costs for
accessorial services are negotiated and agreed upon prior to contract
award. MTMC has identified those accessorial services which will be
outside the SFR pricing structure. These services are not routinely
ordered, are labor intensive, and costly to perform. Separate rates
will be submitted by the Contractor for these services. This should
ensure the Contractor's service providers are equitably compensated for
services rendered.
2. SFR Solicitation/Submission
(68) Industry: Single factor rates are not prevailing commercial
practice for domestic shipments and are used on a very small percentage
of commercial corporate accounts. SFR pricing does not provide the
means or the structure needed for fair pricing and payment of moving
services. Domestic movements and the majority of commercial accounts
use a discount from a common industry baseline tariff and a segmented
rate. Corporate accounts which do use single factor pricing predicate
rates on a weight and mileage matrix.
Response: MTMC recognizes that SFRs are not the prevailing
commercial practice for domestic shipments. However use of SFRs will
standardize, simplify, and reduce administrative workload associated
with rate
[[Page 14757]]
submissions/evaluation, accessorial services, billing and payment, and
program management. Major goals for the reengineering effort are
program simplification and reduction of administrative processing. The
volume associated with the personal property program warrants attaining
such goals.
2.1, 2.3.1 Domestic Service
(69) Industry: The underlying services and transportation methods
for unaccompanied baggage (UB) differ significantly from those for
household goods (HHG) shipments. Bundling of HHGs and UB together to
move on the same SFR is not supportable. Factors for fixed costs also
have a larger impact on smaller shipments and domestic baggage cannot
be moved at the same rate as a large HHG shipment. It would be
unrealistic for the same rate to apply for UB as it does for HHG
shipments regardless of size. UB shipments are more expensive due to
initial acquisition costs, inventory control measures, and labor costs
for containerization. Pricing shipments at the same rate per
hundredweight regardless of size and distance will result in
significant over-payment for some shipments and under-payment for
others. An alternative procedure for domestic service would be to
establish domestic baggage service and have separate baggage rates.
Response: MTMC is reevaluating movement of unaccompanied baggage/
personal effects within CONUS to determine if a different pricing
structure is appropriate.
(70) Industry: By combining domestic UB with HHG rates, the small
business set-aside used for the Direct Procurement Method (DPM) pack &
crate service is eliminated. This will adversely impact many small
businesses who specialize in the service for DOD.
Response: MTMC believes that the multiple contract aspects of its
proposed system, along with inherent opportunities to form consortiums
and use subcontracts will provide meaningful small business
opportunities.
(71) Industry: Carriers and forwarders do not typically perform
local move services. Local moves are provided by local agents within
the AOR and contracts for these services are awarded by the
installation contracting offices. Prevailing commercial practice is to
bill local moves at an hourly rate. Local moves should be solicited and
awarded separately.
Response: Local moves will be excluded from the pilot program. MTMC
is currently evaluating how local moves will be incorporated into the
regional concept.
(72) Industry: UB needs to be better defined. The types of items
which will be included in a typical baggage shipment and whether it
must be shipped via air or surface must be known. If UB can be more
accurately defined, an SFR could possibly be used since fewer
accessorials apply. In addition, some type of mileage factors need to
be included.
Response: UB is defined as that portion of the customer's
prescribed weight allowance of personal property, including
professional books, papers, and equipment, normally shipped separately
from the bulk of the personal property. UB is usually shipped via an
expedited mode because it is needed immediately, or soon after, the
customer's arrival at destination for interim housekeeping pending the
arrival of the major portion of the customer's property. The
entitlement for a UB shipment normally only exists when a member has a
permanent change of station to/from an OCONUS location. The term ``UB''
will not be used for shipments moving within CONUS under the
reengineered program. Small shipments moving with CONUS will be
classified as a personal property shipment and normally are not shipped
via an expedited method. However, if the PPSO determines the need to
expedite a personal property shipment, the expedited service paragraph
of the draft requirements document will control carrier compensation.
2.2 International Service
2.3.2
(73) Industry: Requiring the contractor to file rates for all four
international types of service restricts competition and constitutes
bundling. Bundling of HHG and UB in the international program restricts
competition and ``administrative convenience'' is not sufficient
justification for bundling. The contractor should be allowed to bid on
HHG and UB separately. This alternative would provide all required HHG
and UB services for each AOR and will increase competition by
permitting more carriers to independently file rates for each channel.
Response: MTMC does not agree. Under the regional concept all
potential contractors will be required to submit both HHG and UB rates
for every rate area within an origin region to all destination rate
areas for a category of service (e.g., a CONUS origin region to all
OCONUS destinations, and OCONUS origin region to all CONUS
destinations, or an OCONUS origin region to all OCONUS destinations).
MTMC recognizes certain carriers participating in the present program
have specialized in UB service; however, we believe that requiring the
same contractor to provide HHG and UB services simplifies the
acquisition process for DOD, enhances competition, and simplifies
accountability by allowing DOD and the customer to deal with one
contractor per move. Bench marking surveys with corporate accounts and
commercial business practices disclose that commercial customers are
not usually required to consult with different carriers to acquire
movement services for HHG and UB. This requirement does not constitute
improper bundling or restrict competition because the regional/multiple
award concept increases business opportunities for industry. In
addition, potential contractors may subcontract with any carrier for
specialized services.
(74) Industry: American carriers who file inter- and intra-theater
rates would not normally have operating authority and expertise to
transport local and in-country overseas moves. Historically, in-country
and local moves have been separated and performed by the local small
business movers located with the AOR. Rates for these shipments are
procured by overseas Contracting Officers who have the experience with
the local conditions and requirements. Combining these types of moves
in one channel is not cost efficient and does not simplify the process.
The procurement for these moves should remain with the overseas
contracting offices.
Response: MTMC is evaluating the unique requirements and factors
which may affect these movements to determine how they can be
incorporated into the regional concept. OCONUS local and in-country
moves will be excluded from the pilot program.
2.4
(75) Industry: Separate accessorial service charges are needed for
each origin AOR.
Response: MTMC agrees and recognizes costs vary significantly by
geographic area. Therefore, Schedule A of the requirements document has
been modified to allow contractors to submit separate accessorial
charges for SIT services, Flat Service, and special crating for each
origin rate area within a region.
2.5
(76) Industry: It is unreasonable to have 100 net pounds as the
minimum weight for all SFRs. The prevailing commercial practice is
generally a
[[Page 14758]]
minimum weight of 1,000 pounds for HHG and 100 pounds gross for UB. The
use of the net weight in lieu of gross weight for UB will create
additional work. Gross weight is used for UB because obtaining the tare
weight of small cartons and boxes is costly and labor intensive.
Further the ITGBL program has always moved UB on a gross weight basis.
Recommend using prevailing commercial practice or a 500 pound minimum,
Response: MTMC agrees and has modified the Requirements Document to
state the SFR and all accessorial service charges, computed on weight,
are subject to a 500 pound net minimum.
3. Accessorial Service
3.1
(77) Industry: An accessorial statement being sent to the PPSO for
signature is redundant and unnecessary. The contractor's billing,
supported by the member signed accessorial should suffice. Allowing 10
days to return the certified accessorial statement to the contractor
will unreasonably delay carrier billings.
Response: MTMC disagrees. The contractor will be required to
prepare and submit to the PPSO for certification an accessorial
statement authorizing accessorial services. The service member is often
unable to verify all accessorial services that are performed. For
example, the service member may be unaware of possible charges such as
an attempted pickup, waiting time, number of days in SIT, etc.
Consequently, it is a necessary requirement for the PPSO to certify the
accessorial services.
(78) Industry: Auxiliary services are costly, labor intensive, and
time consuming. The frequency of this service cannot be determined and
therefore should not be part of the SFR.
Response: MTMC agrees and Attachment 3 has been modified to include
auxiliary service. The Flat Service charge will be used for computing
the cost for auxiliary service. Auxiliary service must be authorized by
the PPSO prior to commencement of service.
3.4.1 Storage-in-Transit (SIT) Services
(79) Industry: The criteria established for commencement of SIT
charges is not acceptable or prevailing commercial practice. This
requirement will either force an increase in SIT charges to cover days
that are no longer billable or it will have a negative impact on local
agent's revenue. MTMC would like to reduce the amount paid for SIT, so
it is attempting to limit its application by not paying for SIT prior
to the required delivery date. This application may apply if commercial
shipments were involved and commercial practices and commercial rate
levels were used. Prevailing commercial practice is to use spread of
dates for delivery. If the shipment arrives within the spread, SIT
begins on date of arrival. If the shipment arrives ahead of the spread,
SIT commences on the first day of the spread.
Position. MTMC does not agree and will retain the requirement that
SIT charges at destination will not commence prior to the first work
day following the agreed upon RDD or the offered delivery date when
later than the RDD. The RDD will be established and mutually agreed to
between the contractor and customer during the movement counseling.
This direct personal interface between the contractor and customer will
encourage open communication and realistic RDDs can be established.
This will also allow the contractor to more efficiently utilize his
resources. MTMC realizes spread dates are a commercial business
practice; however, we believe the use of spread dates should be at the
discretion of the customer. MTMC does not object to use of spread dates
if agreed to by the customer. If the shipment arrives within the spread
and delivery cannot be coordinated, SIT begins from expiration of the
time provided for transportation services at destination. If the
shipment arrives ahead of the spread, then SIT will start on the first
day of the spread. Our desire to limit SIT is not based on
considerations associated with the cost of SIT. Rather, we hope to
limit unnecessary handling of the HHGs and thereby reduce the incidence
of damage.
(80) Industry: A single daily SIT charge, based on a 100 pound
minimum, which includes warehouse handling, storage, and drayage to/
from the SIT facility is not appropriate and not prevailing commercial
practice. When a shipment is placed into storage, a large percentage of
the charges are incurred from unloading the truck and handling the
shipment. That is why the tariff contains a warehouse handling charge
and a higher first-day SIT charge. The charges for additional days are
lower because the costs involved with actual storage are much lower
than the first day. The Government would save money by continuing this
practice. Other alternatives include minimum 30-day storage period with
separate warehouse handling and delivery charges or separating the SIT
charge from the warehouse handling/drayage charge. These alternatives
would ensure sufficient revenue is generated to pay for administrative
and operational costs.
Response: MTMC partially agrees and has modified Attachment 3 to
read ``Charges for this service will be based on the net weight of
property stored in transit, subject to a 500# minimum.'' MTMC
recognizes charges associated with warehouse handling and drayage
differ from those associated with the actual storage of the property.
Accordingly, a modification also has been made which allows the
Contractor to submit a SIT charge which applies for each 15-day period
of storage or fraction thereof and a warehouse handling/drayage charge.
These two charges will be submitted separately and considered in the
price area during the source selection evaluation process.
(81) Industry: A 100 mile radius for delivery out of SIT at no
additional charge is not a commercial practice as well as an excessive
requirement.
Response: MTMC agrees and has reduced the requirement. The
requirement has been reduced to the contractor being responsible for
direct deliveries and deliveries from SIT within a 50 mile radius of
the original destination at no additional charge. The contractor will
be compensated for direct deliveries and deliveries from SIT within the
AOR that are more than 50 miles from the original destination.
Attachment 3, of the draft solicitation, will specify these provisions.
3.4.2 Flat Service Charge
(82) Industry: The Flat Service Charge is not a commercial business
practice. The charge is stated on a per hour basis and the per hour
amount includes all labor, mileage, and vehicle use. Accessorial
services involving labor are billed in the commercial marketplace on a
per man, per hour basis. The number of personnel required to perform a
service varies depending on the size of a shipment. Therefore, it is
difficult to construct a rate which would compensate the service
provider equitably. Recommend changing this service to include billing
on a per hour, per man, basis. In addition, a separate flat service
charge should be solicited for HHG and UB because the equipment and
manpower for each is vastly different.
Response: MTMC does not agree. The per man approach complicates the
verification and billing process. MTMC believes industry can construct
a rate based on the average number of personnel required to perform the
services specified.
[[Page 14759]]
3.4.2.3 Extra Pickup and/or Delivery
(83) Industry: Extra pickup and/or delivery requirements are not
commercial business practices. The contractor should be compensated for
any extra pickup or delivery, not just more than one. The 75-mile
radius is excessive and should be changed to 50 miles.
Response: MTMC recognizes requiring the contractor to perform the
first extra pickup or delivery outside a 75-mile radius from the first
pickup point may be excessive. Accordingly, the 75-mile radius has been
changed to 50 miles. MTMC believes those accessorials services which
are routinely ordered should be included in the SFR. This will ease the
program administration and execution.
3.4.2.6 Partial Withdrawal From Sit
(84) Industry: Application of the flat service charge is not
realistic. The definition of this charge includes the use of trucks and
mileage. Removal of a shipment from storage in a warehouse and sorting
items is completely different in nature. A charge based on labor per
hour, per man should apply to ensure service providers are equitably
compensated.
Response: The Flat service charge is a labor charge which includes
the sorting of items.
(85) Industry: Customer presence in the warehouse during sorting
may pose insurance problems.
Response: Should such presence require additional cost to the
carrier, MTMC would expect that to be addressed in the carrier's SFR.
The option which allows the customer or PPSO to be present at the
contractor's facility during sorting and removal of the partial
withdrawal from SIT has been retained. The customer or PPSO presence
will minimize claims disputes because of the actual observation and
should therefore protect the contractor and the customer by eliminating
speculation over mishandling.
3.4.2.7 Waiting Time
(86) Industry: Free waiting time should be limited to 2 hours for
both domestic and international.
Response: MTMC agrees that 4 hours free waiting on domestic
shipment is excessive, and has reduced the requirement to 2 hours.
However, do not agree on reducing free waiting time on international
shipments from the 24 hours initially established in the draft
requirements document. The majority of international shipments go into
agent facilities first. Consequently, driver time will typically not be
lost as a result of the 24 hours of free waiting time on international
shipments because the shipment will most likely already be stationed in
an agent's facilities.
3.4.5 Third Party Service
(87) Industry: Commercial practice allows the contractor to add a
percentage to the cost incurred for the process of handling and funding
the transaction. Normal add-ons are in the 10 percent range and this
provision should be incorporated into this item.
Response: MTMC disagrees and retains the requirement that the
contractor will be reimbursed actual charges. Historically, a third
party invoice which sets both the services rendered, charges and basis
thereof must accompany the contractor billing. We do not intend to
change that practice from the commercial practice in effect throughout
the U.S.
Schedule A--Rate Sample
(88) Industry: The sample needs to be expanded to include the
charges at both origin and destination for all services. Because of the
requirement that prevailing wage scales be utilized in all areas, there
will be vast differences in the charges.
Response: MTMC agrees and recognizes costs vary significantly by
geographic area. Therefore, Schedule A has been modified to allow
contractors to submit separate accessorial charges for SIT services,
Flat Service, and special crating for each origin rate area within a
region.
(89) Industry: The proposed rate sample contemplates only one rate
for commercial/military air for HHG and UB. The same SFR cannot apply
to those shipments moving either commercial or military air.
Response: MTMC did not contemplate the same SFR applying for HHG
and UB movement via commercial and military air. The contractor will be
asked to submit a separate rate for commercial air--HHG and UB; and
military air--HHG and UB. However, the contractor will be required to
accept all commodities for movement upon contract award.
Attachment 9--Weight Additives
1.
(90) Industry: The only item that the draft requirements document
provides additional compensation for are boats. A weight additives
charges should apply for other commonly shipped bulky articles such as
satellite dishes, hot tubs, etc., as spelled out in the current tariff
item.
Response: MTMC does not agree. The costs associated with bulky
articles should be included in the SFR. In the current ITGBL program,
costs for this service are included in the SFR.
1.3 Boats and Sailboats
(91) Industry: It is unreasonable to expect contractors to
transport boats and/or similar items 14 feet and less at no additional
cost. Boat charges should follow the commercial tariff. Also, the
proposed provisions for boats over 14 feet but less than 25 feet
presents serious problems for international shipments. Boats of this
size will not fit in lift vans and must go inside the ocean container.
The proposed weight additive factor for boats will not provide adequate
revenues to cover significant expenses incurred in accommodating boats
of this size. If boats are too wide to fit inside a ocean container
they must be accommodated on racks. Ocean charges increase
significantly if the boat extends beyond the sides of the rack since
the boat occupies three ocean container spaces. Recommend boats 14 feet
and over in length remain in the OTO program for international
shipments.
Response: MTMC has modified the requirements document by adding a
weight additive of 700 pounds for boats and sailboats less than 14 feet
in length. Boat trailers less than 14 feet will have a weight additive
of 1000 pounds. Boats, sailboats, and boat trailers 14 feet and over
will be moved under the one time only (OTO) program. Canoes, skiffs,
rowboats, dinghies, sculls, and kayaks 14 feet and over in length will
have a weight additive of 700 pounds, while those less than 14 feet
will be moved under a single factor rate with no weight additive. Other
specifics of the requirements concerning boats will be released in the
upcoming draft solicitation.
Attachment 10--Weigh/reweigh Procedures
(92) Industry: Current commercial practice is that there is no
specific charge for a reweigh but the second weight is the billing
weight, regardless of whether it is above or below the first weight.
Since DOD shipments have a very high reweigh request rate, then the
contractor should be compensated for reweighs.
Response: MTMC will require the contractor to incorporate reweighs
in their single factor rate. Also, MTMC feels that the DOD as the
single largest shipper should benefit from the best commercial
practices available. Since the commercial practice is that no specific
charge is associated with reweighs, then reweighs ordered by the
government should also be conducted at
[[Page 14760]]
no additional cost to the Government. Further, MTMC, by requiring the
lower of the two weights to be used as the transportation charge, is
not modifying the program as it currently operates today. Finally,
changing reweigh procedures so that the second weight is also the
billing weight may adversely effect the members' entitlement to request
reweighs.
7. Observation of Weighing
(93) Industry: Unless specifically requested by the PPSO or the
customer, the contractor should not have to advise the PPSO or the
customer of the time and specific location of every shipment weighing.
This is an unnecessary administrative burden on the PPSO, the customer,
and the contractor.
Response: MTMC agrees and has changed the language to read that
``upon request'' the contractor will, prior to weighing, advise the
PPSO or the customer of the time and specific location of every
shipment weighing. Also the PPSO or the customer will have the right to
observe all weighing upon request and will be entitled to notice of the
time and location of the weighing with sufficient time to exercise that
right.
Gregory D. Showalter,
Army Federal Register, Liaison Officer.
[FR Doc. 96-8093 Filed 4-2-96; 8:45 am]
BILLING CODE 3710-08-M