[Federal Register Volume 64, Number 63 (Friday, April 2, 1999)]
[Notices]
[Pages 15976-15978]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8156]


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GENERAL SERVICES ADMINISTRATION


Federal Supply Service; Move Management Services (MMS) and the 
General Services Administration's (GSA's) Centralized Household Goods 
Traffic Management Program (CHAMP)

AGENCY: Federal Supply Service, GSA.

ACTION: Notice of proposed program changes for comment.

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SUMMARY: This notice invites comments on GSA's ``draft'' Statement of 
Work (SOW) for use in transitioning MMS, by October 31, 1999, from 
CHAMP to the Governmentwide Employee Relocation Services Schedule as a 
separate line item. The transition will occur during a continuous open 
season instituted on March 1, 1999 for the schedule. This notice also 
addresses comments received on a more general July 17, 1998 Federal 
Register notice GSA published on this subject (63 FR 38653). Under the 
transition plan GSA will continue to be able to meet customer household 
goods service needs while shifting MMS to a Federal Acquisition 
Regulation (FAR) contract procurement method.

DATES: Please submit your comments by May 3, 1999.

ADDRESSES: Mail comments to the Transportation Management Division, 
(FBF), General Services Administration, Washington, DC 20406, Attn: 
Federal Register Notice. GSA will consider your comments prior to 
implementing these proposals.

FOR FURTHER INFORMATION CONTACT: Larry Tucker, Senior Program Analyst, 
Transportation Management Division, FSS/GSA, 703-305-5745.


[[Page 15977]]


SUPPLEMENTARY INFORMATION: GSA published a notice for comment in the 
Federal Register on July 17, 1998 (63 FR 38653) announcing its plan to 
transition MMS from CHAMP to the Governmentwide Employee Relocation 
Services Schedule. GSA fully expected to transition MMS to the schedule 
as a separate line item at the beginning of a continuous open season 
that began on March 1, 1999. We determined, however, that it would 
better serve the interests of all affected parties to first allow 
another comment period on transition details before adding MMS to the 
schedule. The draft SOW provides these details and was posted on 
February 19, 1999, to GSA's website for you to review and comment on in 
response to this notice. You may access the SOW at the following GSA 
website address: http://r6.gsa.gov/fsstt/.
    GSA received comments on the July 17th Federal Register notice from 
a carrier association, two individual carriers, and two representatives 
of third party MMS providers. We have carefully considered those 
comments in further developing our MMS transition plan and drafting the 
SOW. The comments we received fall within several general groupings and 
are addressed as follows.

Underlying Basis for Transitioning MMS to the Schedule

    One respondent questioned the legal basis for GSA's decision to 
transition MMS from CHAMP to the Governmentwide Employee Relocation 
Services Schedule. The basis for our decision derives from the statute 
that authorizes transportation service providers to transport household 
goods for the U.S. Government at a rate reduced from the applicable 
commercial rate (49 U.S.C. 13712). This statute provides that only a 
carrier or freight forwarder may provide such transportation outside a 
FAR procurement--a ``broker'' does not meet the definition of carrier 
or freight forwarder for purposes of this statute (see 49 U.S.C. 
13702). Additionally, not all move management services inherently fall 
within the scope of providing transportation services (as addressed in 
greater detail below), and it is not appropriate for these services to 
remain indefinitely in CHAMP. Abrupt removal of MMS from CHAMP, 
however, would have negatively impacted the operations of some Federal 
activities since they have come to rely on these services. We therefore 
developed the approach announced in the Federal Register to allow for 
the orderly transitioning of MMS from CHAMP to the Governmentwide 
Employee Relocation Services Schedule.
    As a first step in initiating the transition, GSA asked current 
Relocation Services Schedule vendors to submit offers to provide MMS as 
part of their bundled relocation services. The next step will be to 
afford all qualified MMS providers opportunity to compete under a 
uniform set of criteria for provision of MMS as an unbundled (separate) 
service under the continuous open season for the schedule. The open 
season for real estate associated relocation services offered under the 
schedule began on March 1, 1999, and MMS will be added as a separate 
line item as soon as we receive and reconcile comments on this Federal 
Register notice.
    Many agencies wish to purchase MMS independently of other bundled 
relocation services and want a wide choice of service providers.

Service Fees

    Several respondents addressed fee issues, among them pricing of 
services under the schedule including whether the factoring of line-
haul charges into the pricing will be permitted, as well as payment of 
commissions to a carrier and whether such payments constitute a 
``kickback''.
    MMS will be offered under the schedule on a flat fee basis and will 
not include line-haul transportation because of the associated 
difficulties of determining price reasonableness. The schedule will not 
address commissions, a common commercial practice between a carrier and 
a broker.
    Concerning whether commissions constitute a kickback, the General 
Accounting Office's analysis in its PHH Homequity Corporation decision 
(B-240145.3; B-241988, February 1, 1991) placed a great deal of 
emphasis on the value of the services a broker performs compared to the 
size of the broker's commission. While the utility of such an analysis 
may be arguable, it is not the definitive analysis on what constitutes 
a kickback under the Anti-Kickback Act of 1986.
    Commissions, per se, do not constitute a kickback, and they occur 
in many different instances of GSA procurements. For example, GSA's 
contractor-issued charge card program involves a commission paid by a 
merchant to the bank that administers the charge card, and GSA's Travel 
Management Center program involves a commission paid by an airline to 
the travel agent. In neither instance does the commission paid 
constitute a kickback because the selection of the subcontractor paying 
the commission is based on criteria unrelated in any way to the size of 
the commission payment. Once it is established that a commission is not 
a kickback, there is no need to determine whether the subcontractor is 
satisfied by the commercial transaction, or to perform any complicated 
analysis of the value of the work performed by the contractor vis-a-vis 
the amount of the commission.

GSA Nonmandatory Supply Source for Transportation Services

    One respondent expressed particular concern that GSA-issued 
regulations do not correctly reflect GSA's status as a nonmandatory 
source for transportation services. GSA's Office of Governmentwide 
Policy currently is processing a regulatory change for issuance in the 
near future to reflect our status as a nonmandatory source. Because GSA 
no longer is a mandatory source, in designing and developing 
transportation programs for the Federal community, we must weigh 
customer requirements, cost reasonableness, and quality service. The 
services we offer must not only meet customer needs but also provide 
value and exceed quality expectations. Consequently, although we 
support the use of commercial best practices to the maximum extent 
possible, it is necessary for us to require the use of CHAMP 
participating carriers under the schedule. The schedule nevertheless 
will permit an MMS provider to use a commercial rate arrangement it has 
with a carrier if the arrangement results in a cost advantage to the 
shipping agency and provides the agency and the relocating employee 
CHAMP-equivalent benefits and protections, including cargo liability 
insurance/performance bond protections.

Designation of Certain Services as Either an MMS or a General 
Transportation Activity

    Three carrier respondents took issue with certain services 
historically provided by carriers as part of their routine 
transportation activities also qualifying as move management services 
when performed by an MMS provider. The cited activities associated with 
arranging and executing a household goods move are administrative in 
nature and may be performed by either. Some GSA customers are satisfied 
with carriers providing the services. Others, however, wish to 
disengage themselves from managing the services and delegate the 
responsibility to a third party. Services described in the draft SOW 
that may be provided by either are: carrier selection, shipment 
booking; storage in transit (SIT) arranging/monitoring; management 
information reports;

[[Page 15978]]

customer service; employee pre-move counseling; preparation of shipment 
documentation; on-site quality control service (at additional cost if 
provided by carrier); and claims preparation, filing, and settlement 
assistance. However, service performance audit and carrier evaluation 
would create a conflict of interest situation if performed by a carrier 
and must be performed by an MMS provider.

Meetings Re: MMS

    A third party MMS provider respondent suggested that GSA officials 
have met privately with carrier industry groups and subsequently made 
decisions that advantaged carriers and disadvantaged third party MMS 
providers. The respondent recommended that future meetings be all 
inclusive. The respondent also stated that GSA has tended to announce 
significant program changes without consulting with all groups involved 
and recommended GSA involve affected parties earlier in the change 
process.
    GSA's Transportation Management Division has met with third party 
providers as well as with representatives from the carrier industry. 
While we consider all input we do not permit meetings with individual 
groups to drive our program decisions. In the future, however, we will 
include all affected parties in industry meetings held for the purpose 
of discussing MMS program-related issues. We also will continue to 
publish proposed program changes in the Federal Register for comment by 
interested parties.

Appropriateness of Transition Plan

    Without having the benefit of transition details contained in the 
draft SOW incorporated by reference in this notice, all respondents 
expressed in varying degrees reticence to the transition plan. GSA 
believes the phased transition plan we have developed is a fair one. 
Under this plan the current Domestic Household Goods Tender of Service 
will remain in effect until October 31, 1999, and all MMS providers 
will have opportunity to compete under a uniform set of criteria for 
providing MMS as a separate service under the relocation schedule.
    GSA appreciates the interest demonstrated in our July 17th Federal 
Register notice through the comments we received, and we look forward 
to continued partnership with our customers and service providers as we 
endeavor to mold our household goods program into a model for the 
future.

    Dated: March 25, 1999.
Barbara Vogt,
Deputy Assistant Commissioner, Office of Transportation and Property 
Management.
[FR Doc. 99-8156 Filed 4-1-99; 8:45 am]
BILLING CODE 6820-24-P