Pentagon IG begins investigation into car shipping contract

 International Auto Logistics opened new vehicle processing centers, like this one in Mildenhall, England, when it took over the contract in May to ship servicemembers' vehicles. The company has faced criticism for late deliveries and not being able to provide accurate information about the location of vehicles.    Adam L. Mathis/Stars and Stripes
International Auto Logistics opened new vehicle processing centers, like this one in Mildenhall, England, when it took over the contract in May to ship servicemembers' vehicles. The company has faced criticism for late deliveries and not being able to provide accurate information about the location of vehicles. Adam L. Mathis/Stars and Stripes

Pentagon IG begins investigation into car shipping contract

by: Mike Fitzgerald | .
Belleville News-Democrat (TNS) | .
published: December 15, 2014

SCOTT AIR FORCE BASE, Ill. — The U.S. Department of Defense Inspector General has opened an investigation of the nearly $1 billion contract to ship servicemembers’ cars overseas.

Investigators will target the Globally Privately Owned Vehicle Contract, or GPC III, under whose auspices International Auto Logistics was chosen by the U.S. Transportation Command, which is based at Illinois' Scott Air Force Base.

The investigation began when Sens. Dick Durbin, D-Ill., and Thad Cochran, R-Miss., contacted the Defense Contract Management Agency in October to request an audit of the shipping program.

The senators’ request for the audit came after a swelling tide of complaints over the summer from International Auto Logistics customers in Illinois and the rest of the nation. The customers were upset about vehicles shipped home after military tours overseas that were either missing, arriving months later than promised or mysteriously damaged.

Amanda Nunez, an International Auto Logistics spokeswoman, said the company “has worked tirelessly to clear any backlog” of undelivered vehicles, while also ensuring that new vehicles coming into the system are delivered on time.

The defense contract agency contacted the Pentagon Inspector General, whose probe of the contract and International Auto Logistics’s performance and is expected to take about seven months, according to a spokeswoman for Durbin’s office.

Durbin issued a statement Friday in which he noted that Gen. Paul Selva, Transcom’s commander, and a Transcom team set up to help fix International Auto Logistics’ woes, have been working hard to bring the firm’s contract into compliance, and that improvements are being seen.

“Unfortunately, for the members of our nation’s armed forces who rely on this service, ‘some improvement’ isn’t good enough,” Durbin wrote.

Meanwhile, Selva has given International Auto Logistics, or IAL, a Feb. 1 , 2015, deadline to devise a plan for handling the upcoming summer surge of car shipments — and avoid the costly missteps that have plagued the contractor and its many frustrated customers since May.

The company’s biggest problems have centered on its failure to meet required delivery dates for the shipment of thousands of military members’ privately owned vehicles overseas and back. The problems cropped up soon after IAL took over the contract, and ballooned this past summer, when nearly half of all Defense Department car deliveries to overseas duty stations take place.

“That will be IAL’s job, to convince Gen. Selva they are performing acceptably at that point and that they have the ability to perform as the demand increases. That will be their challenge,” said Air Force Col. Marty Chapin, the director of the specially formed “fusion cell” team set up to untangle IAL’s woes.

So far, U.S. Transcom’s Inspector General has received and resolved 1,444 complaints regarding IAL’s service from active duty military personnel and civilian Defense Department employees, Transcom figures show.

Chapin, of the Transcom fusion team, agreed that International Auto Logistics’ performance has been improving, but still has a way to go.

“Customs in particular has been an issue for them,” Chapin said. “They’ve known that, we’ve talked to them about it. And they’ve put a number of fixes in place to try to improve their customs process. They still have work to do on customs, as well as a number of other areas.”

Another major source of frustration was International Auto Logistics’ many failures to communicate with bewildered and stressed-out troops looking for their cars.

During an address to military journalists earlier this month, Selva said International Auto Logistics’ performance has “improved markedly,” with its November on-time delivery rate for vehicles reaching the “mid-60 percent” figure, though the contract with Transcom calls for a 98 percent rate of making deliveries by the required delivery date.

Selva, however, made clear that his patience, after being tested for the past six months, was coming to an end.

“We will do an assessment of that surge plan and determine whether or not we believe — based on what we’ve learned about their capacity and their ability to operate inside the contract — about whether they’ve put a plan in place that’s sufficient to get them through the summer surge,” according to a Military Times article.

Selva declined to say if he would push for the termination of International Auto Logistics’ contract if the plan IAL comes up with fails to pass muster.

“In two months’ time, IAL has cleared over 80 percent of outstanding vehicles and months ago after continued conversations with Transcom about the unusually high 2014 volume agreed to put together a surge plan for 2015,” Nunez said in a statement.

But International Auto Logistics’ many unhappy customers, who have vented their complaints on a Facebook page that has evolved into a conduit for their anger and concerns, remain skeptical that International Auto Logistics will be held to account by Transcom.

So far 4,500 people are members of the Facebook page, with more than 2,000 affixing their names to an online petition to revoke International Auto Logistics’ contract with Transcom immediately.

“They may be better with the most recent car transports but for us who had our cars shipped during the summer nothing has been resolved. We are still fighting for them to pay the damages that they have caused to our cars,” wrote Nichole Yohn-Schultz in response to a reporter’s query.

Jessica Wakefield-Taylor wrote on the same Facebook page that “the bottom line is that the military/government is all about going with the lowest (cheapest) bidder. I’ve seen it happen multiple times, and in the end it’s the service members, their families and DoD employees that end up paying the price and suffering.”

IAL’s job amounts to “a very complex and long supply chain,” said Chapin, the fusion team director. “There are a lot of moving parts. And so analyzing individual parts has taken time, but those are the individual things we see.”

Chapin noted that International Auto Logistics faces potentially steep financial penalties for failing to deliver customer cars on time, including paying the Defense Department $30 per day, for up to seven days, for each day the car is delivered late. After that, IAL could be liable for costs racked up by customers, including rental car fees and hotel bills.

In early August, in response to a groundswell of complaints, Selva ordered Transcom to set up a special 12-person “fusion cell” team consisting to logistics and supply chain experts.

The team mission was to help IAL unravel the problems behind IAL’s inability to track thousands of privately owned vehicles being shipped to the United States from Europe and Hawaii.

Both Transcom and International Auto Logistics have blamed IAL’s problems on a six-month delay caused by protests and appeals filed by the previous contractor, American Auto Logistics.

When IAL finally took over the contract, on May 1, it was in the midst of the peak season for the shipment of service members’ vehicles.

In late August, Selva took the extraordinary step of ordering six survey teams from Transcom to visit ports in Germany, Hawaii and four sites in the continental United States to inventory the vehicles on hand.

A month later, after visits by inspectors to the overseas ports, Transcom reported that the on-time delivery of military members’ privately owned cars had improved sharply.

Even so, plenty of complaints persisted, especially from military members who had entrusted their cars to IAL before Aug. 1.

©2014 the Belleville News-Democrat (Belleville, Ill.)

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