Subcontractor wants out of POV shipping contract; hearing set for Thursday
A key subcontractor wants to stop shipping troops’ privately owned vehicles for the Department of Defense, further threatening a system that has been plagued by long delays and complaints from troops.
A U.S. District Court on Sunday enjoined Liberty Global Logistics of Lake Success, N.Y., to stick to its agreement to ship vehicles to and from Europe. Liberty is a subcontractor to Brunswick, Ga.-based International Auto Logistics, which in May took over a DOD contract to ship the personal vehicles of servicemembers and DOD civilian employees.
The temporary injunction will be the subject of a Thursday hearing at the U.S. District Court for the Southern of Georgia, Brunswick Division.
Liberty, of Lake Success, N.Y., has questioned whether International is financially capable of servicing a contract it won in May to ship the personal vehicles of DOD personnel when they transfer duty stations. In documents filed with the court by International, Liberty said that International had taken out an $8 million line of credit last year, which expired in July.
Liberty had previously complained about more than $3 million in late payments from International, according to the documents.
“As a result of our conversations over the last three weeks … it has become clear to (Liberty) that it can no longer provide such considerable sums of money for obligations which are (International’s) ultimate responsibility,” Liberty wrote in an Oct. 15 email to International.
International said in its filing with the court that it paid more than $5 million to Liberty after it was notified that Liberty sought to end the contract. International said they believed Liberty’s invoices were incorrect, but paid to demonstrate their willingness to work with the company.
International has faced numerous complaints for late deliveries, but it is unclear how much those have cost the company. U.S. Transportation Command has said federal regulations prohibit the command from releasing delivery statistics. TRANSCOM did say that International is liable for expenses, such as car rental fees, incurred by servicemembers when vehicle deliveries are late.
Amanda Nunez, a spokeswoman for International, did not contact Stars and Stripes before deadline Wednesday regarding a request for an interview.
International is also facing pressure on Capitol Hill about its failure to deliver vehicles on time. Sen. Mark Warner, D-Va., met with U.S. Air Force Gen. Paul Selva, head of TRANSCOM, on Monday told him that the agency should consider terminating the IAL contract if performance does not improve.
Warner said Wednesday that the subcontractor’s attempt to quit does not bode well for the already troubled shipping system.
“This is yet another example of why I am losing confidence in this contractor’s ability to fulfill its obligations to our military families,” Warner told Stars and Stripes in an email.
Earlier this month, a TRANSCOM spokesman said a decision to end the contract for cause is not “based on a single area of contract performance.”
“Before USTRANSCOM considers terminating this contract, it must first conclusively establish performance metrics have not been met, and that nonperformance is the fault of the contractor,” the spokesman said in an Oct. 10 email. “IAL has only performed for a limited time period, during peak moving season, and after starting earlier than the contract required.”