The Defense Department Inspector General has confirmed it is opening an audit into the program that moves troops' privately owned vehicles to and from overseas locations.
The audit will be performed at U.S. Transportation Command at Scott Air Force Base, Ill., and at multiple vehicle processing centers, according to a Dec. 19 memorandum from the DoD Inspector General's office. Those VPCs are where troops drop off and pick up their vehicles before and after moves to and from overseas.
"Our objective is to determine whether U.S. Transportation Command contracting personnel incorporated adequate controls to properly monitor contractor performance and to address performance concerns" on the contract, states the memo, sign by Michael J. Roark, assistant inspector general for contract management and payments. The memo was sent to TRANSCOM, the undersecretary of defense for acquisition, technology and logistics, assistant secretary of the Air Force for financial management and comptroller, and the Army auditor general.
Meanwhile, a federal judge on Wednesday signed a consent decree that that should lead to the release of 66 vehicles that have been held in Houston by a subcontractor since Dec. 11 because of a payment dispute with the troubled contractor, International Auto Logistics. The two companies came to an agreement about the payments and the release of the vehicles.
The DoD IG audit of the overall contract "will be a thorough, in-depth look at the contract and IAL's performance and is expected to take approximately seven months," said Maria McElwain, spokeswoman for Sen. Dick Durbin, D-Ill.
Durbin and Sen. Thad Cochran, R-Miss., sent a letter Oct. 28 to the Defense Contract Management Agency requesting an audit of the program, in light of the delays service members experienced in receiving their vehicles, and difficulty in contacting the contractor to get information on the location of their delayed vehicles.
The senators asked for an audit, noting that there were a number of changes in the new contract to ensure that taxpayers are protected from the costs of inadequate performance, with the promise of significant overall cost savings to the government.
They asked for an assessment of IAL's performance, and "whether there are any elements of the contract's structure that have contributed to performance issues and what remedies are immediately available — up to and including if there is cause to terminate the contract."
IAL was awarded the contract in October 2013 but because of protests filed by the previous contractor, American Auto Logistics, the contract start was delayed until May 1, during the busiest season for troops' permanent change-of-station moves.
In the following weeks and months, deliveries of some vehicles were delayed by more than a month. In August, three months after IAL took over the contract, Air Force Gen. Paul Selva, chief of U.S. Transportation Command, set up a team of experts to address the problems and closely monitor the situation.
Durbin acknowledged that Selva and his team have been working hard to bring IAL into compliance with the terms of the contract, and there have been some improvements.
"Unfortunately, for the members of our nation's armed forces who rely on this service, 'some improvement' isn't good enough," Durbin said in a statement. "As chairman of the Senate Appropriations Defense Subcommittee, I have contacted the relevant oversight agencies regarding IAL's performance."
McElwain said that in response to the senators' letter, the Defense Contract Management Agency contacted the DoD IG, which began the investigation.
Following the Dec. 17 court order related to the payment dispute that resulted in 66 vehicles being held by the subcontractor, all vehicles will be moving regularly through the system, said Amanda Nunez, an IAL spokeswoman.
"IAL is pleased with the court's order mandating [Liberty Global Logistics] serve out the remainder of their contract with IAL," she said. Liberty Global Logistics is a subcontractor that had been providing ocean carriage services for IAL.
IAL contended the vehicles were being held hostage by Liberty Global, even though there was no money due for the vehicles. The order, based on an agreement between the two companies, means that the 66 cars which had been held up since Dec. 11 are being released to IAL for delivery.
Those vehicles hadn't been in the system for a long time; IAL was scheduled to pick them up Dec. 12 for delivery to vehicle processing centers where troops would retrieve them. But IAL also must pay the nearly $4 million that both companies agree is owed to Liberty Global Logistics by close of business Friday.
A TRANSCOM spokeswoman referred questions about the 66 vehicles that were being held up to the companies involved.
The two companies have been in a payment dispute in federal court for months, and a federal judge ordered them to arbitration Dec. 5.
Liberty Global is moving the vehicles it had accepted earlier, and expects the last cars to get to IAL in January. Liberty Global has moved about 20,000 POVs for IAL, including 3,000 after the contract termination.
Court documents clearly outline Liberty Global's frustration in working with IAL. "Since the inception of the subcontract agreement between Liberty and IAL, Liberty has bent over backwards to make up for IAL's legion failures and dazzling inability to fulfill even the most basic operational requirements of its prime contract," Liberty's attorneys stated in a document filed Dec. 14.
"Liberty has fulfilled all of its obligations under the subcontractor agreement, and gone far beyond, in order to help IAL make the prime contract a success. When it became obvious that IAL could not perform and could not remedy its breaches of the subcontractor agreement, Liberty patiently complied with the 30-day termination period that ended Oct. 19, 2014."
They noted the situation has gotten worse, with IAL stopping even undisputed ocean freight payments.
Liberty is a small, family-run business that has served some of the nation's humanitarian assistance programs for nearly 30 years, and has delivered DoD cargo to Iraq, Afghanistan and other theaters.
"Now it is at the brink of financial ruin because IAL is using it like a piggy-bank and a punching bag," the attorneys stated in the documents.
But IAL's attorney, Sam Choate, said the subcontractor contributed to the problems that IAL had in moving troops' cars on time. "We certainly didn't anticipate the issues we had in the last six months. We're working through that," Choate said. "One part of that is not dealing with Liberty.
"I'm not suggesting Liberty is not a fine company. In this particular situation, this particular contract, they didn't do a good job. We believe we have claims against them. They believe they have claims against us," Choate said.
"There's no denying there were problems with the program. A big part of the program has been Liberty. We expect that moving forward, we will not have the problems."
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.
