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

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