Surface Deployment and Distribution Command Hawaii/Guam Shipping Agreement

摘要

We began this audit as a result of information obtained during our audit of United States Transportation Command Compliance with DoD Policy on the Use of Commercial Sealift, (DoD Inspector General Report No. D-2007-105, June 21, 2007). Specifically, we obtained information at the Military Surface Deployment and Distribution Command (SDDC) that indicated DoD is not obtaining the most economic rates for shipments between the West Coast of the United States (West Coast) and the islands of Hawaii and Guam because those shipments are not procured through competitive procedures. Historically, the United States Transportation Command and SDDC excluded shipments between the West Coast and Hawaii and Guam from Federal Acquisition Regulation (FAR) contracts due to congressional concerns that a head-to-head competition of a FAR contract might restrict the commercial carrier support to the islands and increase commercial rates, as a result of the decrease in DoD revenue. In the past, SDDC allowed the two main carriers serving Hawaii and Guam to file noncompetitive tariffs. The tariff rates were essentially the same for each carrier. The majority of SDDC shipments are covered under the Regional Domestic Contract or the Universal Service Contract, which are both FAR contracts. Shipments originating from the continental United States are covered under a Regional Distribution Contract and foreign shipments are covered under a Universal Service Contract. As an alternative to utilizing commercial tariffs for shipments between the West Coast and Hawaii and Guam, SDDC developed the Surface Deployment and Distribution Command/Carrier Freight Ocean Traffic Uniform Agreement for Hawaii/Guam. This agreement went into effect on March 1, 2007, and provides carriers with standard guidance for moving cargo by vessel shipments between the West Coast and Hawaii and Guam.