Last week it was reported in some outlets that The Suddath Companies filed a lawsuit against TRANSCOM’s GHC rollout. We reached out to Suddath for a statement, they provided the following:
“Suddath has proudly and effectively moved military families around the globe for more than 75 years. We believe Suddath can meet TRANSCOM’s Global Household Goods needs better than anybody. We have filed a Complaint in which we seek nothing more than the free and fair opportunity to compete to become TRANSCOM’s trusted partner to move military families.”
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Thumbs Down to Government-Created Monopolies, Thumbs Up to Competitive Markets
There’s been a lot of focus over the last few months regarding the delayed implementation of the Global Household Goods Contract (GHC), and rightfully so. We think it’s also important to remind everyone of another critical flaw: This contract grants the winner a “too-big-to-fail” monopoly.
It has also created the largest entity providing moving services to the rest of the world. The opportunity for abuse of that power is doubled because unlike in the civilian world, the volume of DOD moves stays steady no matter the overall state of the economy or housing market – with more than 300,000 moves occurring each year.
It’s natural for the prime contracting entity – no matter who it is – to want to increase its profits. It’s not out of the question to have fundamental forward-thinking to leverage the DOD volume to move into other moving industry verticals like national accounts, residential, GSA, DOS, and local COD moves. However, even though these are reasonable growth strategies for any business, the market position allowing them to do this hasn’t been earned in the market – rather, it has been granted by the government.
America should favor government contracting that supports competition. The nation can do that in the moving industry by giving more work to companies that earn it by achieving high levels of customer satisfaction. The government shouldn’t put its thumb on the scale to determine market outcomes, essentially picking winners and losers with the public’s tax dollars.
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