USTC J9 COVID-19 "Conditions Based" Movement Call (21 July)
The USTC J9 call on Tuesday (21 July) started out with a discussion about Section 889 of the 2019 National Defense Authorization Act (NDAA) with USTC’s Director of Acquisition, Kenneth Brennan. Brennan is leading USTC’s effort on the implementation of Sec 889.
As a quick refresher, Sec 889 deals with the prohibition for the US Government to contract with companies who use prohibited technologies from five specific Chinese companies and their subsidiaries (IAM has put out info on this topic in the past, but I highly recommend you google it and get familiar with the requirements). Part B of Sec 889 is set to take effect 13 August 2020. We asked about the impact of the 13 Aug date on DP3 TSPs last week, and Mr. Marsh stated he was following the topic, but didn’t have insight yet from OSD. Therefore, J9 asked Mr. Brennan to address the topic.
Brennan started by saying the implementation of Part B frankly caught the DoD off-guard; but that using these IT companies present a real security risk; ties into intelligence concerns; and the government/DoD will definitely move forward with implementation of Sec 889. There will be a waiver process available (undefined), but the intent would very limited in nature. So Sec 889 is coming. Just how it gets executed by DoD is still being defined…even though implementation is 13 August. Mr. Brennan stated he expects no delay in the implementation date…no relief from the requirement is expected.
A number of questions were asked of Mr. Brennan and he did a nice job of presenting what he knew. He stated the intent of the law is that the certification by contractors they are not using prohibited technologies is intended to be transaction by transaction. I’m not exactly certain how that would be executed. But he stated USTC sees that as very problematic in the transportation world; and therefore are trying to come to some ability to certify over a time period.
We asked if he envisioned that the certification might be a part of next year’s solicitation of rates for 2021? Could it be added to the TOS or 400NG/IT20; and that TSPs have to certify then they don’t use prohibited technology? He stated they are working through that, but he could envision it that way. This might be a best-case scenario for TSPs. It would allow companies time to research whether they are using prohibited technology; and adjust if needed between now and signing next year’s TOS.
Sec 889 refers to “contracts” and “contractors”. When asked if DP3 TSPs were considered contractors in this sense, Mr. Brennan stated that it was heavily discussed, but that OMB, who heads the implementation of this law for the government, has taken a very broad interpretation of what is meant by the term contractor, and therefore, DP3 TSPs are definitely defined as a contractor under this law.
We asked during the call whether the government/DoD would put out a list of prohibited technology products/brands, to give TSPs a sense/examples of what is prohibited. Mr. Brennan said there is nothing like that out there yet. He wasn’t certain if that was being considered. (Side note: on a call with GSA, they specifically mentioned the government would not put out a list; and that the contractors would be solely responsible for ensuring/certifying no prohibited tech is being used. We’ll see what DoD says.)
When asked whether Sec 889 prohibitions are on just hardware; or whether software was included, Brennan said he believed it was associated with hardware, but would ask the question to be certain.
The rest of the call focused on slides, data, and latest updates.
- Slide 1 shows a 4-week shipment forecast by Branch of Service. Week 31 shows shipments in all statuses in DPS over 10,000 shipments. Whether those will result in actual pickups remains to be seen.
- Slide 1 also shows some growth in aged invoices; particularly, the Coast Guard in Miami continues to increase. IAM has engaged the USCG on this rise. They have lost manpower who were working invoices, but are trying to get additional people trained to support this effort.
- Slide 2 shows a continued downward trend in refusals and blackouts. The drop in refusals is seen as a good news story; and J9 mentioned they appreciated industry not over relying on refusals; and these efforts are helping optimize capacity through the balance between refusals/blackouts and shipment awards.
- Offer handling time is also very good; and likely shows the increase in short fuse offers/expansion to 10 days.
- J9 mentioned the recent advisory extending both short fuse expansion along with refusals to the end of August.
- Slide 4, punitive actions, shows that while there are fewer suspensions this year due to performance actions, there are suspensions based on COVID policy compliance. Still have suspensions based on face covering non-use and failure to complete the health protections protocol certification.
- Per J9, we should see updates to the 400NG and IT20 with the air surcharge and reweigh clarification. J9 stated they were clarifying the 7,000lbs reweigh requirement will be just for OCONUS to CONUS; and the reweigh table would apply otherwise. I asked for clarification, stating from what I understand, for OCONUS to CONUS, the reweigh table applies for those grades with thresholds below 7,000lbs. And 7,000lbs applies to all other grades. And that for CONUS to OCONUS and OCONUS to OCONUS, the reweigh table applies. I was told, “yes”. But we should see the clarification come out soon.
- IAM asked J9 to consider extending the 10-day delivery out of SIT beyond 15 August as is currently in the business rules. J9 asked for how long. I replied it should be based on when volumes come down to “normal” post peak season levels that we would see in previous years.
- J9 was asked for insight on expected NTS shipment volume. We were told they are working on providing that data.
- We asked about advisory #20-0061, Robotic Process Automation (TSP bots) and an August deadline dealing with TSP bot use once TEAMS was fully functional. The DPS Program office stated they planned to push implementation of this bot policy to “after peak season”; likely in November. And an advisory is due out shortly with the details.
- J9 reiterated they would hold a virtual PPF in mid-September; details due out soon. Will be interested in lessons learned from this unique peak season.
- IAM asked DoD to consider taking information from whatever central repository DoD has to capture COVID-19 cases of its members, and having it cross-referenced with PCS orders to identify exposures that might’ve slipped through the cracks where TSPs were not notified of the positive test because PPSOs were maybe unaware. J9 acknowledged they need to be proactive in ensuring TSPs are notified of potential exposure to COVID from service members and families; but did not endorse the concept.