USPS privatisation would change the dynamics of rocky US final-mile landscape
The US parcel market is facing the prospect of considerable upheaval in the coming year, ...
FDX: ABOUT USPS PRIVATISATIONFDX: CCO VIEWFDX: LOWER GUIDANCE FDX: DISRUPTING AIR FREIGHTFDX: FOCUS ON KEY VERTICALFDX: LTL OUTLOOKGXO: NEW LOW LINE: NEW LOW FDX: INDUSTRIAL WOESFDX: HEALTH CHECKFDX: TRADING UPDATEWMT: GREEN WOESFDX: FREIGHT BREAK-UPFDX: WAITING FOR THE SPINHON: BREAK-UP ALLUREDSV: BREACHING SUPPORTVW: BOLT-ON DEALAMZN: TOP PICK
FDX: ABOUT USPS PRIVATISATIONFDX: CCO VIEWFDX: LOWER GUIDANCE FDX: DISRUPTING AIR FREIGHTFDX: FOCUS ON KEY VERTICALFDX: LTL OUTLOOKGXO: NEW LOW LINE: NEW LOW FDX: INDUSTRIAL WOESFDX: HEALTH CHECKFDX: TRADING UPDATEWMT: GREEN WOESFDX: FREIGHT BREAK-UPFDX: WAITING FOR THE SPINHON: BREAK-UP ALLUREDSV: BREACHING SUPPORTVW: BOLT-ON DEALAMZN: TOP PICK
When the US Postal Service looked to roll out a security programme using sniffer dogs to detect explosives in air mail, the competition to provide the canines proved to be ‘dog eat dog’, according to a series of court cases.
Dogs are playing an increasingly important role in US air cargo security; as the director of the Airforwarders’ Association, Branon Fried, told The Loadstar last year: “Dogs will detect things a piece of technology can’t.”
As a result, a host of companies have launched operations in canine security and competition is fierce.
The USPS recognised canine potential for mass-security in 2019 when it conducted a pilot test of its 3PK9-C program to screen mail carried by plane.
Upon successful completion, the USPS delivered a presentation to airlines and looked for a four-year contract for “canine explosive detection and alarm services”, contacting seven potential bidders from the TSA’s list of Safety Act certified organisations, including Global K9 (GK9), American K9 (AMK9) and Michael Stapelton Associates (MSA).
Each submitted a proposal for combined 3PK9-C and alarm resolution services, with MSA ultimately recommended for the contract.
This, however, ignited a ‘dog fight’, in which AMK9 and GK9 both submitted a disagreement with the USPS on grounds of “clear organisational conflict of interests that should have warranted MSA’s removal from consideration for award”.
They said USPS had worked with MSA to create the pilot programme, featured MSA “heavily” in its presentation to the airlines and continued to consult with MSA to develop the 3PK9-C program. USPS had described MSA as being “instrumental” in that development.
A court document detailed that, in its consulting role, MSA obtained a list of intended USPS locations, mail volumes and required hours, which, AMK9 and GK9 argued, gave MSA “distinct advantages”.
They also disputed the USPS decision to combine several requirements into one procurement, which they claimed also benefited MSA.
The rival dog companies also expressed concern about a former government employee, Christopher Shelton, who until October 2019, was supervisory air marshal in charge of the TSA Canine Training Center, and was involved in the screening programme. He left the TSA to manage MSA’s air cargo business, raising concerns of a conflict of interest.
The USPS took corrective action by shortening MSA’s contract by one year and cancelling all renewal options for the contract. It also issued two new solicitations, one for canine screening services and one for alarm resolution services. It awarded canine screening contracts to MSA and AMK9, and a third-party service and the alarm resolution contract to MSA.
But GK9 and AMK9 argued that the USPS corrective action failed to address “MSA’s immitigable conflict of interests that should have resulted in MSA being disqualified from the competition”.
The court ruled “it had no choice but to prohibit MSA and ask the USPS to reevaluate the solicitation in a manner that does not violate its supplying principles and practices”.
The new USPS must therefore phase-out using MSA.
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