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GSA Sets Policy on Household Goods Moves Agency Says New Broker Commission Guidelines Add Clarity, Level Playing Field

GSA #9439

September 15, 1997
Contact: Hap Connors
(202) 501-1231

WASHINGTON, DC - The U.S. General Services Administration (GSA) today announced new guidelines affecting the payment of broker commissions on shipments handled through its household goods program for civilian Federal agencies.

The new guidelines allow brokers to provide services if they first disclose to GSA a proposed single commission rate to be used with all carriers selected by the broker to perform work under GSA's program. Once the broker's commission rate is approved by GSA, the company is allowed to enter into commission arrangements with carriers at the established rate.

The new guidelines respond to objections by household goods carriers to a 1996 policy change that, for the first time under the program, allowed brokers to collect commissions from carriers used to furnish transportation and accessorial services on civilian Federal shipments. Before 1996, broker services were available through single award contracts only, and the Federal government paid a flat fee for the broker services.

Representatives of the carrier industry were concerned that allowing carrier commissions could lead to violations of the Anti-Kickback Act (41 U.S.C. 52), which prohibits Federal prime contractors from improperly receiving anything of value from subcontractors for the purpose of being selected to provide services.

"These new guidelines are a reasonable approach that balances the views of competing interests," said Frank P. Pugliese, Jr., GSA's Commissioner of the Federal Supply Service. "The guidelines will ensure that carriers are treated alike in commission arrangements established by each broker participating in GSA's program. The size of the commission will not be the broker's basis for carrier selection."

As a result of downsizing, some Federal agencies are seeking alternatives to in-house handling of employee relocations. Under GSA's program, brokers provide assistance with the variety of administrative tasks associated with these moves including carrier selection, service audits, employee counseling, and assisting with any claims resulting from a household goods move. Pugliese said that the change in GSA's buying strategy resulted from "a need to expand the test of these services by the Federal community and gauge the interest of relocation services companies in providing services to the Federal marketplace."

GSA's Federal Supply Service manages the household goods program for civilian Federal agencies. In Fiscal Year 1996, Federal agencies spent $60.7 million for nearly 13,000 employee relocations. Since 1994, about 4,000 moves have been conducted by brokers.