BNUMBER:  B-279014 
DATE:  April 23, 1998
TITLE: P&R Water Taxi, Ltd., B-279014, April 23, 1998
**********************************************************************

Matter of:P&R Water Taxi, Ltd.

File:     B-279014

Date:April 23, 1998

Devon E. Hewitt, Esq., Shaw Pittman Potts & Trowbridge, for the 
protester.
George L. Sogor, for Admiral Towing and Barge Company, an intervenor.
Alan W. Mendelsohn, Esq., Samuel A. Novello, Esq., and Michelle C. 
Simms, Esq., Department of the Navy, for the agency.
Linda S. Lebowitz, Esq., Office of the General Counsel, GAO, 
participated in the preparation of the decision.

DIGEST

General solicitation provision requiring offerors to comply with 
United States Coast Guard (USCG) regulations did not require that an 
offeror's proposed tugs be USCG-inspected prior to award in order to 
be eligible for award; rather, compliance with this general provision 
is a matter of contract administration.

DECISION

P&R Water Taxi, Ltd. protests the award of a contract to Admiral 
Towing and Barge Company under request for proposals (RFP) No. 
N00033-97-R-1005, issued by the Department of the Navy, Military 
Sealift Command, for the charter of three tractor-like tugs[1] to 
provide ocean towing services.  P&R maintains that the low-priced 
proposal of Admiral was not eligible for award.

We dismiss the protest.

The RFP, issued on July 23, 1997, provided that the award would be 
made to the responsible offeror whose technically acceptable proposal 
represented the best overall value to the government.  In determining 
the best value, the RFP stated that an offeror's evaluated price would 
be considered more important than technical merit.  In determining 
technical acceptability, the RFP stated that proposals would be 
evaluated based on the minimum technical requirements as contained in 
the solicitation.

Section C of the RFP contained the statement of work and 
specifications.   Section C3 provided that the tug "[o]wner warrants 
that the Tug performing under this Charter shall be in full conformity 
with the following specifications, in addition to all other 
requirements of this Charter from the time of delivery and during the 
currency of this Charter."  Among the listed specifications, under 
section C3.1(a), the owner was to warrant that the tug was as 
described in Attachment J2, captioned "Tug Particulars."  Under 
section C3.1(c), the owner was to warrant that the tug "shall be in 
full compliance with . . . all applicable laws, regulations, and other 
requirements of the United States including all U.S.C.G. [United 
States Coast Guard] regulations."  The RFP, as initially issued, 
required tugs to be capable of transporting a maximum of 16 
persons.[2]

In amendment No. 0002, in response to an offeror's question concerning 
the issue of tug inspection at the time of award for newly constructed 
tugs, the agency stated that the tug characteristics submitted in an 
offeror's technical proposal would be reviewed to ensure that they met 
the RFP requirements.  Referencing section H1.1 of the RFP, the agency 
stated that "these submissions are warranties of the tug['s] 
performance and must be met when the tug is delivered. . . . Upon 
completion of the tug['s] construction, and at any time after 
delivery, the Government may elect to conduct an inspection of the 
tugboat to ensure its compliance with the warranties offered."  This 
amendment also directed offerors to contact the appropriate Officer in 
Charge of Marine Inspection to ensure that the proposed tugs satisfied 
USCG requirements.

Amendment No. 0003, section C3.1(e)2, required that "[t]ugs shall be 
USCG inspected vessels."  The basis for this inspection requirement 
was a USCG memorandum stating that the carriage of 16 persons would 
require the use of USCG-inspected tugs.  Subsequently, amendment No. 
0005 reduced the personnel carriage requirement from 16 to 12 persons 
and removed the USCG inspection requirement.  Amendment No. 0005 now 
required that proposed tugs be classed by a recognized classification 
society and reminded offerors of the regulatory compliance requirement 
in section C3.1(c) (offeror's warranty that the tug shall be in full 
compliance with all applicable USCG regulations).

Several firms, including P&R and Admiral, submitted proposals.  P&R 
proposed newly constructed, USCG-inspected tugs.  Admiral proposed 
newly constructed tugs which would not be USCG-inspected.  The 
proposals of P&R and Admiral received overall highly satisfactory 
technical ratings for meeting the minimal technical requirements of 
the RFP; their respective management plans were determined adequate; 
and each firm received an outstanding past performance rating.  
Admiral submitted the low evaluated price and P&R submitted the second 
low evaluated price.  The agency determined that the proposals of 
Admiral and P&R were essentially technically equal.  Because price was 
more important than technical merit under the RFP, the agency 
determined to award a contract to Admiral, the responsible offeror 
whose low-priced, technically acceptable proposal was deemed to 
represent the best value to the government.

P&R argues that Admiral's proposal for newly constructed, uninspected 
tugs was not eligible for award because USCG inspection of tugs was a 
mandatory minimum technical requirement based on language in section 
C3.1(c) of the RFP which requires compliance with USCG regulations.  
More specifically, P&R notes that Admiral completed Attachment J2, 
submitted with its proposal, by stating that the gross tonnage for 
each uninspected tug would be 99 gross tons.  With reference to 
specific USCG regulations which were not included in the RFP, P&R 
points out that towing vessels need not be USCG-inspected if they are 
100 gross tons or over, for which they may carry up to 12 persons, or 
if they are less than 100 gross tons, for which they may carry up to 6 
persons.  In light of these specific regulations, P&R maintains that 
Admiral's proposed uninspected tugs, at 99 gross tons apiece, will not 
be able to carry 12 persons as required by the RFP.  P&R maintains 
that Admiral's proposal therefore is technically unacceptable because 
Admiral's proposed tugs do not comply with the 12-person minimum 
technical requirement of the RFP.

The agency's position is that while the RFP required proposed tugs to 
be able to carry 12 persons, there was no specific requirement for 
USCG inspection (as noted above, such a requirement was included in 
amendment No. 0003 for the carriage of 16 persons, but was deleted in 
amendment No. 0005 when the requirement was reduced to 12 persons) and 
section C3.1(c), requiring compliance with general USCG requirements, 
involves a matter of contract administration for which our Office does 
not have jurisdiction.  We agree with the agency.

A solicitation provision which generally requires that offerors comply 
with federal, state, and local laws and regulations places 
responsibility for obtaining necessary licenses and permits upon the 
contractor.  This is not a matter of technical acceptability or 
responsibility and the agency need not consider whether such licenses 
or permits have been obtained in determining an offeror's eligibility 
for award.  Rather, the need for a license or permit to perform the 
contract is left to be resolved by the offeror and the licensing 
authority.  Jekyll Towing and Marine Servs. Corp., B-199199, Dec. 2, 
1980, 80-2 CPD  para.  413 at 6.[3]  Thus, an allegation that an awardee 
might provide nonconforming items based on a general solicitation 
provision requiring regulatory compliance is a matter of contract 
administration, which is within the discretion of the contracting 
agency, not our Office.  Bid Protest Regulations, 4 C.F.R.  sec.  21.5(a) 
(1997); see Impact Instrumentation, Inc., B-217291, Feb. 26, 1985, 
85-1 CPD  para.  240 at 3.

Here, section C3.1(c) of the RFP constitutes a general requirement 
which merely charges the contractor with responsibility for complying 
with USCG regulations, including USCG inspection requirements.  The 
RFP, as amended, requires that proposed tugs be able to carry 12 
persons, but contains no specific provision requiring USCG-inspected 
tugs prior to award.  An offeror, like Admiral, was not required to 
propose USCG-inspected tugs in order to be eligible for award, and no 
evidence of USCG inspection was required at the time of award.  While 
Admiral's proposal, based on information included in its Attachment J2 
and when read in conjunction with specific USCG regulations, may have 
indicated that the firm's proposed uninspected tugs could not carry 12 
persons, Admiral's ultimate compliance with the general regulatory 
compliance language in section C3.1(c) is not necessary until the time 
of contract performance.[4]  In other words, at the time of contract 
performance, if Admiral's newly constructed tugs are 99 gross tons, 
then in accordance with USCG regulations, Admiral's tugs would have to 
pass USCG inspection in order to be able to legally carry 12 persons.  
This will be a matter for the agency to resolve as part of its 
administration of Admiral's contract.

Accordingly, we have no basis to disturb the award to Admiral, the 
low-priced, technically acceptable, responsible offeror.

The protest is dismissed.[5]

Comptroller General
of the United States

1. A "tractor-like tug" is a tugboat equipped with a special 
propulsion system allowing the tug to push or to pull other vessels in 
all directions.

2. This number excludes the tug master and crew.

3. Where, however, there is an express solicitation requirement that 
an offeror hold a particular license or permit, compliance therewith 
is a matter of an offeror's responsibility.  Jekyll Towing and Marine 
Servs. Corp., supra.

4. This view is consistent with RFP language contemplating post-award 
compliance, for example, section C3 of the initial RFP which requires 
an offeror's compliance with the specifications "from the time of 
delivery and during the currency" of the contract, and amendment No. 
0002 which requires proposal submissions to be met "when the tug is 
delivered."

5. There also is a question whether the RFP requires the carriage of 
cargo and therefore the use of USCG-inspected tugs.  The agency's 
position is that the carriage of cargo is not contemplated by the 
terms of the RFP, and therefore, USCG-inspected tugs are not required.  
However, reading P&R's argument in the most favorable light--that the 
terms of the RFP do require the carriage of cargo--whether Admiral's 
proposed uninspected tugs will, in fact, be able to legally carry 
cargo is also a matter of contract administration for which the above 
analysis is equally applicable.