BNUMBER:  B-280452             
DATE:  October 1, 1998
TITLE: Sample's Shipyard, B-280452, October 1, 1998
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Matter of:Sample's Shipyard

File:B-280452            
        
Date:October 1, 1998

Chris Braga for the protester. 
Richard V. Gonzales, Esq., U. S. Coast Guard, for the agency. 
Jeanne W. Isrin, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

In procurement for vessel repairs at contractor's shipyard, agency 
reasonably based distance calculation used in cost evaluation on 
longer route than route suggested by protester, where agency 
determined that shorter route would put vessel at unwarranted risk.

DECISION

Sample's Shipyard protests the award of a contract to Ocean Technical 
Services, Inc. (Otech) under invitation for bids (IFB) No. 
DTCG80-98-B-3FC799, issued by the Department of Transportation, United 
States Coast Guard (USCG) for the drydock and repair of the USCG 
cutter Vashon.[1]

We deny the protest.

The IFB contemplated award of a fixed-price, indefinite-delivery, 
indefinite-quantity contract, to be performed at the contractor's 
shipyard.  Award was to be made to the low responsive bid submitted by 
a responsible bidder.  The low bid was to be determined by adding 
extended prices for all line items to five foreseeable cost factors to 
be incurred by the USCG as a result of having the work performed at a 
shipyard other than the homepier; these would vary based on the 
location of the contractor's shipyard.  IFB  sec.  M.1(b), M.3.  The 
protest concerns one of these factors, the distance factor--$16.90 per 
nautical mile--which reflected the USCG's facility costs to navigate 
the vessel to and from the contractor's shipyard.  IFB  sec.  M.3.

Three bids were received by the May 1 bid opening.  The protester's 
total bid as submitted--before addition of the distance factor--was 
low at $292,368, while Otech's was second low at $316,954.  In 
determining the amount to be added to the bids under the distance 
factor, the agency developed a route from the homepier at San Juan, 
Puerto Rico, to each bidder's shipyard.  For the protester's bid, 
because USCG directives prohibit long ocean transits and require a 
70-percent fuel onboard state during the Atlantic Ocean hurricane 
season (June 1 through November 30), the period during which the 
Vashon was to be moved, contracting officials calculated a route which 
would keep the vessel close to land and permit frequent refueling.  
This route measured 2,442 nautical miles (one way), based on the 
ship's sailing from San Juan to Guantanamo Bay, Cuba, on to Miami, 
Florida, and then continuing up the U.S. east coast to Boothbay 
Harbor, Maine, stopping four more times to refuel.  This distance 
produced a total evaluated bid of $386,585.92, $2,499.36 higher than 
Otech's total evaluated bid, $384,086.56, and so award was made to 
Otech on    June 17.[2]  

The protester argues that the distance factor calculation for its bid 
is incorrect, because it is based on a route longer than the "most 
direct route consistent with the physical capabilities of the vessel," 
the standard on which the route was to be determined.  USCG Legal 
Memorandum at 3.  The protester maintains that the Vashon is 
physically capable of ocean transits, and therefore can sail directly 
from Puerto Rico to Fort Macon, North Carolina, refuel and continue up 
to Boston, refuel again and continue up to Boothbay Harbor.  The 
protester maintains that using this route would permit the vessel to 
maintain 50-percent fuel capacity at all times, while reducing the 
distance to approximately 2,075 nautical miles.  Basing the distance 
factor on this mileage would make the protester's evaluated bid low, 
at $374,181.32. 

We will not question an agency's determination of its needs and the 
best method of accommodating those needs unless that determination has 
no reasonable basis.  TLC Sys., B-277095, Sept. 2, 1997, 97-2 CPD  para.  61 
at 3.   

We find that the record establishes a reasonable basis for the USCG's 
determination that it would need to use the longer route to the 
protester's shipyard.  As indicated above, the choice of route was 
dictated largely by consideration of the risk to the vessel and crew.  
The agency explains that, while 110-foot cutters such as the Vashon 
are capable of deepwater operations, i.e., those which occur more than 
50 miles from land, as a matter of policy they generally are 
restricted from routine independent operations or unescorted transits 
which take them more than 200 miles from shore.  This is because their 
lack of redundant emergency systems and limited communications 
capabilities, combined with a lack of resources that can readily 
assist in an emergency, raise the inherent risk of such operations to 
what the agency considers to be an unacceptable level.  As examples of 
its application of this policy, the agency cites a request from a 
Puerto Rico-based cutter to make an unescorted transit from that 
island to Bermuda for a port call in route to a maintenance 
availability in Baltimore, Maryland, which was denied in September 
1997, and a request from a New Jersey-based cutter to transit to 
Bermuda while returning from a patrol in the Caribbean, which was 
denied in July 1998.  The protester notes, and the agency concedes, 
that 110-foot cutters have made ocean transits.  The agency states, 
however, that such exceptions are made only when dictated by 
operational needs.  For example, the agency explains, although the 
USCG cutter Adak was deployed from its homeport of Sandy Hook, New 
Jersey to Puerto Rico in July 1998, the risk was warranted because the 
vessel was acting in support of a specific operation in the Caribbean.  
The agency does not consider vessel maintenance an operational need 
that warrants the same risk.  We find no basis for questioning the 
agency's position.  The agency's policy clearly reduces risk to the 
vessel and crew, and, while exceptions have been made, there is 
nothing in the record indicating that exceptions have been made for 
purposes of transporting a vessel for drydock repair.

The Atlantic Ocean hurricane season is viewed by the USGC as 
increasing the risk to the vessel and crew even further, and is the 
principal consideration underlying the 70-percent onboard fuel 
requirement.  This amount of fuel is deemed necessary to ensure that 
the cutter will have the requisite endurance to take adequate evasive 
action before a storm's arrival, and to perform necessary relief 
operations immediately after the passage of destructive winds and 
seas.  In addition, 110-foot cutters are unable to ballast, i.e., 
steady themselves, and the 70-percent onboard fuel load provides 
weight and stability to ensure safe operations in heavy weather.  The 
protester's notes that the written directive from the Commander, 
Atlantic Area Coast Guard, requires that a 70-percent fuel load be 
maintained only by cutters in port during a level 4 (maximum force) 
hurricane, and does not directly speak to the hurricane season.  
However, the danger inherent in the hurricane season is obvious, and 
we think that, notwithstanding the absence of an express command 
directive, the agency reasonably could weigh such risks against 
perceived operational benefits.

The agency determined that the protester's proposed route was not 
viable because the distance from San Juan to Fort Macon is 
approximately 1,120 nautical miles and, based on a 15-knot speed, the 
Vashon would arrive in Fort Macon with only approximately 35 percent 
of fuel remaining.  This route would also at times place the Vashon 
more than 300 nautical miles from the closest point of land.  Since 
this route would be inconsistent with the fuel load and deepwater 
restrictions, which we have found to be reasonable, the agency 
properly declined to use this route in its distance factor 
calculations.

The protest is denied.

Comptroller General
of the United States

1. Although the IFB also solicited drydock and repair for an 
additional vessel, the USCG cutter Ocracoke, only the award with 
respect to the Vashon is at issue here.

2. The record indicates that 2,442 nautical miles may actually be a 
conservative figure because it is based on an assumption that the ship 
will be sailed through the Cape Cod Canal, as opposed to sailing 
around Cape Cod a longer route.  The protester has maintained that the 
Vashon could be sailed through the canal, because other USCG cutters 
do so.  However, the record indicates that, although cutters that 
service the Cape Cod area and are familiar with the canal use this 
route, cutters such as the Vashon, which are based in other districts, 
do not regularly use it.  In any case, the 2,442-mile figure assumes 
use of the canal.