BNUMBER: B-280452
DATE: October 1, 1998
TITLE: Sample's Shipyard, B-280452, October 1, 1998
**********************************************************************
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.