Keystone Ship Berthing, Inc., B-289233, January 10, 2002

B-289233 Jan 10, 2002 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Where layberth services are critical to maintaining the mission readiness of ships. The agency reasonably included in the solicitation a risk allocation clause that serves as an incentive to the contractor to anticipate contingencies and to act in a manner that will minimize any disruptions in contract performance. The LMSRs are normally maintained at a reduced operating status at layberths for extended periods until deployed. KSB maintains that the RFP's reduction in contract clause is directly contrary to. The per diem rate specified in Section B shall be reduced for each day that the facility is unfit or the Contractor has failed to comply with requirements set forth above and elsewhere in this contract. View Decision Keystone Ship Berthing, Inc., B-289233, January 10, 2002 DIGEST Attorneys DECISION Keystone Ship Berthing, Inc. (KSB) protests the "reduction in contract" clause included in request for proposals (RFP) No. N00033-01-R-5300, issued by the Department of the Navy, Military Sealift Command (MSC), for fixed-price, per diem layberth services for seven Large Medium Speed Roll-On, Roll-Off (LMSR) government-owned, contractor-operated vessels that provide sealift capacity for unit equipment, including vehicles and rotary wing aircraft, in support of Army divisions and other units. The LMSRs are normally maintained at a reduced operating status at layberths for extended periods until deployed. KSB maintains that the RFP's reduction in contract clause is directly contrary to, and in effect nullifies, provisions in the Federal Acquisition Regulation (FAR) addressing post-award contract administration matters. We deny the protest. The RFP, issued on July 10, 2001, included the following clause: H-3 REDUCTION IN CONTRACT (a) In the event that the layberth becomes unfit for the safe berthing of the vessel, or the Contractor becomes unable to control access to or security of the facility for any reason not due to the fault of the Government or the Government's contractors, or in the event the contractor fails to maintain the facility to the standards required by the terms of this contract, the per diem rate specified in Section B shall be reduced for each day that the facility is unfit or the Contractor has failed to comply with requirements set forth above and elsewhere in this contract, by an amount to be determined by the Contracting Officer to reflect the reduced value of the services provided under this contract or to reflect the reduced value of the facility to the Government. In no event will the amount of the reduction exceed the contractor's per diem as specified in Section B of this contract. In the event that the pier becomes unsafe or unusable and the Government is required to move the vessel(s) to a safe berth, not due to the fault of the Government or the Government's contractors, payment of the per diem rate specified in Section B of this contract shall cease entirely until such time as the pier becomes safe and the vessel is able to resume layberth at the pier. All costs associated with such a move, including the cost of the replacement layberth shall be for the account of the Contractor. RFP at 46. KSB, which is currently providing layberth services to MSC in Baltimore, Maryland, under a contract containing clause H-3, argues here that clause H-3 is directly contrary to, and in effect nullifies, the termination for default clause at FAR Sec. 52.249-8(c), which provides that "the [c]ontractor shall not be liable for any excess costs if the failure to perform the contract arises from causes beyond the control and without the fault or negligence of the [c]ontractor." /1/ FAR Sec. 52.249-8(c) lists nine examples of causes beyond the control and without the fault or negligence of the contractor that would excuse the contractor's failure to perform; these examples are as follows: acts of God or of the public enemy; acts of the Government in either its sovereign or contractual capacity; fires; floods; epidemics; quarantine restrictions; strikes, freight embargoes; and unusually severe weather. KSB maintains that under clause H-3, MSC will be able to monetarily penalize a contractor for occurrences which are beyond the control and without the fault or negligence of the contractor and which would otherwise excuse a contractor's failure to perform under the FAR termination for default clause. Hearing Transcript (Tr.) at 15. KSB believes that the RFP's reduction in contract clause is unduly burdensome on competition since it requires a contractor to assume the risk of nonperformance under circumstances that would otherwise excuse a contractor from having its contract terminated for default. The determination of the needs of the government and the best method of fulfilling those needs is primarily the responsibility of the contracting agency.