B-309955, Nautical Engineering, Inc., November 7, 2007

B-309955 Nov 07, 2007 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Nautical Engineering, Inc. (NEI) protests the terms of request for proposals (RFP) No. HSCG85-07-R-6253PM, issued by the Department of Homeland Security (DHS), U.S. Coast Guard, for maintenance and repair of Coast Guard cutters based in Alameda, California. NEI contends that the RFP violates the Small Business Act by improperly bundling two types of maintenance and repair services that were previously provided under separate smaller contracts. The protester also contends that the consolidation of these services violates the Competition in Contracting Act of 1984 (CICA). We deny the protest. View Decision B-309955, Nautical Engineering, Inc., November 7, 2007 Decision Matter of: Nautical Engineering, Inc. File: B'309955 Date: November 7, 2007 Jacob B. Pankowski, Esq., John J. Field, Esq., and Marisa Miller, Esq., Nixon Peabody, LLP, for the protester. John J. Ralston, Esq., U.S. Coast Guard, for the agency. Jonathan L. Kang, Esq., and Ralph O. White, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protest challenging consolidation of requirements previously provided under separate small contracts as improper bundling under the Small Business Act is denied where agency reasonably demonstrates that measurably substantial benefits to the government justify the consolidation. 2. Protest challenging consolidation of requirements as a violation of the Competition in Contracting Act is denied where agency demonstrates that the consolidation is reasonable. DECISION Nautical Engineering, Inc. (NEI) protests the terms of request for proposals (RFP) No. HSCG85-07-R-6253PM, issued by the Department of Homeland Security (DHS), U.S. Coast Guard, for maintenance and repair of Coast Guard cutters based in Alameda, California. NEI contends that the RFP violates the Small Business Act by improperly bundling two types of maintenance and repair services that were previously provided under separate smaller contracts. The protester also contends that the consolidation of these services violates the Competition in Contracting Act of 1984 (CICA). We deny the protest. BACKGROUND The U.S. Coast Guard Maintenance and Logistics Command Pacific (MLCPAC) is the organization responsible for maintenance and logistics support for all Coast Guard missions throughout the Pacific Area. The solicitation seeks proposals to provide maintenance and repair services for three 378-foot Coast Guard high endurance cutters based in Alameda, California. This class of ship is generally referred to by the hull classification initials WHEC.[1] The WHEC cutters require periodic maintenance and repair services in two forms: (1) –dry dock— services, wherein the ship is removed from the water at a certified contractor facility, and (2) dockside services, wherein work is performed on the ship while it remains in the water. The cutters receive maintenance and repair service during scheduled –availabilities— during which they are removed from operational service. Each cutter is normally scheduled for one dry dock availability every 4 years and one dockside availability every 3 years, in addition to any needed unplanned or emergency repairs. The agency currently obtains services for each WHEC cutter individually, with separate contracts for dry dock and dockside availabilities. In November 2004, the Coast Guard began a review to attempt to identify benefits that could be achieved by transitioning from the agency current model of awarding individual contracts for each service for each ship, to what is known as a –phased maintenance model,— i.e. multi-year, multi-ship contracts that involve the contractor in both the long-term planning and performance of maintenance and repair services. Contracting Officer's (CO) Statement para. 12. Among these anticipated benefits are the reduction of costs from leveraging a large volume of work, learning curve efficiencies from repeat work on the cutters (as opposed to the current model, where contractors may not work on the same ship), better management of costs resulting from advanced planning, and decreased length of maintenance availabilities, which results in an increase in the ships' operational time. Agency Report (AR), Tab 27, Add. to WHEC Cutter Acquisition Plan (Bundling Analysis), 4-6. To implement its review, the Coast Guard proposed to use this phased maintenance approach for its WHEC cutters based in Alameda. As relevant here, the new phased maintenance approach included consolidating all maintenance and repair work, including the dry dock and dockside work, into a single contract. The agency's requirements for maintenance and repair were also subject to a geographic restriction: under Coast Guard regulations all work on the WHEC cutters based in Alameda must be performed within 75 miles of Alameda.