B-172312, MAY 25, 1971

B-172312, MAY 25, 1971

BID PROTEST - CARRIER PREFERENCE DECISION DENYING PROTEST AGAINST THE PROVISIONS OF AN RFP ISSUED BY THE MILITARY SEALIFT COMMAND FOR CONTAINERS, 8' X 8' X 20' AND MEETING AMERICAN NATIONAL STANDARDS INSTITUTE SPECIFICATIONS. PUBLIC LAW 90-268 PROVIDES THAT NO PREFERENCE SHALL BE GIVEN AS BETWEEN CARRIERS UPON THE BASIS OF SIZE OF CARGO CONTAINER, HOWEVER, IT CLEARLY RELATES ONLY TO ADVERTISEMENTS, IFB'S AND CONTRACTS FOR THE CARRIAGE OF GOVERNMENT PROPERTY. THEREFORE, WHEN MILITARY OWNED OR LONG-TERM LEASED CONTAINERS ARE UTILIZED AND THE GOVERNMENT CARRIES ITS OWN PROPERTY, THERE CAN BE NO QUESTION OF A PREFERENCE AS BETWEEN CARRIERS. THE PROTEST IS THEREFORE DENIED.

TO RAGAN & MASON:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 22, 1971, AND PRIOR CORRESPONDENCE, PROTESTING ON BEHALF OF SEA-LAND SERVICE, INCORPORATED (SEA-LAND), AGAINST THE PROVISIONS OF REQUEST FOR PROPOSALS (RFP) NO. N0003371R0024, ISSUED BY THE MILITARY SEALIFT COMMAND, WASHINGTON, D.C.

THE RFP REQUESTED OFFERS FOR THE LEASING OF A NUMBER OF CONTAINERS AND CONTAINER CHASSIS FOR A BASIC PERIOD OF ONE YEAR, WITH OPTIONS FOR THREE ADDITIONAL YEARS IN INCREMENTS NOT EXCEEDING ONE YEAR AND WITH THE FURTHER OPTION TO PURCHASE AT THE END OF THE LEASE. THE SPECIFICATIONS PROVIDE, IN PERTINENT PART, THAT THE CONTAINERS ARE TO BE 8 FEET BY 8 FEET BY 20 FEET AND MUST MEET AMERICAN NATIONAL STANDARDS INSTITUTE (ANSI) SPECIFICATIONS AND BE FITTED WITH ANSI CORNER FITTINGS AND FORK LIFT POCKETS.

YOUR LETTER OF MARCH 24, 1971, APPARENTLY WAS BASED ON THE BELIEF THAT THE CONTAINERS SOUGHT UNDER THIS RFP WERE FOR THE USE OF THE ALASKA STEAMSHIP COMPANY (ALASKA) UNDER ITS TIME CHARTERS WITH THE MILITARY SEALIFT COMMAND (MSC) FOR TWO OF ALASKA'S SHIPS. MSC HAS REPORTED THAT SUCH BELIEF IS NOT IN ACCORDANCE WITH THE PURPOSE FOR WHICH THE CONTAINERS WERE BEING SOUGHT. MSC GIVES THE FOLLOWING REASONS FOR THE PROCUREMENT:

" *** ALASKA STEAMSHIP ADVISED THAT IT WAS DISCONTINUING ITS SERVICE TO ALASKA EFFECTIVE AFTER ITS 29 JANUARY 1971 SAILING. OF THE SEVEN CARRIERS SERVING ALASKA, ONLY ALASKA STEAMSHIP PROVIDED BREAK BULK SERVICE TO KODIAK AND ADAK. VARIOUS ALTERNATIVES FOR SUPPLYING KODIAK AND ADAK WERE EXPLORED AND A DETERMINATION WAS MADE THAT, IN THE BEST INTERESTS OF THE GOVERNMENT, TWO NUCLEUS SHIPS, THE USNS PETRARCA AND USNS FENTRESS, SHOULD BE UTILIZED FOR THIS SERVICE. STEPS HAVE BEEN TAKEN TO MODIFY THESE SHIPS IN ORDER FOR THEM TO CARRY CONTAINERIZED CARGO AND THUS ACCOMPLISH THE DESIRED CONTAINER AND BREAK BULK SERVICE TO THE NAVAL STATIONS AT KODIAK AND ADAK. DURING THE INTERIM PERIOD UNTIL THESE SHIPS ARE READY, TWO OF ALASKA STEAMSHIP'S SHIPS WERE TIME CHARTERED WITH THE OPTION IN THE GOVERNMENT TO CANCEL ON 20 DAYS NOTICE. THE CHARTERS OF THESE TWO SHIPS PROVIDED THAT ALASKA STEAMSHIP WILL PROVIDE THE NECESSARY CONTAINERS DURING THE CHARTER PERIOD. *** "

IT IS FURTHER REPORTED THAT THE CONTAINERS SOUGHT UNDER THIS RFP ARE TO BE USED SOLELY IN THE SERVICE TO ALASKA BY THE TWO GOVERNMENT-OWNED NUCLEUS SHIPS WHICH ARE CONFIGURED TO ACCOMMODATE SUCH CONTAINERS.

IN YOUR LETTER OF APRIL 22, 1971, IT IS URGED THAT PUBLIC LAW 90-268 DOES NOT MAKE ANY EXCEPTIONS FOR NUCLEUS SHIPS, AND THAT THE STATUTE WAS DRAWN AS BROADLY AS POSSIBLE TO PROHIBIT THE SPECIFICATION OF CONTAINER SIZES IN ANY "ADVERTISEMENT OR INVITATION TO BID." IT IS FURTHER STATED THAT WHILE SEA-LAND DOES NOT HAVE ANY CONTAINERS OF THE SPECIFIED SIZE, IT HAS OVER 40,000 CONTAINERS WHICH HAVE BEEN FOUND ACCEPTABLE FOR MILITARY CARGO FOR SEVERAL YEARS, AND THAT THE RESTRICTION IN THE RFP ILLEGALLY ELIMINATED SEA-LAND FROM BIDDING FOR THE CONTRACT.

PUBLIC LAW 90-268 WAS ENACTED MARCH 16, 1968, TO PREVENT THE APPLICATION OF DISCRIMINATORY POLICIES OR PRACTICES BY ANY GOVERNMENT AGENCY AGAINST ANY CARRIER BY GIVING PREFERENCE AS BETWEEN THEM ON THE BASIS OF CARGO CONTAINER OR CONTAINER CELL DIMENSIONS EXCEPT WHEN DETERMINED BY THE SECRETARY OF DEFENSE TO BE REQUIRED BY MILITARY NECESSITY. SEE HOUSE REPORT NO. 991, 90TH CONGRESS, 1ST SESSION, TO ACCOMPANY S. 2419, WHICH BECAME PUBLIC LAW 90-268. SECTION 1 OF THE ACT, AN AMENDMENT TO SECTION 212 OF THE MERCHANT MARINE ACT, 1936 (46 U.S.C. 1122), AS AMENDED, IS ADDRESSED TO THE SECRETARY OF COMMERCE AND THE MARITIME ADMINISTRATION AND PROVIDES THAT IN CARRYING OUT THEIR FUNCTIONS UNDER THE ACT NO PREFERENCE SHALL BE GIVEN AS BETWEEN CARRIERS UPON THE BASIS OF SIZE OF CARGO CONTAINER CELLS WITH RESPECT TO ALL EXISTING CONTAINER VESSELS AND ANY CONTAINER VESSELS TO BE CONSTRUCTED OR REBUILT. TO FURTHER CARRY OUT THIS POLICY, PUBLIC LAW 90-268 AMENDED SECTIONS 2305(A) AND 2304 OF TITLE 10, U.S.C. AS FOLLOWS:

SECTION 2305(A):

"EXCEPT IN A CASE WHERE THE SECRETARY OF DEFENSE DETERMINES THAT MILITARY REQUIREMENTS NECESSITATE SPECIFICATION OF CONTAINER SIZES, NO ADVERTISEMENT OR INVITATION TO BID FOR THE CARRIAGE OF GOVERNMENT PROPERTY IN OTHER THAN GOVERNMENT-OWNED CARGO CONTAINERS SHALL SPECIFY CARRIAGE OF SUCH PROPERTY IN CARGO CONTAINERS OF ANY STATED LENGTH, HEIGHT, OR WIDTH."

SECTION 2304:

"(H) EXCEPT IN A CASE WHERE THE SECRETARY OF DEFENSE DETERMINES THAT MILITARY REQUIREMENTS NECESSITATE SPECIFICATION OF CONTAINER SIZES, NO CONTRACT FOR THE CARRIAGE OF GOVERNMENT PROPERTY IN OTHER THAN GOVERNMENT- OWNED CARGO CONTAINERS SHALL REQUIRE CARRIAGE OF SUCH PROPERTY IN CARGO CONTAINERS OF ANY STATED LENGTH, HEIGHT, OR WIDTH."

THE ABOVE-QUOTED PROVISIONS CLEARLY RELATE TO ADVERTISEMENTS, INVITATIONS FOR BIDS AND CONTRACTS FOR THE CARRIAGE OF GOVERNMENT PROPERTY. AS USED IN THE ACT, "CARRIAGE" CLEARLY MEANS "COMMERCIAL CARRIAGE" SINCE CONTRACTS FOR CARRIAGE WOULD NOT BE AWARDED BY A GOVERNMENT AGENCY TO ANOTHER GOVERNMENT AGENCY PURSUANT TO ADVERTISEMENTS OR INVITATIONS FOR BIDS. FURTHER, THE LEGISLATIVE HISTORY OF THE ACT SHOWS IT WAS ENACTED TO PREVENT THE APPLICATION OF DISCRIMINATORY POLICIES OR PRACTICES BY ANY GOVERNMENT AGENCY AGAINST ANY CARRIER BY GIVING PREFERENCE AS BETWEEN THEM UPON THE BASIS OF SIZES OF CARGO CONTAINERS OR CARGO CONTAINER CELLS. WHEN THE GOVERNMENT CARRIES ITS OWN PROPERTY THERE CAN BE NO QUESTION OF A PREFERENCE GIVEN AS BETWEEN CARRIERS.

DEPARTMENT OF DEFENSE INSTRUCTION 4500.37 OF JANUARY 28, 1971, OWNERSHIP AND USE OF CONTAINERS FOR SURFACE TRANSPORTATION, PROVIDES THAT IT IS THE DOD POLICY TO RELY PRIMARILY UPON THE USE OF CONTAINER RESOURCES AND SERVICES FURNISHED BY THE COMMERCIAL TRANSPORTATION INDUSTRY INSOFAR AS SUCH SUPPORT IS RESPONSIVE TO MILITARY REQUIREMENTS; AND THAT MILITARY- OWNED OR LONG-TERM LEASED (OVER 90 DAYS) CONTAINERS WILL BE UTILIZED ONLY WHEN SATISFACTORY COMMERCIAL CONTAINER SERVICE IS NOT AVAILABLE AT A REASONABLE COST OR SUCH SERVICE DOES NOT MEET MILITARY REQUIREMENTS. PARAGRAPHS III F, G AND H OF SUCH INSTRUCTION PROVIDE AS FOLLOWS:

"F. CONTAINERS AND ASSOCIATED EQUIPMENT MEETING ONE OR MORE OF THE FOLLOWING CRITERIA MAY BE PROCURED FOR MILITARY OWNERSHIP OR LONG-TERM LEASE:

1. THE NUCLEUS OF MILITARY-OWNED OR CONTROLLED CONTAINERS REQUIRED TO PROVIDE FOR UTILIZATION OF CONTAINER SHIPS AND OTHER SHIPS OWNED BY THE DOD OR ACQUIRED FOR LONG-TERM USE UNDER THE BUILD AND CHARTER PROGRAM AND TO MEET OTHER MILITARY REQUIREMENTS. THIS INTERCHANGEABLE NUCLEUS WOULD INCLUDE THE MILITARY SEALIFT COMMAND INVENTORY OF CONTAINERS TO SUPPORT NUCLEUS FLEET OR CONTROLLED SEALIFT OPERATIONS AND THE INVENTORIES OF THE MILITARY SERVICES TO SUPPORT FIELD OPERATIONS.

"G. WHILE THE DOD SUPPORTS THE CONCEPT OF CONTAINER STANDARDIZATION, COMMERCIALLY FURNISHED CONTAINERS WILL BE ACCEPTED FOR SHIPMENT OF MILITARY CARGO REGARDLESS OF WHETHER SUCH CONTAINERS MEET ANY SPECIFIC SET OF STANDARDS; PROVIDED, HOWEVER, THAT THE CONTAINERS AND THE ASSOCIATED SERVICES OFFERED BY A COMMERCIAL CARRIER MEET THE APPROPRIATE MILITARY REQUIREMENTS.

"H. MILITARY SERVICE PROGRAMS INVOLVING PURCHASES AND/OR LONG-TERM LEASE OF CONTAINERS WILL BE SUBMITTED TO THE ASSISTANT SECRETARY OF DEFENSE (INSTALLATIONS AND LOGISTICS) FOR PRIOR APPROVAL."

MSC WAS GRANTED APPROVAL FOR LONG-TERM LEASING OF THE CONTAINERS AND CONTAINER CHASSIS BY MEMORANDUM DATED MARCH 31, 1971, PURSUANT TO PARAGRAPH III.F.1 OF DOD INSTRUCTION 4500.37.

ON THE BASIS OF THE FOREGOING, WE CONCLUDE THAT THE SUBJECT SOLICITATION DOES NOT DIRECTLY OR INDIRECTLY VIOLATE THE STATUTORY PROHIBITION AGAINST ADVERTISEMENTS OR INVITATIONS FOR BIDS SPECIFYING CARRIAGE OF GOVERNMENT PROPERTY IN CARGO CONTAINERS OF ANY STATED LENGTH, HEIGHT OR WIDTH. ACCORDINGLY, YOUR PROTEST IS DENIED.