[Protest of Navy Solicitation for Installation of Undersea Fiber Optic Cable System]

A firm protested a Navy solicitation for the installation of an undersea fiber optic cable system, contending that: (1) the requirement that firms use U.S.-flag vessels should not apply to specialized cable-laying vessels; and (2) the U.S.-flag restriction should not apply because the acquisition was not for cargo or freight transportation. GAO held that: (1) the Navy improperly failed to make the distinction between a contract for the delivery of landed cargo and the necessary, incidental movement of supplies used by a vessel when carrying out a service contract; (2) the service-oriented mission of the voyage and the lack of freight charges supported a determination that the firm was not contracted to transport supplies. Accordingly, the protest was sustained, and GAO recommended that the Navy solicit new proposals and reimburse the protester for its costs.