Norfolk Dredging Co. v. United States

58 Fed. Cl. 167, 2003 U.S. Claims LEXIS 281, 2003 WL 22416757
CourtUnited States Court of Federal Claims
DecidedOctober 14, 2003
DocketNo. 03-2225C
StatusPublished
Cited by4 cases

This text of 58 Fed. Cl. 167 (Norfolk Dredging Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Norfolk Dredging Co. v. United States, 58 Fed. Cl. 167, 2003 U.S. Claims LEXIS 281, 2003 WL 22416757 (uscfc 2003).

Opinion

ORDER

MILLER, Judge.

This pre-Zpost-award bid protest action is before the court after argument on the parties’ cross-motions for summary judgment. Plaintiff faults the Government for permitting intervenor dredging company, an entity owned by a foreign corporation in combination with a company 50% owned by U.S. citizens, to enlarge an exemption to U.S.preference legislation that restricts dredging in U.S. waters to U.S.-built, 75% U.S.-citizen-owned vessels and vessels chartered by a [169]*169U.S. citizen or U.S. entities with no less than 75% U.S.-citizen control.

FACTS

The relevant facts, which are largely undisputed, derive from the administrative record. On August 8, 2003, the U.S. Army Corps of Engineers (the “Corps”) issued an Invitation for Bids on Solicitation No. DACW54-03-B-0011 for dredging of More-head City Harbor, Beaufort Harbor, and Brandt Island, North Carolina. Four sealed bids were received and opened on September 16,2003.

Bean Stuyvesant, LLC (“intervenor”), was the apparent low bidder at $9,570,800.00. Norfolk Dredging Company, Inc. (“plaintiff’), was the second lowest bidder at $9,577,560.00. On September 25, 2003, plaintiff filed this protest claiming that intervenor is unqualified to perform the contract. Due to environmental restrictions, the contract may not begin before November 1, 2003, but must be completed by April 30, 2004.1 Timely award of the contract was crucial because the end of the Government’s fiscal year was imminent. Pursuant to an agreement among the parties, the Corps awarded the contract to intervenor on September 30, 2003, despite the pendency of plaintiffs protest.2 Thus, this protest, while technically filed pre-award, proceeded as a post-award matter.

Plaintiff complains that intervenor is not qualified to perform dredging in U.S. waters as prohibited by the Oceans Act of 1992. 46 U.S.C. app. § 292 (2000). The Oceans Act, a comprehensive Act that includes provisions precluding foreign citizens from engaging in dredging, was the most recent of laws dating from 1906 that implemented a policy of restricting foreign operations in coastwise trade, vessels plying between U.S. ports. Congress has restricted coastal trade to vessels that are built and documented3 in the United States, 46 U.S.C. app. § 883 (passed in 1920), and at least 75% U.S.-citizen owned, 46 U.S.C. app. § 802 (passed in 1916). Dredging, specifically, has been limited by the Foreign Dredge Act of 1906, 46 U.S.C. app. § 292, which bars foreign-built dredges from operating in U.S. waters.

To complete the subject contract, interve-nor submitted that it will use the dredge MERIDIAN. The MERIDIAN is a U.S.built, U.S.-documented non-hopper 4 dredge, owned by Bean Meridian, LLC. Non-hopper dredges, which are smaller and more numerous than hoppers, facilitate the bulk of coast-wise dredging projects. Plaintiff does not claim that the use of the dredge MERIDIAN is a violation of the applicable statute. Rather, plaintiff contends that intervenor, a Delaware limited liability corporation, cannot charter MERIDIAN under applicable law. Stuyvesant Dredging Company, Inc., a for[170]*170eign Corporation, and Bean Dredging, LLC, a U.S. entity, each own 50% of intervenor. Stuyvesant Dredging Company, in turn, is owned by Royal Boskalis Westminster, NV, a Dutch conglomerate.

While intervenor is 50% foreign owned, 46 U.S.C. app. § 292 contains an exception that includes Stuyvesant Dredging Company and any entity in which it has an interest. At issue is whether intervenor legally may charter a U.S.-built and -documented non-hopper dredge under the exception to 46 U.S.C. app. § 292 of the Oceans Act of 1992, found at section 5501(a)(2) of Pub.L. No. 102-587. This exception applies to the vessel STUYVESANT, which, in 1982 began a 40-year charter to Stuyvesant Dredging Company; chartering activities involving hopper and non-hopper vessels of Stuyvesant Dredging Company itself and entities in which the company has an interest; and other dredging vessels described by their ownership or activities. The focus is on the provision governing non-hopper vessels.

DISCUSSION

1. Jurisdiction and standard of review

Jurisdiction in the Court of Federal Claims is prescribed by the Tucker Act, 28 U.S.C. § 1491(b)(1) (2000), which allows a protestor to challenge “the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” The court evaluates the procuring agency’s conduct to determine whether the Government’s decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A); see Info. Tech. & Applications Corp- v. United States, 316 F.3d 1312, 1319 (Fed.Cir.2003) (applying “arbitrary and capricious” standard of section 706 under 28 U.S.C. § 1491(b) in post-award bid protest action where Federal Circuit decided “whether the Air Force’s procurement decision was ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’ ”). If a protestor satisfies its burden in proving the requisite violation, the court may award equitable relief pursuant to 28 U.S.C. § 1491(b)(2).

Provisions of the Federal Acquisition Regulation (“FAR”), as incorporated into the solicitation, require that “contracts shall be awarded to[] responsible prospective contractors only,” and to be determined responsible, a contractor must, inter alia, “[b]e otherwise qualified and eligible to receive an award under applicable laws and regulations.” 48 C.F.R. (FAR) §§ 9.103-9.104-1 (2002). Plaintiff argues that, because inter-venor does not qualify for the exception to the 1992 amendment, it is not a “responsible” contractor in that it is not “otherwise eligible and qualified,” thereby failing to satisfy 48 C.F.R. § 9.104-l(g).

Plaintiff contends that the relevant provisions of the Oceans Act prohibit intervenor from chartering vessels to dredge in waters of the United States. The Oceans Act amended the Foreign Dredge Act of 1906, which previously had allowed foreign entities to charter U.S.-owned dredges and operate in the United States. After the 1992 amendment, the charterer of the vessel must be a U.S. citizen or an entity with at least 75% U.S.-citizen control. 46 U.S.C. app. §§ 292, 802. The Oceans Act included an exception for the vessel STUYVESANT and Stuyvesant Dredging Company. Plaintiff puts forward that the exception was intended to allow Stuyvesant Dredging Company to continue performance of dredging projects utilizing the hopper dredge STUYVESANT and, if it became disabled, to replace the vessel with other hopper or non-hopper vessels owned either solely by the company or an entity in which it has an interest.

The exception to 46 U.S.C. app. § 292, Pub.L. 102-587 § 5501(a)(2) provides, in pertinent part, as follows:

“The amendment made by paragraph (1) [amending this section] does not apply to—

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Bluebook (online)
58 Fed. Cl. 167, 2003 U.S. Claims LEXIS 281, 2003 WL 22416757, Counsel Stack Legal Research, https://law.counselstack.com/opinion/norfolk-dredging-co-v-united-states-uscfc-2003.