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July 13, 1984


The opinion of the court was delivered by: FLANNERY


 Flannery, District Judge.

 Plaintiff in this case was an unsuccessful bidder in a United States Coast Guard procurement in which the Coast Guard sought sixteen Patrol Boats ("WPB's") on an expedited basis to combat drug smuggling in the Gulf Coast area. The contract award was given to Marine Power & Equipment Company ("MPE"), and plaintiff here complains that the successful bid was not responsive. Plaintiff requests the court to order that the Coast Guard terminate its contract with MPE and award it to plaintiff. Based on the facts adduced at a trial on the merits, and for the reasons stated herein, the court will grant plaintiff's request to set aside the Coast Guard's award to MPE, but will deny plaintiff's request for an order awarding plaintiff the contract. Instead, the case will be remanded to the Coast Guard for appropriate action not inconsistent with this opinion.


 On May 11, 1984, the Coast Guard awarded MPE the contract at issue in this case. Plaintiff soon discovered certain information which led it to believe that the award was improper because MPE's proposal could not have met the WPB specifications established by the Circular of Requirements ("COR") governing this procurement. On June 8, 1984, plaintiff filed the instant complaint, and simultaneously moved for a temporary restraining order and/or a preliminary injunction to stop performance of the Coast Guard/MPE contract. The court set the matter down for a hearing on the TRO, and notified counsel for plaintiff, the Coast Guard, and MPE, a potential intervenor. *fn1" After the hearing, the court denied plaintiff's motion for a TRO after balancing the equities. After consultation with counsel, however, the court determined that the dispute should be decided expeditiously on the merits. Without objection, an expedited discovery schedule was established, and the case was set down for a trial on the merits on July 9, 1984. The parties were able to work out discovery disputes with minimal intervention by the court, and depositions were taken of the witnesses who would appear at trial. Defendant submitted certain information to the court in camera which contained apparently proprietary information that defendant considered necessary for the court's review of the agency's action. On July 9, 1984, the case was tried by the court sitting without a jury. The court, having considered the pleadings filed in this case, the testimony of the witnesses, the documents in evidence and the stipulations of the parties, the defendant's in camera submissions, *fn2" and the arguments of counsel, hereby makes the following findings of fact and conclusions of law as required by Rule 52(a) of the Federal Rules of Civil Procedure.


 A. General Description of WPB Procurement

 1. In late 1982, the Coast Guard determined that there was an urgent need for patrol boats to be used for alien and drug interdiction on the gulf and southeast coasts of the United States. In order to ensure that it could expeditiously obtain reliable and proven crafts that could meet the requirements necessary for this urgent mission, the Coast Guard developed the "Parent Craft" concept, and explicitly incorporated that concept into its Request for Proposals (RFP) and Circular of Requirements (COR) for RFP DTCG23-83-R-30024.

 2. The Parent Craft concept utilized for this WPB procurement represented a departure from normal procurement procedures. As Commander Tozzi, a member of the Source Evaluation Board and Engineering Evaluation Team for this procurement testified, a normal procurement involves thorough and time consuming design development, engineering studies, and testing to work out design difficulties that can be expected with a new craft. For the WPB procurement at issue, the Coast Guard determined that use of the "Parent Craft" concept would result in much faster procurement and construction of a tested, reliable boat which greatly reduced risk to the Coast Guard. The "Parent Craft" concept was very simple -- each offeror was required to designate a "Parent Craft" from among existing, fully proven patrol boats, and the "daughter craft" proposed to be constructed would be required to be identical or similar to the Parent Craft in critical areas set forth in the COR. By making use of this concept, the Coast Guard believed it could avoid the need for the normally required extensive engineering studies and testing, and could obtain proven WPB's quickly and with minimal risk that they would fail to perform as required. In a Coast Guard announcement in the March, 1983, Commerce Business Daily, it was emphasized that the proven Parent Craft concept was being utilized "to minimize Coast Guard technical risk."

 3. The requirements for the Parent Craft and the WPB (the "daughter craft" to be constructed) were set out in some detail in the COR for this procurement. In July, 1983, approximately eleven proposals were received. Throughout the procurement process, the "Parent Craft" concept was stressed, and when bidders requested clarification on critical issues such as Parent Craft/WPB similarity requirements, the Coast Guard routinely replied that the COR was clear, and referred bidders to specific provisions in the COR without comment. Through a gradual process of eliminating bidders who could not correct disqualifying deficiencies, the field was narrowed to two -- MPE and plaintiff Bollinger Machine Shop. A third bidder, Eastern Marine, Inc., challenged the Coast Guard's decision to eliminate it for proposing a WPB that was "dissimilar" from its Parent Craft, but the Coast Guard's decision was upheld by the United States Court of Claims in Eastern Marine, Inc. v. United States, 5 Cl. Ct. 34 (1984). In that action, plaintiff Bollinger intervened along with MPE to defend the Coast Guard's decision to eliminate Eastern Marine from the competition.

 4. Plaintiff submitted its "best and final offer," and MPE submitted at least two "best and final offers," one with WPB's containing 12-cylinder engines and another with 16-cylinder engines. On May 11, 1984, the Coast Guard awarded the contract to MPE for production of up to 16 WPB's with 12-cylinder engines, for an approximate price of $ 76 million. Shortly thereafter, plaintiff initiated this lawsuit, alleging that the Coast Guard's selection of MPE's 12-cylinder craft was not permissible under the COR, primarily because the MPE Parent Craft was believed to contain a 20-cylinder engine, making substitution of the 12-cylinder engine "dissimilar" and inconsistent with the Parent Craft concept.

 B. Specific Requirements of the COR

 5. The Coast Guard's requirements for each competitor's Parent Craft and WPB's were set forth in the COR. Section 042b, " Parent Craft ", states that the "Parent Craft shall have been previously designed, built, and operated as a patrol craft." Among other requirements, § 042b states that


The Parent Craft shall meet the requirements of COR 100b (Structure), 200a (Propulsion Plant), and 200b (Propulsion Plant Rating).


The Parent Craft shall have demonstrated the speed and seakeeping specified in Section 070b. . . .

 6. The "Propulsion Plant" requirements that the Parent Craft was required to satisfy are contained in § 200a. These critical requirements also had to be met by the "daughter" WPB. The requirements of § 200a were deemed "pass-fail" requirements by the Coast Guard. Section 200a, entitled "Propulsion Plant, General," reads as follows:


200a. General


The propulsion plant and supporting components shall be identical to the Parent Craft specified in section 042.


The propulsion engines shall be diesel marine engines with reverse reduction gears. Delta configured engines are not acceptable. Main propulsion engines, reduction gears, shafting, bearings and propellers shall be identical to the parent craft. If equipment substitutions are necessary the provisions of section 042 shall apply. Propulsion plant substitutions meeting the criteria in section 042 will be approved subject to performance verification in full scale trials. [emphasis added].

 7. As is evident from even a quick reading of § 200a, the COR required that the WPB "engines, reduction gears, shafting, bearings, and propellers shall be identical to the parent craft," but that "necessary" substitutions in these critical areas would be acceptable if they could meet the criteria established in § 042. COR § 042 provides the following in pertinent part:


Where equipment is specified by Manufacturer's name, make, and model number, the Contractor may propose equivalents to these equipment. In order for the proposed item to be acceptable, it must be approved by the Government based on the following:


1. Possess appropriate regulatory body approval where required.


2. Possess similar:


a. dimensions


b. weight


[c. omitted]


d. performance


e. service


f. material


g. maintenance features


h. time in service


i. population in marine use


j. vendor furnished training


k. vendor furnished service


l. data


m. warranty


n. supportability


When lesser dimensions and weights and superior power, service, material, and maintenance characteristics are demonstrable and are to the advantage of the WPB's mission, the proposed item will be acceptable provided all other criteria are met. [emphasis added].

 8. The Parent Craft and WPB speed and power requirements are contained in § 200b, which in turn refers to § 070b. Section 200b, entitled "Propulsion Plant Rating," reads as follows:


200b. Propulsion Plant Rating


The propulsion engines shall be rated to meet the speeds required by section 070b. The requirements for the trials are contained in section 094. The maximum speed requirement shall be attainable while operating at or below the "Intermittent or Crew Boat Rating" as used by Detroit Diesel-Allison Division, the "Light Duty Commercial Rating" as used by Cummins Engine Company and Caterpillar Tractor Company, or equivalent 8 hours continuous operation within 24 operating hours rating as published and warranted by the engine manufacturer. The maximum continuous speed requirement shall be attainable while operating at or below the continuous power rating as published and warranted by the engine manufacturer.

 Section 070b, referred to in § 200b, is a subpart of Section 070, which is entitled "General Requirements for Design and Construction." Section 070b reads, in pertinent part, as follows:


070b. Characteristics


The operating characteristics of the WPB shall be as follows:


. . . SPEED: Maximum speed equal to or greater than 28 kts in Sea State 2 with at least 25 kts maximum continuous speed in Sea State 2. Best economical speed of at least 10 kts on two shafts.


NOTE: The maximum speed and the maximum continuous speeds shall be attainable at half load displacement. The calm water trial speeds required to demonstrate this speed are specified in section 094.


. . . ENDURANCE: Minimum five days of fuel, water, and provisions. Fuel endurance to provide 96 hours at best economical speed on two shafts plus 24 hours at maximum continuous speed with at least 10% usable fuel reserve remaining.

 9. Section 70e, entitled "Design Conditions," reads in part as follows:


070e. Design Conditions


Equipment and machinery shall be capable of operation with sea water temperatures ranging from a high 85 deg. F to a low of 28 deg. F.


Equipment and machinery shall be capable of operation with exterior air temperature from minus 40 deg. F to 105 deg. F with relative humidity ranging from zero to one hundred percent.

 10. Both Sections 70b, which sets forth speed requirements, and section 200b, which refers to engine speed requirements, refer to Section 094. Section 094c, entitled "Preliminary Acceptance Trials," reads, in pertinent part, as follows:


During the Preliminary Acceptance Trials the WPB shall demonstrate the ability to attain the speeds required in section 070 by calm water performance as follows:


1. A speed of 26 knots shall be demonstrated at an engine power no greater than the continuous power rating specified in section 200b.


2. A speed of 29.5 knots shall be demonstrated at an engine power no greater than the 8 hour rating specified in section 200b.

 C. Bollinger WPB Proposal

 11. Throughout the procurement process, plaintiff Bollinger took a conservative approach in an attempt to adhere closely to the "Parent Craft" concept, with particular care in attempting to meet the commonality requirements with regard to its WPB engine and propulsion configuration. Its parent craft contained a 16-cylinder Paxman Valenta engine built in 1974. Between 1974 and 1983, the engine manufacturer made internal design changes to upgrade the horsepower in its engine from 2583 BHP to 3350 BHP. The older engine is no longer available. In order to avoid the propulsion configuration changes that would be necessary to accommodate the new, more powerful 16-cylinder Paxman available for its WPB, Bollinger chose to place a governor in the new engine so that its power could be reduced to duplicate what was produced by the old engine. The newer WPB 16-cylinder engine (similar in size and weight to the old engine), even as modified, makes the WPB capable of meeting all of the COR's speed and endurance requirements, both at standard ("ISO") temperature conditions and at the design conditions in § 070e.

 12. During the procurement process, plaintiff Bollinger contemplated substituting the 16-cylinder Paxman engine of its Parent Craft and WPB with a 12-cylinder engine possessing required horsepower. This would have saved approximately $ 250,000 per boat. Plaintiff determined, however, that such a substitution was not permitted by Section 042a of the COR because the 12-cylinder engine would not have been "similar" to the 16-cylinder engine in the Parent Craft. Bollinger's 16-cylinder WPB final offer cost more than MPE's 12-cylinder proposal.

 13. The parties have stipulated that Bollinger's best and final offer "was an acceptable technical proposal from a responsible source, within the competitive range for this solicitation, conformed fully to the essential requirements of the solicitation, and was eligible for award of the subject contract." The court adopts this as a finding of fact.

 D. The MPE WPB Proposal Selected by the Coast Guard

 14. MPE's 12-cylinder engine WPB proposal was accepted by the Coast Guard over MPE's counter-proposal and Bollinger's proposal. The 12-cylinder engine was smaller in size and weight than the engine in MPE's Parent Craft, and changes in the propulsion configuration, described below, were necessitated by this change. The propriety of the Coast Guard's acceptance of this engine substitution and the changes thereby necessitated is the key issue in this lawsuit. 15. The parties have entered into a stipulation regarding the size and characteristics of engines in MPE's Parent Craft and WPB. This stipulation establishes that the WPB Parent Craft engine contained either 16 or 20 cylinders, but the stipulation permits the court to adopt the finding that the Parent Craft contained a 20-cylinder engine unless defendant affirmatively establishes otherwise. The court finds that defendant has not so established, and notes that the court's decision, although not dependent upon a finding that the Parent Craft contained a 20-cylinder engine, is strengthened by such a finding. For this and other reasons, the court will adopt as fact, for purposes of this decision only, that the MPE Parent Craft contained a 20-cylinder MTU engine. As per the stipulation, the court further finds that this engine is currently available and has the following characteristics: Main Engine (Number) MTU20V538TB92 Number of Cylinders 20 Overload (2 hours in 12) 4705 BHP Continuous Operating Rating Per Engine 4265 BHP Length, Basic Engine 150.8 inches Engine and Gear 205.9 inches Weight, Basic Engine 19,000 lbs.


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