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Guam Industrial Services, Inc. v. Rumsfeld

July 24, 2006

GUAM INDUSTRIAL SERVICES, INC., PLAINTIFF,
v.
DONALD H. RUMSFELD, SECRETARY OF DEFENSE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Document No. 18

MEMORANDUM OPINION

GRANTING THE DEFENDANTS'MOTION FOR SUMMARY JUDGMENT*fn1

I. INTRODUCTION

The plaintiff, Guam Industrial Services ("Guam Shipyard"), is a shipyard in Guam which claims that the United States Navy's bid proposal and contract procurement practices violate the terms of a contract (hereinafter, "the Ship Manager Contract" or "SMC") executed by the Maritime Administration ("MARAD") on behalf of the Department of Transportation ("DOT"). The plaintiff also claims that the Navy's bid proposal and contract procurement practices violate the terms of a memorandum of agreement ("MOA") between MARAD and the Department of Defense ("DoD"). Guam Shipyard seeks to enjoin the defendants*fn2 from soliciting bid proposals and contracting for repairs of Navy vessels from shipyards not located in either the United States or Guam.

Before the court is the defendants' motion for summary judgment as to the plaintiff's claims under the SMC and the MOA. Because the SMC permits repairs for naval vessels designated as prepositioned ships, it does not prevent the defendants from contracting for repairs to the SS Petersburg by foreign ship repair facilities. Furthermore, because 10 U.S.C. § 7310 does not apply to the SS Petersburg, the MOA does not constrain IASC from executing repair contracts with foreign ship repair facilities. For these reasons, the court grants the defendants' motion for summary judgment as to the plaintiff's claims.

II. BACKGROUND

A. Factual Background

The plaintiff is a shipyard located in the U.S. Territory of Guam. Mem. Op. (Aug. 24, 2005) ("Aug. Mem. Op.") at 2. The Guam Shipyard employs approximately two hundred and fifty people -- all U.S. citizens -- and is "the only United States-citizen owned and controlled shipyard that can service United States Navy, Military Sealift Command ("MSC"), and MARAD ships that are under the jurisdiction of the Secretary of Navy and located in the Pacific and Indian Oceans." Id.

A select group of Navy vessels are part of the Navy's Prepositioning Program, a program funded and administered by the Navy and controlled by the Navy's Sealift Command. Id. These ships are positioned by the Navy in strategic oceanic locations, "making it possible to deploy equipment, fuel, and supplies to support U.S. military forces on short notice during times of war or as a result of other contingencies." Id.

The Navy also maintains a fleet of maritime vessels in the Unites States Ready Reserve Force ("RRF"), which are a select group of ships within the National Defense Reserve Fleet. Id. at 3. They are maintained by the DOT's MARAD and are funded from the Navy-controlled National Defense Sealift Fund. Id.

The Navy vessel SS Petersburg is designated both within the Navy's Prepositioning Program and MARAD's National Defense Reserve Fleet. Id. While on assignment as a vessel in the RRF, the SS Petersburg is maintained and controlled by the DOT's MARAD, but when activated under the Navy's strategic Prepositioning Program, the vessel is maintained and controlled by the Navy and the Navy's Military Sealift Command. Id.

The SS Petersburg has been located or "prepositioned" in the U.S. Territory of Guam at the Delta-Echo Pier in Apra Harbor for the past three years. Id. Daily control of the SS Petersburg is delegated to one of the three Maritime Prepositioning Ship squadrons ("MSPRONs"). Id. The vessel's specific mission while located in Guam is to provide offshore petroleum distribution services to the Defense Logistic Agency. Id.

IASC is a corporation that provides ship management services to MARAD for the SS Petersburg. Id. Under the terms of the Ship Manager Contract ("SMC") with MARAD, IASC solicited bids for drydock work and repairs of the SS Petersburg on June 21, 2005. Id. In response to this solicitation, the plaintiff submitted a bid proposal. Id. On August 16, 2005, IASC ...


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