GAO Dismisses Protest Of Waterways Commerce Cutter Contract

The U.S. Government Accountability Office (GAO) has dismissed Bayou La Batre, Ala.-based Steiner Construction Company’s latest protest over a contract awarded to Birdon America of Denver, Colo., for the design and construction of the U.S. Coast Guard’s Waterways Commerce Cutter program (WCC). The contract, worth nearly $1.2 billion if all options are exercised, is for delivery of 27 vessels.

The GAO announced the decision on December 4.

The protest from Steiner Construction followed a recent Small Business Administration (SBA) ruling that found Birdon America did not qualify as a small business and therefore was ineligible to bid on the WCC contract. SBA’s Office of Hearings and Appeals (OHA) issued a final decision September 8, declaring that Birdon America did not comply with the SBA’s non-manufacturer rule. The WCC program was authorized as a total small business set-aside.

Despite that decision from SBA, the GAO dismissed Steiner Construction’s protest “for failure to state a valid basis of protest where the protest relies on an inapplicable Federal Acquisition Regulation section and fails to demonstrate that the agency has violated a procurement statute or regulation.”

According to the GAO, Steiner Construction argued for the termination of the Coast Guard’s contract with Birdon America “because OHA vacated, rather than reversed, the SBA Area Office’s determination of eligibility for award.” In contrast, the Coast Guard argued that, even though the SBA size determination was later vacated, the Coast Guard awarded the contract in accordance with SBA’s initial ruling and, thus, awarded the contract legally. The GAO stated, “USCG could not have known that OHA would subsequently vacate on March 15, 2023, the SBA Area Office’s [initial] determination that Birdon was an eligible small business and manufacturer and therefore would have had no reason to prepare a written justification to proceed with award.”

That decision from the GAO echoes a statement the Coast Guard released to The Waterways Journal in October following the SBA’s ruling regarding Birdon America’s small business status.

“The Coast Guard is proceeding with the contract for detail design and construction of two Waterways Commerce Cutter variants, the River Buoy Tender and Inland Construction Tender,” the Coast Guard said in the October 6 statement to the WJ. “The Coast Guard awarded the contract based on an initial determination by the Small Business Administration (SBA) that the offeror was an eligible small business. Neither the Federal Acquisition Regulations nor SBA regulations require termination of a contract awarded on such a basis, even if later appeals before the SBA Office of Hearings and Appeals (OHA) conclude that the awardee is an other-than-small business for the purpose of the procurement.”

The full GAO decision is available online at www.gao.gov/assets/870/863867.pdf.