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B-401059 1 (2009-04-29)

handle is hein.gao/gaobadavv0001 and id is 1 raw text is: G A 0 Comptroller General Accountability * Integrity * Reliability of the United States United States Government Accountability Office DOCUMENT FOR PUBLIC RELEASE Washington, DC 20548 The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of: Southern Scrap Material Company File: B-401059 Date: April 29, 2009 Marc C. Hebert, Esq., Stanley A. Millan, Esq., and Michael C. Drew, Esq., Jones, Walker, for the protester. Janis P. Rodriquez, Esq., and Ryan Kabacinski, Esq., U.S. Maritime Administration, for the agency. Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that liquidated damages provision in solicitation for ship sale/dismantlement is improper because agency profits from sales program, and thus suffers no loss from breach, is denied where agency reasonably determined that it will suffer damages as a result of delayed performance; fact that program under which contract is issued generates revenue is irrelevant to propriety of provision. DECISION Southern Scrap Material Company, of New Orleans, Louisiana, challenges the inclusion of a liquidated damages provision in solicitation No. SDPEXC-08001, Announcement 12_22_08, as amended on January 16, 2009, issued by the U.S. Maritime Administration (MARAD) for a contractor to purchase and dismantle certain non-retention vessels held in the National Defense Reserve Fleet. Southern maintains that liquidated damages provisions are inappropriate for sales contracts such as this. We deny the protest. The solicitation requests offers to purchase, dismantle, and dispose of specific listed vessels; the financial incentive for a contractor to perform this contract is retention of the proceeds of recycled materials. Agency Report (AR) at 20. In responding to the solicitation, offerors were required to propose a schedule that included, among other things, remediation of hazardous wastes and dismantling the ship. Solicitation at 6. The solicitation includes a liquidation damages provision stating that the contractor will be liable for damages in the amount of $600 for each day of delayed

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