The U.S. Government Accountability Office on Monday denied a protest by Inchcape Shipping Services of a U.S. Navy contract awarded to MLS-Multinational Logistics Services Ltd. for maritime support services. Inchape had argued that the award was improper because MLS made a key personnel change following the close of discussions and that the award violates the prohibition against contracting with inverted domestic companies.
Federal acquisition rules prohibit the award of contracts to companies that used to be incorporated in the United States, or used to be a domestic partnership, but now are incorporated in a foreign country.
Inchape is owned by Dubai-based Istithmar World, part of the giant state-run investment firm Dubai World. It supplies food, fuel, tugboats and port security to Navy ships in the Mediterranean and Middle East, and also works for other navies. The company also acts as a port agent for liner carriers, offshore companies, non-governmental organizations and other customers.
In November, the Navy suspended Inchape for significant overbilling, meaning it could not win new business.
Inchcape, headquartered in the United Kingdom, and MLS submitted bids last year to provide trash removal, crane and forklift services, shipment movement services, water taxi service, potable water, ship utility services and land transportation to the U.S. Fifth Fleet.
MLS, based in Sliema, Malta, informed the Navy in January that its managing director for the Middle East and Africa, who was supposed to be the Navy’s main point of contact, had been placed on paid leave after learning that the Navy was investigating him for participating in overbilling schemes while employed by Inchcape.
The Navy determined that the change in personnel didn’t represent a material revision to its proposal and that it came in at a lower price. It awarded MLS the contract on Jan. 27.
The GAO said Inchcape was not prejudiced by the Navy’s decision, noting that there was no change in pricing because of the new management arrangement.
Washington Notebook: Inchcape loses protest of U.S. Navy award to competitor
