United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

 

Decision

Matter of: Coastal Seal Services, LLC 

File: B-406219

Date: March 12, 2012

William H. Anderson, Esq., Robertson & Anderson, PLLC, for the protester.

Davis Young, Esq., and Stephen A. Copetas, Esq., Department of the Navy, for the 

agency.

Frank Maguire, Esq., and David A. Ashen, Esq., Office of the General Counsel, 

GAO, participated in the preparation of the decision.

DIGEST

Navy decision to limit procurement to brand name, original equipment manufacturer 

part was unobjectionable where the part was component of critical ship equipment,

the failure of which could have serious consequences for deployed military forces;

the agency lacked technical data rights to overall system; and the agency 

reasonably determined, based on its review of data submitted by protester, that it

lacked adequate data to conduct a competitive procurement for the part.

DECISION

Coastal Seal Services, LLC (CSS) of Lincolnton, North Carolina, protests the 

Department of the Navy’s intent to issue purchase orders on a sole source basis to 

Wartsila Defense Inc., of Chesapeake, Virginia, under requests for quotations 

(RFQ) Nos. N40442-12-T-7153 and N40442-12-T-7154, for replacement stern tube 

shaft seal repair kits. CSS asserts that a requirement for brand name kits is unduly 

restrictive.

We deny the protest.

The RFQs, issued on December 6, 2011, announced the Navy’s intent to issue a 

sole-source, fixed-price order to Wartsila for brand name aft stern and forward stern 

tube seal repair kits for T-AO class seagoing replenishment oilers USNS Big Horn 

(RFQ No.N40442-12-T-7153) and USNS Lenthall (RFQ No. N40442-12-T-7154), 

whose mission is to shuttle fuel oil and supplies to operating naval forces. Agency 

Report (AR) Tabs C1, C2. The Navy normally provides these seal repair kits as 
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government furnished material for installation during scheduled dry dock ship repair. 

Id. 

The seals included in the repair kit are components of a more complex Wartsila 4AS 

stern tube sealing system, comprised of a number of interdependent components. 

AR at 4. In this regard, the stern tube seals are installed on either end of the 

propulsion shaft stern tube, which is filled with oil to lubricate the installed stern tube 

bearings. The rubber seal lip rides on a rotating tungsten coated seal liner to 

maintain a continuous seal as the propulsion shaft rotates, thereby keeping the 

lubricating oil in, and water out, of the stern tube. AR, Tab B, at 3-4; AR, Tab 3, 

Justification & Approval (J&A), at 1. 

The RFQs included a class justification for the use of other than full and open 

competition to procure on a brand name basis stern tube shaft seals from the 

original equipment manufacturer (OEM), Wartsila, for all T-AO class vessels. AR, 

Tab 3, J&A, at 1. The RFQs established a December 13 response date. On 

December 6, CSS responded to both RFQs, quoting repair kits with alternative 

seals manufactured by Aegir Marine, and attaching letters setting forth reasons the 

Navy should consider the Aegir seals. The same day, CSS filed this protest with 

our Office challenging the brand name restriction. 

As discussed below, the record reflects that the protested brand name restriction 

was preceded by agency consideration of whether a competitive procurement open 

to Aegir seals was possible. The relevant facts are as follows. During the 1990s, 

T-AO class oilers experienced several stern tube failures. J&A at 3. In 2000, the 

Navy conducted a competitive procurement of the stern tube seal system for the 

T-AO class vessels. The Navy ultimately found that the Wartsila 4AS anti-pollution 

stern tube sealing system offered the most reliable sealing system and made award 

to a vendor offering that system. Id. 

In 2009, the Navy conducted a procurement of seal repair kits on a sole source 

basis. The associated J&A indicated that only Wartsila OEM seals were 

acceptable, due to the complexity and criticality of the seals and the unavailability of 

technical data on the Wartsila seals to permit evaluation of alternatives. Comments, 

Tab 1, J&A, July 20, 2009. CSS filed an agency-level protest, which the Navy 

denied. The Navy subsequently advised CSS to submit either a statement from 

Wartsila regarding equivalency, an independent testing report, or data sheets with a 

“clear and concise comparison of the two products.” Comments, Tab 1, Letter, 

Dec. 22, 2009. 

CSS subsequently provided copies of two previous studies to demonstrate 

equivalent or better performance by the Aegir Marine seals. Comments at 2; see

AR, Tab 7, Elastomer Research Testing, Jan. 30, 2009; TNO Industrial Technology 

Report, Dec. 4, 2002. In February, 2010, the Navy commissioned a study of the 

two test reports. AR, Tab 10, Statement of Director, Engineering Field Support. 
Page 3 B-406219 

The Navy study indicated that the data in the 2002 test referenced by CSS was “not 

relevant,” since the formulation used for the Aegir seal changed after 2002. 

AR, Tab 11, Comparison of Stern Tube Seals for Propulsion Shafting Seal Systems 

(Comparison), Feb. 2010, at 2. As for the later 2009 study furnished by CSS, the 

Navy study reviewed Wartsila data and testing results which indicated that 

differences in the hardness durometer, elongation and seal configuration between 

the seals, as revealed in CSS’s 2009 study, resulted in superior operational 

characteristics or performance on the part of the Wartsila seal, including a 

significantly (three times) higher seal leakage rate for the Aegir seal. Id.; AR, 

Tab 10, Statement of Director, Engineering Field Support. The Navy study 

concluded that:

[w]hile the Aegir Marine seal may be a satisfactory replacement for the 

Wartsila seal, the material test data presented is insufficient to indicate 

that performance will be equal to that of the Wartsila seal. Data 

reflecting performance, particularly leakage, is necessary to form the 

basis of equivalency.

AR, Tab 11, Comparison, at 2. Likewise, the Navy ultimately concluded from a 

review of all the available data that the test reports provided by CSS did not provide 

sufficient information for the Navy to determine whether the Aegir seals would 

provide performance equivalent to that of the Wartsila seals. AR, Tab 10, 

Statement of Director, Engineering Field Support, at 2-3. Subsequently, in 2010, 

the Navy issued another sole source solicitation for stern tube seals. 

The Navy reached similar conclusions in the 2011 J&A justifying the protested 

brand name procurement here. As an initial matter, the J&A emphasized the critical 

logistics support provided by the T-AO class replenishment oilers, which enable 

operational naval groups to remain on station without disruption to wartime 

operations. The J&A noted that failure of the stern tube seals could result in 

damage to critical ship equipment, loss of propulsion, immediate dry docking, 

disruption of mission readiness, and a “cascading” adverse effect on naval 

operations. J&A at 2-3.

Regarding the possible use of non-OEM seals, the 2011 J&A explained that when 

the Navy acquired the Wartsila tube seal system competitively in 2000, the agency 

did not acquire technical data rights or technical information pertaining to the 

Wartsila seals beyond general drawings. Id. at 4. The J&A indicated that this lack 

of manufacturing and technical information made it impossible for the Navy to 

evaluate and determine whether offered non-OEM replacement parts are equivalent 

to the OEM replacement parts and whether non-OEM replacement parts will 

compromise the required reliability and effectiveness of the stern tube seal system 

as a whole. Id. As for the studies furnished by CSS in support of its claim that its 

seal was equivalent, the J&A reported the Navy’s determination that the Aegir

documentation was insufficient; according to the J&A, the agency still did not have 
Page 4 B-406219 

the technical information required to evaluate and determine whether the Aegir seal 

was equivalent to the Wartsila seal or would compromise the reliability of the stern 

tube system. Id. The J&A concluded that, given the critical role of the T-AO class 

replenishment oilers, and the importance to fulfilling that role of an effective stern 

tube seal system, the agency was seeking to achieve a continuation of the highest 

possible reliability and effectiveness by using OEM replacement components and 

parts in the OEM stem tube shaft seal system. J&A at 1. 

In its protest, CSS asserts that the Aegir seal meets the Navy’s requirements and 

that the brand name restriction to Wartsila seals is therefore unjustified. In this 

regard, CSS points to the tests conducted on the Aegir seal in 2002 and 2009, in 

which, it asserts, the Aegir seal was found to be equivalent to the Wartsila seal. 

CSS also asserts that the Aegir seal is in use on commercial ships, including ships 

with the specific Wartsila 4AS system used on the T-AO oilers, as well as on

four Navy ships. 

The Competition in Contracting Act of 1984 requires full and open competition in 

government procurements except where otherwise specifically allowed by the 

statute. 10 U.S.C. § 2304(a)(1)(A) (2006). One exception to this competition 

requirement is where the agency’s requirements can be performed by only one or a 

limited number of sources. 10 U.S.C. § 2304(c)(1); Federal Acquisition Regulation 

(FAR) § 6.302-1. Where, as here, an agency uses non-competitive procedures it is 

required to execute a written J&A with sufficient facts and rationale to support the 

use of the cited authority. See 10 U.S.C. § 2304(f)(1); FAR § 6.302-1; Signals 

& Sys., Inc., B-288107, Sept. 21, 2001, 2001 CPD ¶ 168 at 9. Our review of the 

agency’s decision to conduct a procurement under the exceptions to full and open 

competition focuses on the adequacy of the rationale and conclusions set forth in 

the J&A. Pegasus Global Strategic Solutions, LLC, B-400422.3, Mar. 24, 2009, 

2009 CPD ¶ 73 at 7. When the J&A sets forth reasonable justifications for the 

agency’s actions, we will not object to award on the basis of other than full and open 

competition. Turbo Mechanical, Inc., B-231807, Sept. 29, 1988, 88-2 CPD ¶ 299 

at 3-4. 

Here, we conclude that CSS has not shown that the agency’s brand name

justification was unreasonable. The record indicates that the seals in question are 

critical ship equipment, the failure of which could have serious consequences for 

deployed military forces. J&A at 2. In this regard, a military agency’s assertion that 

there is a critical need that is related to human safety and affects military operations 

carries considerable weight. Eclypse Int’l Corp., B-274507, Nov. 12, 1996, 

96-2 CPD ¶ 179 at 3. Underlying this policy is the simple fact that under wartime 

conditions, the government must procure items quickly and urgently to meet 

compelling military needs. Jay Dee Militarywear, Inc., B-243437, July 31, 1991, 

91-2 CPD ¶ 105 at 5. 
Page 5 B-406219 

Further, the record also indicates that the Navy did not acquire technical data rights 

or rights to manufacturing drawings and processes, specifications, and other 

technical data pertaining to the Wartsila seals. As a result, the agency determined

that a lack of manufacturing and technical information made it impossible for the 

Navy to determine whether non-OEM components and replacement parts are 

equivalent to the OEM components, and whether non-OEM components will 

compromise the required reliability and effectiveness of the stern tube seal system 

as a whole. AR at 10; J&A at 4. In this regard, we have recognized that a proper 

basis for a sole-source award exists where adequate data is not available to the 

agency to conduct a competitive procurement. Aerospace Eng’g and Support, Inc., 

B-258546, Jan. 13, 1995, 95-1 CPD ¶ 18 at 4 (sole source justified where OEM, not 

government, has right to engineering data for aircraft part); Masbe Corp. Ltd., 

B-260253.2, May 22, 1995, 95-1 CPD ¶ 253 at 3-4 (sole source for aircraft engine 

part justified where adequate data is not available to permit conducting a 

competitive procurement). 

Here, CSS has not shown to be unreasonable the agency determination that 

adequate data was not available to conduct a competitive procurement. While CSS 

refers to the 2002 tests on an Aegir seal as support for its claim of equivalence to 

the Wartsila seal here, CSS has not convincingly rebutted the agency’s 

determination that the earlier test was not relevant because it concerned an Aegir

seal with a different formulation than the seal proposed here. See Comments at 8. 

Nor has the protester shown to be unreasonable the Navy’s determination, based 

on the results of the agency’s 2010 study, that the 2009 test referenced by CSS 

revealed differences in characteristics between the seals which resulted in superior 

operational performance on the part of the Wartsila seal. See Comparison at 1.

Finally, while it appears that Aegir seals have been installed in Wartsila tube seal 

systems, CSS has not shown the Navy to be unreasonable in concluding that 

significant differences in characteristics and usage bar its use here. As an initial 

matter, the four fleet ocean tugs cited by CSS as examples of Aegir seal 

installations are significantly smaller than the T-AO class oilers here, with the tugs 

having displacements of only 2,260 tons versus the 40,700 ton displacement of the 

oilers. U.S. Navy Fact File, Fleet Ocean Tugs, T-ATF; Fleet Replenishment Oilers, 

T-AO. The Navy discounts the significance of these installations as evidence of 

equivalence not only on the basis of a significant difference in size, but also 

because the tugs have a different, less critical mission than the oilers and, in any 

case, the tugs use a different stern tube seal system. AR at 8-9. As for the list 

provided by CSS of Aegir seals installed in Wartsila tube seal systems on 

commercial ships, the agency notes that none of the referenced seals appears to be 

the same size as the seals required for the Wartsila 4AS stern tube sealing system 

installed on the T-AO class oilers here. Supp. AR at 3-4. Furthermore, the agency

emphasizes that CSS has furnished no operational data showing that the 

maintenance and replacement requirements, usage, and reliability of the Aegir

seals installed in Wartsila tube seal systems on commercial ships match that 
Page 6 B-406219 

expected and required with respect to the T-AO class oilers. Id. at 4. In the 

absence of an adequate showing that the expected reliability of the Aegir seals will

match that of the OEM seals, we see no basis to question the brand name 

procurement here.

In sum, CSS has not shown to be unreasonable the Navy’s conclusion that it lacked

adequate data to conduct a competitive procurement, and the agency’s resulting 

determination to undertake the brand name procurement of OEM seals, especially 

in light of the Navy’s claim that a failure of this equipment could have serious 

consequences for deployed military forces. 

The protest is denied.

Lynn H. Gibson

General Counsel