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POSTED: Thursday, Oct. 22, 2009

Commerce Department rebuts Bellingham protest over NOAA site

In a stinging response to the Port of Bellingham's legal protest, the U.S. Department of Commerce is defending the National Oceanic and Atmospheric Administration's choice of Newport, Ore., as the new home for the agency's Pacific Marine Operations Center.

The Commerce Department response, prepared by three agency attorneys, contends that the Port of Bellingham's protest is "replete with factual inaccuracies and mischaracterizations of NOAA's actions."

NOAA is a part of the Commerce Department. The department's attorneys prepared their report on the site selection as part of the legal process that was triggered when both Bellingham and Seattle decided to file formal protests of NOAA's decision with the Government Accountability Office, an investigative arm of the U.S. Congress.

The GAO is expected to rule on the NOAA issue in early December.

The Port of Bellingham provided a copy of the Commerce Department report to The Bellingham Herald.

The report says the Port of Bellingham is incorrect in claiming that a flood plain issue disqualifies Newport's bid. It also says Newport's bid earned the highest rating on technical standards, while offering the lowest price.

Based on the Commerce Department report and an accompanying written statement from NOAA contracting officer James Barrows, it appears that the key issue in the defeat of both Bellingham's and Seattle's bids was the price.

Both Bellingham and Seattle proposed annual lease payments above the $2.66 million per year rent threshold that NOAA had sought in its bid prospectus, according to the Commerce Department report. That was a deal-breaker, according to NOAA, and Barrows contended he made sure that Bellingham understood that.

In March, five months before NOAA made its decision, Barrows wrote that he reminded both Bellingham and Seattle that their lease price proposals were above NOAA's limit, but neither offered to cut their offered price to NOAA's liking, the report says.

Instead, the Port of Bellingham responded that it was "fully qualified and stands ready to assist NOAA in negotiating a package of improvements that best fits NOAA's available budget, and can further work with NOAA in a mutually coordinated strategy to address the ... threshold (price) issue," the Commerce report says.

On April 28, the report says, "Barrows closed the discussion session with Bellingham ... with an emphatic statement that he could not make award for a lease that is over the prospectus level."

The report describes Barrows as "stunned" when Port of Bellingham officials, in protesting NOAA's August decision, contended they were not informed about the importance of the cost issue.

"The protestors well knew the significance of these issues, and their protestations to the contrary are disingenuous," the report says.

Washington, D.C., attorney Lee Curtis, of the Perkins Coie law firm, already has fired off a rebuttal of NOAA's assertions on the port's behalf.

Curtis' rebuttal, submitted to GAO, insists that NOAA has legal authority to accept lease offers above the original price threshold, and NOAA officials never told Bellingham that the price would rule out acceptance of Bellingham's bid.

The exact amount of Bellingham's price offer and many other pieces of information were cut out of the released version of the Commerce report by attorneys, for legal reasons.

Fred Seeger, acting executive director of the port, said he preferred not to respond at length to the Commerce Department attorneys.

He characterized their report defending their agency's actions as a part of the legal review process.

"It's all between the lawyers now," he said.

In the past, port officials have said they were prepared to offer NOAA a lease price that would allow the port to break even on the deal, but they could not go below that.

With the support of Bellingham Mayor Dan Pike, U.S. Rep. Rick Larsen, D-Everett, and many other civic leaders, the port had mounted a vigorous effort to get the NOAA center and its 200 jobs located at the port's deep-water shipping terminal. They touted the NOAA facility as a potentially significant part of the larger effort to redevelop 220 waterfront acres.