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EXECUTIVE SUMMARY For the last 5 years, the U.S. Congress has refused to support the budget requests from the Administration to deactivate a significant portion of the ocean-going fleet of the National Oceanic and Atmos- pheric Administration (NOAA). These proposals advocate acquiring ship time for fisheries and other programs by chartering commercial vessels. Many members of Congress are concerned that these proposals will adversely affect NOAA's capability to accomplish its missions and that no real cost savings will be achieved. This report, prepared by a committee of the Marine Board of the National Research Council at NOAA's request, addresses the technical, operational, and economic issues that must be considered by NOAA in evaluating alternative strategies to obtain ship services to meet its mission requirements. The committee examined and appraised each of the mission areas in which NOAA utilizes vessel support and identified types of projects potentially suitable for contracting by the private sector. The assessment of mission areas suitable for chartering was based on the evaluation of a number of identified technical and policy issues and the chartering experiences of other organizations. Finally, the committee proposed a methodology for NOAA to use in designing a v, obtaining vessel services through chartering. A number of policy issues must be addressed by NOAA if vessel chartering is to be a viable option for NOAA to obtain ship services. NOAA needs to make definitive decisions on the future of its fleet and its capability to meet growing responsibilities in bathymetry, fisheries, and oceanographic research. If chartering is to be seriously considered, NOAA needs to establish agency policy to make chartering an attractive alternative. Not least of these would be agency policy and procedures to enter into long-term multiyear contracts. Other government organizations and certain segments of the private sector have used chartering selectively to and cost-effective oceanographic services. strategy for obtain highly sophisticated ~ ~ Under the appropriate circumstances, NOAA could use chartering to comparable advantage. Many of NOAA's legitimate concerns regarding the potential failure of a vessel charter to provide adequate vessel services can be addressed through their designation as direct costs to the contractor or through 1

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2 contract specifications and procedures. Explicit documentation of expectations and needs should be made by scientific personnel who have a vested interest in the data or service to be provided. Furthermore, dedicated technical staff will be needed to handle these highly technical contracts. In its evaluation of the mission areas within NOAA that require vessel services, the committee identified certain areas that would be more favorable for charter than others. The committee suggested that bathymetric surveys and selected fisheries stock assessments would be amenable to chartering, whereas research functions in atmospheric, oceanographic, or fisheries areas would be less so. Furthermore, due to the legal implications, surveying for nautical charts (hydrographic surveying) was also identified as an area that would be best accomplished directly by NOAA. Vessel chartering to provide ship services could be a viable alter- native for NOAA if conducted initially on an experimental basis. It should be clearly understood that certain program areas as discussed above are considered optimal by the committee for chartering while other areas should be supported by NOAA's own vessels. Furthermore, if chartering is undertaken, technical personnel should be involved in contracting procedures, and contracting through central procurement should be avoided. The findings and recommendations of the committee are as follows: 1. Finding: The NOAA Fleet represents a significant and unique part of the total Federal Oceanographic Fleet. As such, decisions regarding its future should be made in the context of total national needs. RECOMMENDATION: Policy decisions concerning the future of the NOAA Fleet should ensure that the capability to support national interest at sea is strengthened, not diminished. 2. Finding: Ocean research and data acquisition will most probably increase as a consequence of the 1983 declaration of an Exclusive Economic Zone (EEZ) extending 200 miles offshore, the increased use of marine resources, the national commitment to global ocean investiga- tion, and the level of future NOAA activities in bathymetry, fisheries, and oceanography. The NOAA Fleet will play an important role in accomplishing this task. RECOMMENDATION: NOAA should take action to ensure that it will be able to provide the nation with the required capability to perform marine resource assessment and oceanographic research in the future.

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3 3. Finding: Industry and other governmental agencies have used chartering to obtain sophisticated and cost-effective oceanographic services. In selected program areas, NOAA potentially could use chartering to comparable advantage to help to meet its ship needs and to bring new and more sophisticated vessels into national service. Other program areas are not conducive to chartering. RECOMMENDATION: In selected program areas, NOAA should establish and implement policy that encourages the acquisition of short- and long-term ship services through a variety of chartering mechanisms. RECOMMENDATION: NOAA should commission the conduct of a study to define the characteristics of an idealized fleet to meet present and projected ship services needs. The results of this study should serve as the basis for the modernization of the NOAA Fleet and the implementation of a program for chartering ship services. RECOMMENDATION: NOAA should prepare a carefully designed request for proposal (RFP) for chartering ships to service one or more mission areas. It is the committee's belief that bathymetric surveying of the EEZ should be offered to interested contractors as promptly as a carefully drawn RFP can be prepared and multiyear chartering authorization can be obtained. Only through an RFP will definitive information be developed on chartering costs and vessel availability. Once the government has definitive information on contractor costs and services and its own costs and requirements, it can make an informed decision about contracting for vessel services. 4. Finding: The committee has attempted to obtain data to compare the cost of services of contractors to NOAA-performed oceanographic services. The data from respondents were inconclusive due primarily to lack of specificity in standards and tolerances provided for each mission area. The committee believes that only through the issuance of a carefully prepared RFP, which would include incentives for high performance by contractors and clear intent to make a contract award, will competitive and reliable cost data be obtained. RECOMMENDATION: NOAA should issue a full RFP for EEZ bathymetric surveying and convey a serious intent to award a long-term contract in order to obtain accurate cost data. This should be undertaken by NOAA as an experimental programs with a clear recognition that funds must be set aside to implement this recommendation.

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4 5. Finding: NOAA is justifiably apprehensive about ensuring contractor responsiveness and the quality of products produced. RECOMMENDATION: NOAA should accept the direct responsibility for defining its expectations in standards and tolerances that become part of any REP and contract documents that may result from a successful solicitation. Other federal agency successes and failures should be fully understood. 6. Finding: For many chartering alternatives, long-term charters are more cost-effective and attractive than short-term charters. NOAA's past chartering experience has not included long-term contracting. enter into long-term multiyear contracts for ship charters and scientific services. Other agencies appear to have such authorization. It is not clear to the committee that NOAA is able to RECOMMENDATION: NOAA should establish agency policy and procedures to enter into long-term multlyear contracts for ship charters and related scientific services. 7. Finding: The legal implications pertaining to nautical charts were not examined in detail by this committee. ~~=P`,P' - 1&VW~VG., the committee understands that NOAA has the responsibility to support its nautical charts in litigation. RECOMMENDATION: Hydrographic survey ship operations for the purpose of preparing nautical charts should not be chartered out until the implications are fully understood. 8. Finding: Problems appear to occur most frequently where techni- cal procurement documents are prepared in a central procurement office by individuals not intimately familiar with the tasks to be accomplished or services to be rendered at sea. RECOMMENDATION: NOAA should establish a technical capability within its procurement organization that will be fully cognizant of and sympathetic with the needs of scientific personnel.