FT. WASHINGTON, Pa., October 21, 2003 (PRIMEZONE) -- Starfield & Payne, a Philadelphia-area law firm, today announced that the U.S. Court of Federal Claims issued an opinion on October 14, 2003, ruling that Bean Stuyvesant, a 50% foreign-owned corporation, was not eligible to receive a federal dredging contract that it had previously been awarded. Federal regulations prohibit foreign companies from chartering American dredging vessels to be operated in U.S. waters.
"This case has far reaching implications for the American dredging industry," said Michael H. Payne, Senior Partner at law firm Starfield & Payne, who argued the case on behalf of Norfolk Dredging Company, along with partner Joseph Hackenbracht. "The decision severely limits the ability of foreign interests to continue to participate in the U.S. dredging market and has been termed by the Dredging Contractors of America to be a victory for the American dredging industry," Mr. Payne added.
The case involved a bid protest filed by Norfolk Dredging Company of Norfolk, Virginia, challenging the award of a contract to Bean Stuyvesant, LLC by the U.S. Army Corps of Engineers. Norfolk contended that Bean Stuyvesant, a non-citizen under American maritime laws, was not legally eligible to receive a federal dredging contract.
"American maritime laws have historically prohibited foreign ownership and control of vessels operating in the waters of the United States, " Mr. Payne said. A 1992 law expanded these prohibitions with respect to the dredging industry and specifically prohibited foreign companies from chartering American dredges for operation in U.S. waters. The law provided a grandfather clause, however, that exempted Stuyvesant Dredging Company, a subsidiary of a Dutch based conglomerate, and its hopper dredge the STUYVESANT.
In 1998 Stuyvesant Dredging Company formed a new joint venture, Bean Stuyvesant, with an American firm based in Louisiana, Bean Horizon, Inc. The new company became very active in the American Dredging market, utilizing not only the hopper dredge STUYVESANT, but also a number of non-hopper dredges. The U.S. Customs Service issued a ruling that sanctioned the company's use of non-hopper dredges, but the American industry became increasingly alarmed about the expansion of foreign interest in the American dredging market, particularly after the 1992 law that sought to protect against such an intrusion.
Attorneys for Norfolk Dredging Company argued that the exception granted to Bean Stuyvesant only extended to the operation of hopper dredges and asked the Court to effectively overrule the U.S. Customs Service and to declare that Bean Stuyvesant, LLC, when entering into contracts that did not involve the hopper dredge STUYVESANT, or other certain hopper dredges, was acting illegally and beyond the scope of the limited exemption that had been granted in 1992.
In its decision, the Court agreed with the assertions of counsel for Norfolk Dredging Company and permanently enjoined the Corps of Engineers from proceeding with the contract awarded to Bean Stuyvesant. The Court also held that Norfolk had demonstrated that "the public interest would be served by implementing Congress' expressed intent to 'grandfather existing foreign-owned fleets.'" In other words, the Court concluded that Bean Stuyvesant could not expand into the performance of projects that did not include the use of hopper dredges.
About Starfield & Payne
Starfield & Payne is a Philadelphia-area law firm, which specializes in two main practice areas -- government contracts and SBA/conventional commercial lending.
Michael H. Payne, Esquire is a Senior Partner in the law firm of Starfield & Payne who has represented contractors, subcontractors, and suppliers in all aspects of construction law ranging from the negotiation of contracts to complex litigation of contract claims and appeals. He has represented contractors on numerous projects, including those involving dredging, hazardous waste remediation, military and civil works construction, highway construction, and public projects for state and local agencies.
Mr. Payne was formerly the Chief Trial Attorney for the North Atlantic Division of the Army Corps of Engineers. He has lectured extensively throughout the United States before contractors, industry groups, and government agencies regarding federal government contract matters. Mr. Payne co-authored Bidding and Managing Government Contracts, published by R. S. Means Co., Inc. In 1994, Mr. Payne developed a computer program, FEDCON, which provides federal construction contractors with a hypertext-linked database of information about federal procedures and regulations.
Mr. Payne is a 1969 graduate of The Dickinson School of Law, Carlisle, Pennsylvania, where he received a Juris Doctor degree.
Joseph A. Hackenbracht, Jr., Esquire is a partner in the firm and practices in all phases of Federal, State and local government contract and construction law. He has extensive experience handling protests, contract claims, appeals to administrative boards of contract appeals, and litigation in various Federal and State courts. He has prepared and litigated claims involving the many issues which arise concerning construction, including defective design, defective specifications, differing site conditions, changes, suspensions, delays and contract terminations. Mr. Hackenbracht has worked with clients on projects involving dredging, hazardous waste remediation, and construction of dams, bridges, port facilities, airfields, office buildings, housing, research facilities, and prisons.
Prior to practicing law, Mr. Hackenbracht had over twelve years of experience as an engineer in the design and construction of a wide variety of projects, having been a project manager with the Army Corps of Engineers, a Regional Engineer with the U.S. Department of Education, and a private engineering consultant involved in construction management, contract administration, scheduling, claims analysis and dispute resolution. While with the Corps of Engineers, he also served as an environmental specialist in groundwater contamination and resource management. Mr. Hackenbracht's varied experience allows him to bring to bear a unique perspective on the factual and legal issues confronting those involved in the performance of construction contracts.
Mr. Hackenbracht has a Juris Doctor degree from the Temple University School of Law and a Bachelor of Science degree in Civil Engineering from Lafayette College.