U.S. District Court Judge Harold H. Greene again lambasted the Military Sealift Command for its attempts to change the system it uses to procure shipping space for defense cargoes to Iceland.
The judge's opinion, released Tuesday, followed his decision last Friday to enjoin the Sealift Command from altering its original procurement system until the proposed changes can be assessed.Meanwhile, Iceland Steamship Co., the Icelandic carrier in the dispute accorded 65 percent of the cargoes, expects to shift to its tariff rates on these shipments unless a different arrangement is worked out with the Sealift Command.
The U.S. carrier challenging the changes, Rainbow Navigation Co., Red Bank, N.J., will continue to haul its 35 percent share of these movements at the rate it bid a year ago under the original system.
A 1986 treaty between the United States and Iceland established the sharing formula, overriding a provision in U.S. law requiring 100 percent of military shipments to move in U.S.-flag vessels.
The formula calls for the low bidder to get the 65 percent share of cargoes and the low bidder from the other country to get the 35 percent portion.
Iceland Steamship was the low bidder last year under the original system, which remains in effect. If it does wind up charging its regular tariff rate on its cargo share, it would be moving that cargo at higher rates than Rainbow.
The Sealift Command declined to comment, but a spokesman indicated that no decision had been made on handling the rate situation.
Jon Steffanson, Iceland Steamship's manager in Norfolk, Va., told The Journal of Commerce that I expect some dialogue soon with the Sealift Command on the freight charge issue.
Rainbow's president, Henry Downing, confirmed his company's intentions to stick by the rate it offered last year. He also said he still would hope we can come to an agreement without this thing going to trial. We just want a system that doesn't disadvantage us competitively.
Because Judge Greene directed the command to follow the treaty and agreement with Iceland as it did last year, Mr. Downing said We don't feel we have any valid reason to change our rates.
No date has yet been set to argue the merits of Rainbow's challenge.
Judge Greene again left no doubt as to his views of the Sealift Command's decision to drop the small business reservation, change ship specifications, and divide the bidding into two groups - one for the 65 percent share and the second for the remainder.
In his opinion, Judge Greene made charges against the command similar to those he made in two hearings which produced a temporary restraining order halting a new solicitation for bid rates and then the preliminary injunction to prevent any changes until the case is decided on its merits.
He specifically accused the Sealift Command of:
* Engaging in a subterfuge to elbow Rainbow out of the Icelandic trade.
* Failing to follow the treaty's plan as the equivalent of domestic law.
* Laying down a pattern of false representations in explaining the changes it intended to make in the procurement system.
* Making untrue contentions in the three-year dispute involving the Iceland defense cargo movements.
Judge Greene's opinion said he sympathized with the government's problems with Iceland in accommodating that country's threats to end U.S. base privileges if the cargo dispute wasn't settled.
However, carrying out such an accommodation may not be done at the expense of one of the few remaining American-flag vessels and seamen left, he declared.
More particularly, this may not be done in violation of American law, of the language and purpose of a treaty, and of the solemn representations made to the United States Senate in connection with the ratification of that treaty.