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can be performed. The engines are designed so that much of the
wear occurs in replaceable and/or disposable parts.
Generally, a towboat’s engines are not removed from the
towboat in connection with the procedures involved, and it is not
necessary for a towboat to be in dry dock for the procedures to
be performed. The operational tolerances used by petitioners in
the performance of the maintenance procedures in issue are within
the manufacturer’s minimum recommended operating tolerances,
which are not as stringent as the manufacturer’s required
dimensional tolerances for new parts.
During the years in issue, the average cost incurred by
petitioners for the parts, labor, and supplies required to
perform the maintenance procedures in issue on both engines of a
representative towboat was $100,000. The cost of two comparable
new engines was approximately $1.5 million, and two rebuilt used
engines cost approximately $600,000. Approximately 30 percent to
35 percent of the $100,000 cost is for labor, and approximately
65 percent to 70 percent is for new or used parts. The $100,000
cost does not vary based on the age of a towboat or its engines.
Petitioners maintain records of the inspection results for
certain of the parts of a towboat’s engines that are cleaned and
inspected during the maintenance. With respect to the two
representative towboats, the relative number of parts covered by
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