HOME  |  CONTENTS  |  DISCUSSIONS  DISCUSSION ARCHIVES  |  BLOG  |  QUICK-KITs|  STATES

Loading

4 CFR 21.8 (e):  Payment of Protester's Costs -- Corrective Action

Comptroller General - Key Excerpts

New AGS requests that the agency reimburse AGS the costs associated with filing and pursuing its protest. The protester argues that the agency unduly delayed the implementation of its proposed corrective action despite AGS’s clearly meritorious protest. For the reasons discussed below, we deny the protester’s request.

Our Office may recommend that a protester be reimbursed the costs of filing and pursuing a protest where the contracting agency decides to take corrective action in response to the protest. Bid Protest Regulations, 4 C.F.R. § 21.8(e). Such recommendations are generally based upon a concern that an agency has taken longer than necessary to initiate corrective action in the face of a clearly meritorious protest, thereby causing protesters to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. QuanTech, Inc.--Costs, B-278380.3, June 17, 1998, 98-1 CPD ¶ 165 at 2-3. This basis for the award of costs does not exist in the instant protest, since the agency initiated corrective action promptly, i.e., prior to the agency report due date. See Veda Inc.--Entitlement to Costs, B-265809.2, July 19, 1996, 96-2 CPD ¶ 27 at 2.

We may also recommend recovery of protest costs, however, where an agency unduly delays, without adequate and reasonable explanation, the implementation of the promised corrective action that led to the dismissal of the earlier protest. AdaRose Inc.--Protest & Costs, B-299091.2, Jan. 14, 2008, 2008 CPD ¶ 18 at 4. In assessing whether an agency has unduly delayed the implementation of corrective action, we do not examine the length of elapsed time in a vacuum; instead we consider the reasonableness of the agency’s actions during that time period, the agency’s explanation for the delay, and whether performance of the requirement continued during the delay. See Pemco Aeroplex, Inc.--Recon. & Costs, B-275587.5, B-275587.6, Oct. 14, 1997, 97-2 CPD ¶ 102 at 7-8 (recommending the reimbursement of costs where the agency provided no meaningful explanation for its failure to take the first step in its promised corrective action, and where performance of the requirement continued during the four-month delay); Commercial Energies, Inc.--Recon. & Declaration of Entitlement to Costs, B-243718.2, Dec. 3, 1991, 91-2 CPD ¶ 499 at 6 (recommending the reimbursement of costs where the agency provided no explanation for waiting five months to implement its promised corrective action, while performance was permitted to continue on the protested contract).

Similarly, we may recommend the recovery of protest costs, where an agency’s failure to promptly implement its promised corrective action circumvents the goal of the bid protest system established by the Competition in Contracting Act, 31 U.S.C. § 3553 et seq.--that is, the economic and expeditious resolution of bid protests. Louisiana Clearwater, Inc.--Recon. & Costs, B-283081.4, B-283081.5, Apr. 14, 2000, 2000 CPD ¶ 209 at 6; see also SCB Solutions, Inc.--Recon., B-410450.2, Aug. 12, 2015, 2015 CPD ¶ 255 at 4-5 (granting reconsideration and recommending the reimbursement of costs where the agency’s actions resulted in the promised corrective action failing to remedy the concerns raised in the protest). This is particularly the case where the delay results in the protester being put through the expense of subsequently protesting the same protest issue again. See Envirosolve LLC, B-294974.4, June 8, 2005, 2005 CPD ¶ 106 at 9 (recommending the reimbursement of costs where the agency did little to implement its promised corrective action, effectively requiring the protester to file a second protest); Chase Supply, Inc.--Costs, B-411849.3, May 17, 2016, 2016 CPD ¶ 134 at 6 (recommending the reimbursement of costs where the agency’s failure to promptly implement its promised corrective action resulted in the protester being forced to pursue the issue again through two agency-level protests and two protests with our Office).

Here, we conclude that the agency did not unduly delay the implementation of its promised corrective action. In this regard, we note that the USDA sent a revised offering letter to the SBA within nine days of our dismissal of the underlying protest. Within a week of the SBA telling the agency that it would not accept the requirement into the 8(a) program, the agency took additional steps in furtherance of the corrective action. On October 26, an FSA contracting officer emailed an agency attorney to ask how the agency could preserve its fiscal year funding if it decided to procure the requirement through a competition amongst small businesses rather than as an 8(a) set-aside. Contracting Officer Email to Agency Counsel, Oct. 25, 2016. The agency attorney replied the next day, stating that the funds would be available for 100 days and could “only be used in furtherance of entering into a valid replacement contract for the Na Ali’i contract.” Email from Agency Attorney to Contracting Officer, Oct. 26, 2016. The agency attorney further stated that “[i]f the contracting officer determines that the 8(a) contract was not appropriate, then the FY16 funding may be used to allow for [a] small business competition for a replacement contract.” Id.

At this point, however, the FSA contracting staff incorrectly interpreted the attorney’s email to mean that the Na Ali’i contract had to remain open for 100 days in order for the funds to remain available for re-use. See Agency Resp. to GAO Req. for Supp. Info., Mar. 13, 2017. Due to this mistaken belief, the FSA contracting staff kept the Na Ali’i contract open until January 5, 2017. While the agency’s mistaken interpretation led to an additional delay of two and a half months before the agency began the process of terminating the contract awarded to Na Ali’i, the delay was not the result of any bad faith on the part of the agency and ultimately did not substantially affect the implementation of the corrective action. Indeed, during this time period, the agency kept the stay in place of Na Ali’i's contract and did not restart performance of the requirement. These actions are largely consistent with the agency’s proposed corrective action, which promised to stay performance of Na Ali’i's contract, submit a revised letter to the SBA, and, if the SBA did not approve the requirement into the 8(a) program, terminate the contract and reassess the agency’s available procurement options. See Agency Resp. to Objection to Corrective Action, Sept. 26, 2016, at 2.

AGS additionally argues that the USDA attempted to circumvent the promised corrective action by procuring the requirement through a modification of another contract. In our view, the record does not support this contention. In this regard, we note that the challenged modification involved the addition of one mid-level management analyst, while the Na Ali’i contract involved the provision of an entire “management consultancy,” consisting of various management consultants, analysts, and administrative assistants. Compare B-413912.1 Agency Report, Tab 17, Contract Modification, at 1 with B-413636.1 Protest, at 8. Thus, the size and scope of work for the instant requirement is fundamentally different from the size and scope of the challenged modification. Moreover, the record does not contain any indication that the modification was intended by the agency to circumvent the corrective action here.  (American Government Services, LLC--Costs B-413636.2: Apr 21, 2017)

Statutory vs Nonstatutory Protests

Boise contends that their protest was filed pursuant to our statutory jurisdiction, because our Office has historically taken statutory jurisdiction over “mixed transactions,” which, like this transaction, involve both a sale and a procurement of goods or services. Under the Competition in Contracting Act of 1984 (CICA) and our Office’s Bid Protest Regulations, we review protests concerning alleged violations of procurement statutes or regulations by federal agencies in the award or proposed award of contracts for procurement of goods and services, and solicitations leading to such awards. 31 U.S.C. §§ 3551, 3552; 4 C.F.R. § 21.1(a) (2009). As a general matter, sales by a federal agency, such as timber sales, are not procurements of property or services, and are therefore not within our Office’s bid protest jurisdiction. See 31 U.S.C. § 3551(1)(a). We also recognize, however, that certain transactions can involve both a sale of government property and a procurement of goods or services, and we have sometimes exercised jurisdiction in mixed, or bundled, transaction cases. See, e.g., Armed Forces Hospitality, LLC, B-298978.2, B-298978.3, Oct. 1, 2009, 2009 CPD ¶ 192.

It has consistently been our Office’s view that a mixed transaction, like this one, which includes the delivery of goods or services of more than de minimis value to the government, is a procurement within the meaning of CICA. See Public Commc’ns Servs., Inc., B-400058, B-400058.3, July 18, 2008, 2009 CPD ¶ 154 at 7. Here, however, the specific statute authorizing stewardship contracts provides that the transactions “may, at the discretion of the Secretary of Agriculture, be considered a contract for the sale of property under such terms as the Secretary may prescribe without regard to any other provision of law.” 16 U.S.C. § 6591c(d)(2) (emphasis added). Accordingly, the question of whether this transaction should be considered a mixed transaction reviewed pursuant to our statutory authority under CICA or as a timber sale reviewed pursuant to our nonstatutory agreement with the Forest Service hinges on the meaning of the “without regard” provision in 16 U.S.C. § 6591c(d)(2).

In general, the plain meaning of a statute’s provisions must be read in the context of the broader statutory scheme, and must be read in a way to give effect to all provisions of the law. See, e.g., K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291 (1988); Mastro Plastics Corp. v. National Labor Relations Board, 350 U.S. 270, 285 (1956), quoting United States v. Boisdore’s Heirs, 8 How. 113, 12 L.Ed. 1009 (1850); Lowe v. SEC, 472 U.S. 181, 207 n.53 (1985). In interpreting similar “notwithstanding any other provision of law” or “without regard to any other provision of law” provisions, we have considered whether the provisions of the relevant laws are directly in conflict when determining if such provisions displace generally applicable procurement laws. See, e.g., Jacobs COGEMA, LLC, B-290125.2, B-290125.3, Dec. 18, 2002, 2003 CPD ¶ 16 at 7-10 (similar provision did not displace generally applicable procurement law to the extent the requirements of the statutory provision were not actually inconsistent with generally applicable procurement laws); Pierce First Medical; Alternative Contracting Enterprises, LLC--Recon., B-406291.3, B-406291.4, June 13, 2012, 2012 CPD ¶ 182 at 4-5 (similar provision did not supersede certain generally applicable provisions of law that could be read in such a way as to give both provisions effect); c.f., RJO Enterprises, Inc., B-252232, June 9, 1993, 93-1 CPD ¶ 446 at 5-6 (similar provision displaces generally applicable procurement laws where the application of those laws would be inconsistent with the plain language of the provision, and would render it “a nullity”). Likewise, courts have consistently read similar provisions as superseding all other laws that are directly inconsistent with them. See, e.g., Cisneros v. Alpine Ridge Group, 508 U.S. 10, 18 (1993), citing Liberty Maritime Corp. v. United States, 928 F.2d 413 (D.C. Cir. 1991); Saco River Cellular, Inc. v. Federal Communications Comm., 133 F.3d 25, 30 (D.C. Cir. 1998); Illinois Nat’l Guard v. Federal Labor Relations Authority, 854 F.2d 1396, 1403 (D.C. Cir. 1988), quoting New Jersey Air National Guard v. FLRA, 677 F.2d 276, 283 (3d Cir. 1982).

In this case, the provision authorizes the agency to determine whether or not a stewardship contract is a sale of property and set its terms without regard to any other provision of law. 16 U.S.C. § 6591c(d)(2). On its face, the effect of the “without regard” provision is to specifically exempt the determination that a given contract is a sale of property from the statutory framework governing such a determination. Put another way, rejecting the agency’s determination that this transaction was a sale of property in favor of a contrary determination that CICA applies to this transaction would have the effect of rendering the “without regard” provision a nullity. We conclude, therefore, that the plain language of the statute gives the agency discretion to determine whether a contract undertaken using this authority is a sale of property without regard to any other provision of law, including CICA. We see no other reasonable interpretation of the broad and unequivocal language of the “without regard” clause in the statute.

The agency regulations implementing the statute provide that “[w]hen the value of timber or other forest products removed through the contract is equal to or exceeds the total value of the service work items received by the Forest Service, the activity shall be considered a sale of property[….]” 36 C.F.R. § 223.301(b)(2). In this case, the value of the forest products significantly exceeded the value of the services, and the agency accordingly determined to solicit the contract as a timber sale. Agency Response at 3. On these facts, we conclude that this transaction was properly solicited under the applicable regulations as a sale of property, which does not fall within our statutory bid protest jurisdiction, and that Boise’s protest was therefore a nonstatutory protest under our Office’s agreement with the Forest Service to decide protests of timber sales.

Recovery of Costs Following Corrective Action in Nonstatutory Protest

As its secondary argument, Boise correctly notes that under our regulations, as written, we are not precluded from recommending reimbursement of costs pursuant to section 21.8(e) of our Bid Protest Regulations. As a general matter, section 21.8(e) authorizes our Office to recommend the payment of protest costs where the agency has taken corrective action in response to a protest, as in this case. See 4 C.F.R. § 21.8(e). Section 21.13(b) of our regulations, governing nonstatutory protests, establishes only that the provisions of 4 C.F.R. § 21.8(d), generally authorizing the payment of protest costs where GAO has determined that the agency has violated law or regulation, do not apply to nonstatutory protests. See 4 C.F.R. § 21.13(b). Section 21.13(b) does not carve out a similar exception with respect to the recovery of costs under section 21.8(e). Id.

Section 21.8(e), on which the protester relies for the recovery of its costs, however, provides that our Office “may” recommend reimbursement of costs, and we have explained that the decision of whether to award costs is appropriately based on the circumstances of each case. See 4 C.F.R. § 21.8(e) and Alban Engine Power Systems, B-247614.2, Apr. 8, 1992, 92-1 CPD ¶ 354 at 2. We have noted, in another context, that the language of section 21.8(e) does not include a bright line rule concerning costs and the timing of corrective action, and that there may be circumstances where the award of costs, even where corrective action was taken after submission of the agency report, would not be justified, just as there could be circumstances where the award of costs would be appropriate even where corrective action was taken prior to report submission. See Alban Engine Power Systems, supra.

It is our view that the inconsistency identified by the protester is an oversight in our regulatory structure. We agree with the agency that there is no sound policy reason to recommend that protesters receive reimbursement of costs where the agency voluntarily takes corrective action, but not where we issue a decision on the merits sustaining the protest. We conclude that it would be inappropriate to recommend the reimbursement of protest costs following agency corrective action in response to a nonstatutory protest, where our Office could not recommend reimbursement if we had sustained the protest.

The request is denied.  (Boise Cascade Wood Products, LLC B-413987.2: Apr 3, 2017)


In their requests for costs, Technatomy and Octo ask our Office to recommend that CMS reimburse them for the costs associated with all of the issues they pursued. In response, the agency does not dispute that the protesters should be reimbursed their costs of pursuing their challenges to the agency’s best value determinations and the evaluation of Octo’s proposal under the small business participation factor, but maintains that the protesters’ reimbursement should be limited to these issues.

When a procuring agency takes corrective action in response to a protest, our Office may recommend under 4 C.F.R. § 21.8(e) that the agency reimburse the protester its reasonable protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing protesters to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Pemco Aeroplex, Inc.--Recon. & Costs, B-275587.5, B-275587.6, Oct. 14, 1997, 97-2 CPD ¶ 102 at 5. A protest is clearly meritorious when a reasonable agency inquiry into the protest allegations would show facts disclosing the absence of a defensible legal position. The Real Estate Ctr.--Costs, B‑274081.7, Mar. 30, 1998, 98-1 CPD ¶ 105 at 3. A GAO attorney will inform the parties through outcome prediction ADR that a protest is likely to be sustained only if he or she has a high degree of confidence regarding the outcome; therefore, the willingness to do so is generally an indication that the protest is viewed as clearly meritorious, and satisfies the “clearly meritorious” requirement for the purpose of recommending reimbursement of protest costs. National Opinion Research Ctr.--Costs, B-289044.3, Mar. 6, 2002, 2002 CPD ¶ 55 at 3; Inter-Con Sec. Sys., Inc.; CASS, a Joint Venture--Costs, B-284534.7, B-284534.8, Mar. 14, 2001, 2001 CPD ¶ 54 at 3.

As noted above, CMS does not contest the protesters’ requests that we recommend reimbursement of their protest costs associated with challenging the agency’s best value determinations, and, in the case of Octo, its challenge to the agency’s evaluation of its proposal under the small business participation factor, which were the topics of the ADR. Accordingly, the remaining question for resolution by our Office is whether the protesters should be reimbursed for all of the remaining challenges to the agency’s evaluation of proposals raised in the protests.

For purposes of determining entitlement to protest costs, we generally consider all issues concerning the evaluation of proposals to be intertwined--and thus not severable--and therefore generally will recommend reimbursement of the costs associated with both successful and unsuccessful challenges to an evaluation. Coulson Aviation (USA) Inc.; 10 Tanker Air Carrier, LLC--Costs, B-406920.6, B‑406920.7, Aug. 22, 2013, 2013 CPD ¶ 197 at 5. While we have, in appropriate cases, limited the award of protest costs to successful protesters where a part of their costs is allocable to a protest issue that is so clearly severable as to essentially constitute a separate protest, see, e.g., BAE Tech. Servs., Inc., B-296699.3, Aug. 11, 2006, 2006 CPD ¶ 122 at 3; Interface Flooring Sys., Inc.--Claim for Attorneys’ Fees, B-225439.5, July 29, 1987, 87-2 CPD ¶ 106 at 2-3, limiting recovery of protest costs in all cases to only those issues on which the protester prevailed would be inconsistent with the broad, remedial congressional purpose behind the cost reimbursement provisions of the Competition in Contracting Act. Fluor Energy Tech. Servs., LLC--Costs, B-411466.3, June 7, 2016, 2016 CPD ¶ 160 at 3; JV Derichebourg-BMAR & Assocs., LLC--Costs, B-407562.3, May 3, 2013, 2013 CPD ¶ 108 at 3.

CMS argues that the remaining challenges to the agency’s evaluation of proposals are clearly severable because, with the exception of Octo’s challenge to the evaluation of its proposal under the small business participation evaluation factor, the concerns identified in the outcome prediction ADR focused on the source selection decision, and not the evaluation conducted by the lower-level technical evaluators. We disagree. In our view, these other issues share common factual and legal bases; both the meritorious and non-meritorious issues are intertwined and interrelated with the agency’s flawed consideration of the relative merits of proposals. See Sevatec, Inc.--Costs, B-407880.3, June 27, 2013, 2013 CPD ¶ 163 at 3-4.

For example, both Technatomy and Octo argued, among other grounds, that the agency’s evaluation of their proposals under the process maturity factor was inconsistent with the solicitation’s evaluation criteria and disparate with regard to certain of the awardees. The protesters further contended that these errors, and related evaluation errors under the other non-price factors, impacted the reasonableness of the SSA’s best-value determination by limiting a reasonable comparative assessment of the proposals. Essentially, the challenges to the underlying evaluation and to the SSA’s subsequent comparative assessment of proposals both relied on the same factual and legal premises--that the agency had failed to reasonably consider the merits of the protesters’ proposals. Here the record demonstrates that the challenges shared a common factual and legal basis, and therefore we conclude that the underlying technical challenges were inextricably intertwined with the meritorious protest grounds challenging the agency’s best-value determinations.  (Technatomy Corporation; Octo Consulting Group, Inc.--Costs B-413116.49, B-413116.50: Dec 14, 2016)


When a procuring agency takes corrective action in response to a protest, our Office may recommend under 4 C.F.R. § 21.8(e) that the agency reimburse the protester its protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing protesters to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Pemco Aeroplex, Inc.--Recon. and Costs, B-275587.5, B-275587.6, Oct. 14, 1997, 97-2 CPD ¶ 102 at 5. A protest is clearly meritorious when a reasonable agency inquiry into the protest allegations would show facts disclosing the absence of a defensible legal position. The Real Estate Ctr.--Costs, B-274081.7, Mar. 30, 1998, 98-1 CPD ¶ 105 at 3. A GAO attorney will inform the parties through outcome prediction ADR that a protest is likely to be sustained only if he or she has a high degree of confidence regarding the outcome; therefore, the willingness to do so is generally an indication that the protest is viewed as clearly meritorious, and satisfies the “clearly meritorious” requirement for purposes of recommending reimbursement of protest costs. National Opinion Research Center--Costs, B-289044.3, Mar. 6, 2002, 2002 CPD ¶ 55 at 3; Inter-Con Sec. Sys., Inc.; CASS, a Joint Venture--Costs, B-284534.7, B-284534.8, Mar. 14, 2001, 2001 CPD ¶ 54 at 3.

In response to Fluor’s request, the agency concedes that the protester should be reimbursed its reasonable protest costs as they relate to challenges against the agency’s cost realism evaluation, but asserts that Fluor’s recovery should be limited to those protest grounds only. In this regard, the agency states in its response that “DOE believes the other grounds are discrete and severable and that it would have prevailed on the other protest grounds, and therefore protester would not be entitled to recovery on those allegations.” Agency Response, Aug. 20, 2015, at 1. However, DOE’s response provides no further explanation or argument in support of its belief that the other arguments raised in Fluor’s protest are discrete and severable.

For purposes of determining entitlement to protest costs, we generally consider all issues concerning the evaluation of proposals to be intertwined--and thus not severable--and therefore generally will recommend reimbursement of the costs associated with both successful and unsuccessful challenges to an evaluation. Coulson Aviation (USA) Inc.; 10 Tanker Air Carrier, LLC--Costs, B-406920.6, B-406920.7, Aug. 22, 2013, 2013 CPD ¶ 197 at 5. While we have, in appropriate cases, limited the award of protest costs to successful protesters where a part of their costs is allocable to a protest issue that is so clearly severable as to essentially constitute a separate protest, see, e.g., BAE Tech. Servs., Inc.--Costs, B-296699.3, Aug. 11, 2006, 2006 CPD ¶ 122 at 3; Interface Flooring Sys., Inc.--Claim for Attorneys’ Fees, B-225439.5, July 29, 1987, 87-2 CPD ¶ 106 at 2-3, limiting recovery of protest costs in all cases to only those issues on which the protester prevailed would be inconsistent with the broad, remedial congressional purpose behind the cost reimbursement provisions of CICA. TRESP Assocs., Inc.--Costs, B-258322.8, Nov. 3, 1998, 98-2 CPD ¶ 108 at 2.

In this case, as noted above, the agency has presented no argument or evidence to support its contention that Fluor’s other challenges should be severed from its clearly meritorious challenges to the agency’s cost realism evaluation. See Burns and Roe Servs. Corp.--Costs, B-310828.2, Apr. 28, 2008, 2008 CPD ¶ 81 at 3. Absent such support, we are unwilling to deviate from the general premise that a protester is entitled to all costs associated with both successful and unsuccessful allegations. Since a reasonable inquiry into Fluor’s initial protest would have revealed that the protest was clearly meritorious--where the record showed that the agency’s cost realism analysis did double-count various proposed costs--we conclude that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing protesters to expend unnecessary time and resources to make further use of the protest process in order to obtain relief, including the filing of a supplemental protest expanding upon its clearly meritorious protest grounds, and comments on the agency report concerning its initial protest allegations. In this context, we recommend that Fluor be reimbursed its reasonable costs incurred with respect to all issues pursued in its initial protest and supplemental protest.

The request that GAO recommend reimbursement of protest costs is granted.  (Fluor Energy Technology Services, LLC--Costs B-411466.3: Jun 7, 2016)  (pdf)


Under the Competition in Contracting Act of 1984 (CICA) our Office is authorized to recommend reimbursement of protest costs only where we find that an agency’s actions violated a procurement statute or regulation. 31 U.S.C. § 3554(c)(1). Our Bid Protest Regulations further provide that where the contracting agency decides to take corrective action in response to a protest, we may recommend reimbursement of protest costs, including reasonable attorneys’ fees. 4 C.F.R. § 21.8(e). Our Regulations do not contemplate a recommendation for reimbursement of protest costs in every case in which an agency takes corrective action; rather only where an agency unduly delays taking corrective action in the face of a clearly meritorious protest. Information Ventures, Inc.--Costs, B-294580.2 et al., Dec. 6, 2004, 2004 CPD ¶ 244 at 2. Thus, as a prerequisite to our recommending the reimbursement of costs where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious, that is, not a close question. PADCO, Inc.--Costs, B‑289096.3, May 3, 2002, 2002 CPD ¶ 135 at 3. A protest is clearly meritorious where a reasonable agency inquiry into the protester’s allegations would reveal facts showing the absence of a defensible legal position. Yardney Technical Prods., Inc., B-297648.3, Mar. 28, 2006, 2006 CPD ¶ 65 at 4.

Here, based on the record presented, we cannot conclude that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest. In response to the protester’s request for costs, the agency explains that it did not take corrective action prior to submitting its agency report, because our Office in a prior decision, Jacqueline R. Sims, dba JRS Staffing Servs., supra, denied JRS’s protest challenging similar issues. It also correctly points out that it immediately took corrective action the day after it was advised by the GAO attorney of its litigation risk. We agree with the agency that its reading of our prior decision was not unreasonable, and therefore, provided the BOP with a defensible legal position.[7]

While the protester asserts that our Office frequently awards protest costs after conducting ADR with the parties to a protest, JRS also acknowledges that litigation risk assessment ADR is different from outcome prediction ADR. JRS Request for Costs at 5. Furthermore, our Regulations provide for the reimbursement of protest costs only where an agency unduly delays taking corrective action in the face of a clearly meritorious protest. Information Ventures, Inc.--Costs, supra. While there may be instances where our Office offers ADR to the parties after identifying a clearly meritorious protest issue, it does not follow that ADR is only offered when a protest is clearly meritorious. In this regard, the offer of ADR--especially ADR that is limited to an assessment of litigation risk, or negotiation assistance--does not automatically translate to the conclusion that the protester should be awarded costs. Instead the determination of whether to recommend the reimbursement of costs rests on the factual and legal posture of each individual protest, which must be analyzed on a case-by-case basis.

On this record and based on the facts presented here, we cannot conclude that the agency unduly delayed in taking corrective action, or that JRS’s protest on this issue was clearly meritorious. Yardney Technical Prods., Inc., supra at 4 (the mere fact that an agency decides to take corrective action does not necessarily establish the absence of a defensible legal position, or that a statute or regulation has clearly been violated).

The request that we recommend reimbursement of costs is denied.  (JRS Staffing Services--Costs B-410708.3: Nov 9, 2015)  (pdf)


First, TRAX requests that we recommend that it be reimbursed the reasonable costs of filing and pursuing its initial protest, including attorneys’ fees. In this regard, TRAX asserts that all of its initial protest allegations were clearly meritorious, and that the Army’s corrective action was unduly delayed because it took action filed after the due date for the initial agency report and after comments and the supplemental protest were filed. Based upon our review of the record, we find no basis to recommend reimbursement for TRAX’s initial protest costs. For illustrative purposes, we discuss a few of these allegations below.

With regard to the OCI issue raised in TRAX’s initial protest, TRAX asserted that the awardee either failed to disclose a potential OCI issue, or that the Army failed to consider the issue, as required by the RFP. In response to the protest, the agency provided contemporaneous documentation demonstrating that the contracting officer considered the potential OCI issue and concluded that the risk of a potential OCI was low. AR at 16-22. Although TRAX disagreed in its comments regarding whether the contracting officer’s OCI analysis was reasonable, based on this record, it is clear that the contracting officer was aware of, and considered, the OCI issue. Thus, we do not find that the protest was clearly meritorious, or that the agency lacked a defensible legal position with respect to TRAX’s OCI allegations since the record demonstrates that the contracting officer did, in fact, consider the OCI issue contrary to TRAX’s assertions.[2]

TRAX’s initial protest also raised numerous challenges to the agency’s evaluation of TRAX’s and the awardee’s proposals. For example, TRAX asserted that the agency evaluated the offerors’ staffing levels unequally in the cost evaluation, arguing that the awardee improperly deviated from the RFP’s labor hour baseline. Protest at 27‑29. In response, the agency pointed to the provisions in the RFP that permitted offerors to propose deviations from the RFP’s labor hour baseline, based on the offeror’s unique management approach and promised efficiencies, as long as such efficiencies and management approach are fully explained and justified in the offeror’s proposal. See RFP at 102. In addition, the agency provided documentation of the awardee’s proposed staffing levels, and the agency’s evaluation thereof. On this record, we see no basis to conclude that the agency failed to comply with the RFP’s terms or that the agency evaluated the proposals unequally, as argued by the protester.

The protester also contends that its supplemental protest allegations regarding the agency’s exchanges with Jacobs were so intertwined with its initial protest allegations regarding the agency’s exchanges with TRAX that investigation by the Army of TRAX’s initial protest grounds should have revealed the flaws later identified by the supplemental protest. TRAX argues that, by waiting until after the agency report to take corrective action, the agency unduly delayed taking corrective action with regard to the supplemental protest grounds. For the reasons discussed below, we disagree.

With respect to the promptness of the agency’s corrective action under the circumstances, we review the record to determine whether the agency took appropriate and timely steps to investigate and resolve the impropriety. See Chant Eng’g Co., Inc.--Costs, B-274871.2, Aug. 25, 1997, 97-2 CPD ¶ 58 at 4; Carl Zeiss, Inc.--Costs, B-247207.2, Oct. 23, 1992, 92-2 CPD ¶ 274 at 4. In general, if an agency takes corrective action in response to a protest by the due date for its report in response to the protest, we consider such action to be prompt and will not recommend reimbursement of protest costs, even where the protest is clearly meritorious. See The Sandi‑Sterling Consortium--Costs, B‑296246.2, Sept. 20, 2005, 2005 CPD ¶ 173 at 3; HSQ Tech.--Costs, B-276050.2, June 25, 1997, 97-1 CPD ¶ 228 at 2; see also Metalcraft, Inc.--Costs, B-402181.3, May 17, 2010, 2010 CPD ¶ 116 at 3 (finding that the agency promptly took corrective action prior to the supplemental agency report where the allegations raised in the supplemental protest were not related to the initial protest such that the agency’s investigation of the initial protest should have revealed the asserted evaluation flaws).

Based on the record, we cannot conclude that the protester’s supplemental protest allegations were related to the initial protest such that the agency’s investigation of the initial protest should have revealed the asserted flaws in TRAX’s supplemental protest. The protester points to the following footnote in its initial protest to support its position that the initial protest raised concerns regarding the agency’s exchanges with the awardee: “[T]o the extent the Army engaged in discussions with Jacobs but not TRAX, that disparate treatment would constitute unlawfully unequal discussions . . . .” Protest at 25 n.8. In the absence of the documentation provided in the agency report, however, this allegation was speculative, and did not require a response by the agency. Rather, as discussed above, our Office requested that the agency provide documentation of its clarifications with the awardee in response to the protester’s allegations challenging the agency’s technical and cost evaluation of the awardee’s proposal, not based on the protester’s allegation regarding discussions. This is the documentation that prompted TRAX’s supplemental protest ground regarding the propriety of the agency’s exchanges with the awardee. Our Office then requested a separate report in response to the supplemental protest in recognition of the different nature of the supplemental protest allegations. Accordingly, because the protester’s supplemental protest allegations were not related to the initial protest such that the agency’s investigation of the initial protest should have revealed the asserted evaluation flaws, TRAX has not met the standard required by our Office for a recommendation to reimburse its protest costs. Metalcraft, Inc.--Costs, supra.  (TRAX International Corporation--Costs B-410441.5: Aug 26, 2015)  (pdf)


Where a procuring agency takes corrective action in response to a protest, we may recommend that it reimburse the protester its protest costs if we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest. See, e.g.,Taylor Consultants, Inc.--Costs, B-400324.3, Feb. 2, 2009, 2009 CPD ¶ 37 at 3. As a general rule, if an agency takes corrective action on or before the due date for its protest report, we regard such action as prompt and decline to favorably consider a request for cost reimbursement. See, e.g., J.A. Jones Mgmt. Servs., Inc., -- Costs, B-284909.4, July 31, 2000, 2000 CPD ¶ 123 at 4.

Here, there is no basis for Palmetto to assert that the agency delayed taking corrective action. Indeed, Palmetto’s reimbursement request expressly acknowledges that the action was taken “[o]nly a week after Palmetto filed its protest,” and further “agrees that the Agency’s corrective action in response to the protest renders the substance of the protest ‘academic’ and appropriate for dismissal.” Palmetto Reimbursement Request at 1-2. Since, as noted above, our Office will recommend reimbursement of protest costs only where an agency has unduly delayed taking corrective action, our recommendation of cost reimbursement is not appropriate here.

The request is denied.  (Palmetto Isotopes, B-410268.2: Jan 5, 2015)  (pdf)
 


When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. 4 C.F.R. § 21.8(e) (2013); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD ¶ 100 at 6. When an agency takes corrective action before the due date set for receipt of the agency report, our Office views such action as prompt and will not recommend the reimbursement of costs. The Sandi-Sterling Consortium--Costs, B-296246.2, Sept. 20, 2005, 2005 CPD ¶ 173 at 2-3.

Here, the due date set for the agency report, which consisted of the consolidated legal memorandum and contracting officer’s statement, was December 3. On November 30, the agency notified our Office of its intent to take corrective action. Because the agency’s corrective action was prompt, we deny the protester’s request that we recommend costs.

Moreover, we find no basis to conclude that MJLM’s initial protest grounds were clearly meritorious. As a prerequisite to our recommending that costs be reimbursed where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious. Apptis Inc.--Costs, B-402146.3, Mar. 31, 2010, 2010 CPD ¶ 123 at 4; Triple Canopy, Inc.--Costs, B-310566.9, B-400437.4, Mar. 25, 2009, 2009 CPD ¶ 62 at 3. MJLM’s initial protest alleged an improper bait and switch of staff, and of the center director; MJLM alleged the switch was evidenced by the awardee’s attempt to hire MJLM’s superior incumbent personnel after award. Protest at 3, 24-25. Generally, however, it is neither unusual nor inherently improper for an awardee to recruit and hire personnel previously employed by an incumbent contractor. Lifecare Mgmt. Partners, B-297078, B-297078.2, Nov. 21, 2005, 2006 CPD ¶ 8 at 6 n.11; see also AT&T Gov’t Solutions, Inc., B-406926 et al., Oct. 20, 2012, 2013 CPD ¶ 88 at 15 (even if there was evidence of an intent to switch, allegation of an impermissible “bait and switch” is not meritorious where there was no evidence of baiting). Accordingly, we are unable to conclude that the protest ground was clearly meritorious with respect to the protester’s claims of a flawed staffing evaluation.  (McConnell, Jones, Lanier & Murphy LLC--Costs, B-407706.3, May 28, 2013)  (pdf)
 


Where a procuring agency takes corrective action in response to a protest, our Office may recommend under 4 C.F.R. § 21.8(e) (2013) that the agency reimburse the protester its protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing protesters to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Pemco Aeroplex, Inc.--Recon. and Costs, B-275587.5, B-275587.6, Oct. 14, 1997, 97-2 CPD ¶ 102 at 5. A protest is clearly meritorious when a reasonable agency inquiry into the protest allegations would show facts disclosing the absence of a defensible legal position. The Real Estate Ctr.--Costs, B-274081.7, Mar. 30, 1998, 98-1 CPD ¶ 105 at 3. A GAO attorney will inform the parties through outcome prediction that a protest is likely to be sustained only if he or she has a high degree of confidence regarding the outcome; therefore, the willingness to do so is generally an indication that the protest is viewed as clearly meritorious, and satisfies the “clearly meritorious” requirement for purposes of recommending reimbursement of protest costs. National Opinion Research Center--Costs, B-289044.3, Mar. 6, 2002, 2002 CPD ¶ 55 at 3; Inter-Con Sec. Sys., Inc.; CASS, a Joint Venture--Costs, B-284534.7, B-284534.8, Mar. 14, 2001, 2001 CPD ¶ 54 at 3.

As noted above, the Navy does not contest the protester’s request that we recommend reimbursement of its protest costs associated with the staffing issue, which was the topic of ADR. Accordingly, the remaining question for resolution by our Office is whether the protester should be reimbursed for all issues raised in its protest.

Generally, we consider a successful protester entitled to costs incurred with respect to all issues pursued, not merely those upon which it prevails. In our view, limiting recovery of protest costs in all cases to only those issues on which the protester prevailed would be inconsistent with the broad, remedial Congressional purpose behind the cost reimbursement provisions of the Competition in Contracting Act. AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD ¶ 100 at 9. Nevertheless, failing to limit the recovery of protest costs in all instances of partial or limited success by a protester may result in an unjustified windfall to the protester and cost to the government. As a consequence, in appropriate cases we have limited our recommendation for the award of protest costs where a part of those costs is allocable to an unsuccessful protest issue that is so clearly severable from the successful issues as to constitute an essentially separate protest. Focused Mgmt., Inc., B-404029.6, Oct. 3, 2011, 2011 CPD ¶ 204 at 4; KAES Enters., LLC--Protest and Costs, B-402050.4, Feb. 12, 2010, 2010 CPD ¶ 49 at 4. In determining whether protest issues are so clearly severable as to constitute essentially separate protests, we consider, among other things, the extent to which the issues are interrelated or intertwined--i.e., the extent to which successful and unsuccessful arguments share a common core set of facts, are based on related legal theories, or are otherwise not readily severable. See Sodexho Mgmt., Inc.--Costs, B-289605.3, Aug. 6, 2003, 2003 CPD ¶ 136 at 29.

Here, we regard the protester’s objections to the evaluation of proposals as interrelated and not readily severable. In this connection, we generally consider issues concerning the evaluation of proposals to be intertwined. The Salvation Army Community Corrections Program--Costs, B-298866.3, Aug. 29, 2007, 2007 CPD ¶ 165 at 7; see also CNA Indus. Eng’g, Inc.--Costs, B-271034.2. Nov. 20, 1997, 97-2 CPD ¶ 149 at 3. Accordingly, we recommend that the Navy reimburse the protester for the costs of pursuing these issues.

We reach the opposite conclusion regarding the procurement integrity issue. This issue does not share a common core of relevant facts with--and thus is severable from--the protester’s other complaints. Moreover, we did not consider the argument raised by the protester pertaining to an alleged violation of FAR § 3.104-7 to be clearly meritorious. In our view, the argument raised involved a close question where the record indicated that the agency had reviewed the “Workers Committee” letter, which provided the basis for the Procurement Integrity Act issues, but the agency did not deem a further investigation warranted where the author was anonymous and where the allegations in the letter were unsubstantiated. See Honeywell Technology Solutions, Inc.--Costs, B-296860.3, Dec. 27, 2005, 2005 CPD ¶ 226 at 4 n.3. Thus, we do not recommend that the agency reimburse the protester the costs of pursuing the procurement integrity issue.  (JV Derichebourg-BMAR & Associates, LLC--Costs, B-407562.3, May 3, 2013)  (pdf)


URS requests that our Office recommend that the agency reimburse the protester’s costs of filing and pursuing its protest. URS argues that the IRS unduly delayed taking corrective action--as evidenced by its failure to do so until after filing of the agency report and submission of comments by the protester--and that its protest was clearly meritorious. The agency opposes URS’s request, arguing that the protest here was not clearly meritorious.

When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs, including reasonable attorneys’ fees, if based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Competition in Contracting Act of 1984 (CICA), 31 U.S.C. § 3554(c)(1)(A) (2006); Bid Protest Regulations, 4 C.F.R. § 21.8(e) (2012). A protest is clearly meritorious where a reasonable agency inquiry into the protester’s allegations would reveal facts showing the absence of a defensible legal position. Basic Commerce and Indus., Inc.--Costs, B-401702.3, Feb. 22, 2010, 2010 CPD ¶ 258 at 4; Information Ventures, Inc.--Costs, B-294567.2, Nov. 16, 2004, 2004 CPD ¶ 234 at 2.

Ordinarily, we do not regard a protest as clearly meritorious where resolution of the protest required further record development, such as a hearing, to complete and clarify the record. See Boston Harbor Dev. Partners, LLC--Costs, B-404614.5, Feb. 17, 2012, 2012 CPD ¶ 74 at 2-3. However, when corrective action is taken by an agency after a hearing has been scheduled, we may still conclude that the protest is clearly meritorious, where, as here, that conclusion is otherwise established by the record. See Basic Commerce and Indus., Inc.--Costs, supra; Eagle Home Med. Corp.--Costs, B-299821.3, Feb. 4, 2008, 2008 CPD ¶ 41 at 5 n.4.

In our view, URS’s protest challenging the adequacy of the IRS’s evaluation of VSE’s proposal with regard to the use of subcontractor FJC was clearly meritorious on the record provided to our Office with the agency report. In this regard, the agency’s evaluation of VSE’s proposed use of subcontractor FJC was entirely without support. IRS has not explained, nor is it otherwise evident from the record, how VSE could be considered eligible for award when VSE proposed to rely on a subcontractor (FJC) which VSE itself repeatedly characterized as simply the new name of a debarred company.

As a general rule, we recommend that a successful protester be reimbursed protest costs with respect to all issued pursued, not merely those upon which it prevails. Nevertheless, in appropriate cases, we have limited our recommendation for the award of protest costs where a part of those costs is allocable to one or more unsuccessful protest issues that are so clearly severable from the successful issues that it essentially constitutes a separate protest. In determining whether protest issues are so clearly severable as to essentially constitute separate protests, we consider, among other things, the extent to which the issues are interrelated or intertwined--i.e., whether the successful and unsuccessful arguments share a common set of facts, are based on related legal theories, or are otherwise not readily severable. Core Tech Int’l Corp.--Costs, B-400047.2, Mar. 11, 2009, 2009 CPD ¶ 59 at 8. We view URS’s other evaluation challenges--which we find were not clearly meritorious--as plainly severable from the challenges to the debarred subcontractor issue because the questions involved distinct aspects of the record, and were not intertwined factually or legally.  (URS Federal Services, Inc.--Costs, B-406140.4, Jul 17, 2012)  (pdf)


Where, as here, a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs, including reasonable attorneys’ fees, if, based on the circumstances of the case, we determine the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. 31 U.S.C. § 3554(c)(1)(A); 4 C.F.R. § 21.8(e); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD ¶ 100 at 6. A protest is clearly meritorious where a reasonable agency inquiry into the protester’s allegations would reveal facts showing the absence of a defensible legal position. Yardney Tech. Prods., Inc.--Costs, B-297648.3, Mar. 28, 2006, 2006 CPD ¶ 65 at 4. Additionally, while we consider corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, we generally do not consider it to be prompt where it is taken after that date. AGFA HealthCare Corp.--Costs, B-400733.6, Apr. 22, 2009, 2009 CPD ¶ 90 at 3-4.

The Air Force does not dispute that Blackstone’s argument that it failed to evaluate its past performance questionnaires was clearly meritorious. There is also no dispute that the protest as initially filed advised the agency that these questionnaires had been submitted by email and provided evidence from the firm’s references. The agency did not take prompt corrective action in response to this protest. As a result, we conclude that had the agency conducted an adequate search of its email system prior to filing its report it would have ascertained that it had, in fact, timely received two past performance questionnaires for Blackstone as argued by the protester.

As a general rule, we recommend that a successful protester be reimbursed protest costs with respect to all issues pursued, not merely those upon which it prevails. AAR Aircraft Servs.--Costs, supra at 9. Nevertheless, in appropriate cases, we have limited our recommendation for the award of protest costs where a part of those costs is allocable to an unsuccessful protest issue that is so clearly severable from the successful issues that it essentially constitutes a separate protest. In determining whether protest issues are so clearly severable as to essentially constitute separate protests, we consider, among other things, the extent to which the issues are interrelated or intertwined--i.e., whether the successful and unsuccessful arguments share a common set of facts, are based on related legal theories, or are otherwise not readily severable. Basic Commerce and Indus., Inc.--Costs, B-401702.3, Feb. 22, 2010, 2010 CPD ¶ 258 at 4.

Here, we do not find that Blackstone’s other arguments were clearly severable from its argument that the agency failed to evaluate its past performance questionnaires. All of the arguments concerned the reasonableness of the agency’s evaluation of its proposal under the past performance factor, such that the arguments were interconnected and based on common factual underpinnings. We agree with Blackstone that its protest issues were intertwined parts of its basic objection that the Air Force misevaluated its proposal under the past performance factor. T Square Logistics Servs. Corp., Inc.--Costs, B-297790.6, June 7, 2007, 2007 CPD ¶ 108 at 9; see also BAE Tech. Servs., Inc.--Costs, B-296699.3, Aug. 11, 2006, 2006 CPD ¶ 122 at 2. Under the circumstances, we find that all of Blackstone’s costs incurred in filing and pursuing its protest are reimbursable.

We therefore recommend that Blackstone be reimbursed its costs of pursuing its protest. Blackstone should submit its certified claim, detailing the time spent and costs incurred, directly to the agency within 60 days of its receipt of this decision. 4 C.F.R. § 21.8(f)(1).  (Blackstone Consulting, Inc., B-405909.2, Jan 31, 2012)  (pdf)


The protester requests that our Office recommend that the agency reimburse NxGen the costs of filing and pursuing its protest. Under the Competition in Contracting Act of 1984, our Office may recommend that protest costs be reimbursed only where we find that an agency’s action violated a procurement statute or regulation. 31 U.S.C. § 3554(c)(1) (2010). Our Bid Protest Regulations provide that where the contracting agency decides to take corrective action in response to a protest, we may recommend that the protester be reimbursed the costs of filing and pursuing its protest, including reasonable attorneys’ fees. 4 C.F.R. § 21.8(e) (2012). This does not mean that costs should be reimbursed in every case in which an agency decides to take corrective action; rather, a protester should be reimbursed its costs where an agency unduly delayed its decision to take corrective action in the face of a clearly meritorious protest. Griner’s-A-One Pipeline Servs., Inc.-Costs, B-255078.3, July 22, 1994, 94-2 CPD ¶ 41 at 5. When an agency takes corrective action before the due date set for receipt of the agency report, our Office views such action as prompt and will not recommend the reimbursement of costs. The Sandi–Sterling Consortium-Costs, B-296246.2, Sept. 20, 2005, 2005 CPD ¶ 173 at 2-3. Here, because the agency corrective action, taken in advance of the agency report due date, was not unduly delayed, there is no basis to grant the request for reimbursement of protest costs.  (NxGen Process Group, LLC--Costs, B-406650.2, May 24, 2012)  (pdf)


When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs, including reasonable attorneys’ fees, where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Bid Protest Regulations, 4 C.F.R. § 21.8(e) (2011); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD ¶ 100 at 6. Thus, as a prerequisite to our recommending that costs be reimbursed where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious, i.e., not a close question. Apptis Inc.--Costs, B-402146.3, Mar. 31, 2010, 2010 CPD ¶ 123 at 4. A protest is clearly meritorious where a reasonable agency inquiry into the protester’s allegations would reveal facts showing the absence of a defensible legal position. First Fed. Corp.--Costs, B-293373.2, Apr. 21, 2004, 2004 CPD ¶ 94 at 2.

Here, we conclude that it is not appropriate to recommend that Kingdomware recover its protest costs because, even if we determined that the agency’s corrective action was not prompt, the protest was not clearly meritorious. Whether the protest was meritorious was not apparent from the record, which is why GAO requested additional information and documentation from the VA. In this regard, the record included both documents consistent with the agency’s position that the order as awarded in 2010 included an option which was exercised in 2011, and documents indicating that the original order either never included such an option or that the option had been deleted at some point. Since the ultimate resolution of this matter required substantial further development as indicated, in part, by our Office’s request for additional information, the protest, in our view, presented a close question, and therefore was not clearly meritorious. See Alaska Structures, Inc.--Costs, B-298575.4, Jan. 22, 2007, 2007 CPD ¶ 15 at 6.  (Kingdomware Technologies--Costs, B-406228.2, May 10, 2012)  (pdf)
 


When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Bid Protest Regulations, 4 C.F.R. § 21.8(e) (2011); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD ¶ 100 at 6. Thus, as a prerequisite to our recommending that costs be reimbursed where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious, i.e., not a close question. J.F. Taylor, Inc.--Entitlement to Costs, B-266039.3, July 5, 1996, 96-2 CPD ¶ 5 at 3; Baxter Healthcare Corp.--Entitlement to Costs, B-259811.3, Oct. 16, 1995, 95-2 CPD ¶ 174 at 4-5; GVC Cos.--Entitlement to Costs, B-254670.4, May 3, 1994, 94-1 CPD ¶ 292 at 3. A protest is “clearly meritorious” where a reasonable agency inquiry into the protester’s allegations would reveal facts showing the absence of a defensible legal position. First Fed. Corp.--Costs, B-293373.2, Apr. 21, 2004, 2004 CPD ¶ 94 at 2.

We find that reimbursement is not appropriate in this case. With regard to LGS’s supplemental protest, the agency took corrective action promptly because it acted prior to the deadline for submitting its supplemental report. When an agency takes corrective action before the due date set for receipt of the agency report, our Office views such action as prompt and will not recommend the reimbursement of costs. The Sandi-Sterling Consortium--Costs, B-296246.2, Sept. 20, 2005, 2005 CPD ¶ 173 at 2-3. Thus, we have no basis to recommend reimbursement of costs associated with the supplemental protest.

We also find that the initial protest was not clearly meritorious. LGS’s initial protest focused on its assertion that the agency had applied an unstated preference for a specific technical solution, which impacted both the conduct of discussions and the best value determination. Even though the agency’s corrective action provided for reevaluation of the proposals, the agency does not concede that its original evaluation was based on a preference for AT&T’s technical solution; instead, it maintains that its decision to take corrective action was based on LGS’s supplemental protest, which specifically challenged the apparent unequal treatment of the vendors, as reflected in the assignment of strengths to AT&T’s proposal but not to LGS’s. Response to Cost Request at 2. While the evaluators assigned strengths to AT&T’s technical solution, based on our review of the record, it did not appear that the agency had an unstated preference for that solution. In this regard, the source selection authority recognized that AT&T’s solution was not a requirement, but agreed that it was more compatible with the existing site architecture than LGS’s solution and would significantly reduce the risk of integration problems. Price Negotiation Memorandum at 15. We thinks that the agency’s recognition of technical advantages associated with a more compatible solution did not constitute an improper unstated technical preference. Thus, LGS’s protest on that issue was not clearly meritorious.

The request for costs is denied.  (LGS Innovations LLC, B-405932.3, Apr 26, 2012)  (pdf)
 


SAIC protested that the agency unreasonably determined that the protester had an unequal access to information OCI which disqualified it from participating in the competition; that it failed to treat all offerors equally in this regard; and that it failed to follow the requirements of the Federal Acquisition Regulation (FAR). In response to SAIC's protest, the agency submitted a report to which SAIC filed comments and a supplemental protest. After the agency submitted a supplemental report and SAIC submitted its comments, the cognizant GAO attorney held an alternative dispute resolution (ADR) conference, in which he engaged in outcome prediction. He advised the parties that it was not clear from the record that the agency's determination to exclude SAIC was reasonable or that the agency had followed applicable regulations in excluding SAIC. The GAO attorney did not recommend that SAIC be included in the competition, but suggested that the agency follow the requirements of FAR sect. 9.506 and document the process and, either revise its determination and findings (D&F) to ensure its clarity, or provide SAIC an opportunity to respond to the agency's concerns in the D&F, clearly documenting whatever approach it ultimately adopts.

Subsequently, the agency advised our Office that it was electing to take corrective action. Specifically, the agency intends to document its compliance with FAR sect. 9.506; amend the RFP as necessary; prepare a new D&F document for SAIC's review and comment; a new final D&F if required; and take other corrective action as deemed appropriate. Air Force Proposed Corrective Action Letter at 1. We dismissed the protest as academic (B‑405155, B‑405155.2, Aug. 16, 2011).

When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs, including reasonable attorneys' fees, if, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. 31 U.S.C. sect. 3554(c)(1)(A) (2006); Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2011); AAR Aircraft Servs.-Costs, B‑291670.6, May 12, 2003, 2003 CPD para. 100 at 6. Our willingness to inform the parties through outcome prediction ADR that a protest is likely to be sustained, as we did here, is generally an indication that the protest is viewed as clearly meritorious, and satisfies the "clearly meritorious" requirement for purposes of recommending reimbursement of protest costs. National Opinion Research Ctr.-Costs, B-289044.3, Mar. 6, 2002, 2002 CPD para. 55 at 3. Additionally, while we consider corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, we generally do not consider it to be prompt where it is taken after that date. AGFA HealthCare Corp.--Costs, B-400733.6, Apr. 22, 2009, 2009 CPD para. 90 at 3-4.

Here, the agency acknowledges that it took corrective action in response to the ADR conference and states that it will consider a timely claim from SAIC for its reasonable costs, based upon a recommendation from our Office. Based on the clearly meritorious nature of the issues, and the agency's undue delay in taking corrective action, we recommend that SAIC be reimbursed the costs associated with filing and pursuing its protest, including reasonable attorneys' fees. SAIC should submit its certified claim, detailing the time spent and costs incurred, directly to the agency within 60 days of its receipt of this decision. 4 C.F.R. sect. 21.8(f)(1).

The request is granted.  (Science Applications International Corporation, B-405155.3, October 3, 2011)
 


When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs if, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest. 4 C.F.R. sect. 21.8(e); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 6. A protest is clearly meritorious where a reasonable agency inquiry into the protest allegations would have shown facts disclosing the absence of a defensible legal position. Core Tech Int'l Corp.--Costs, B-400047.2, Mar. 11, 2009, 2009 CPD para. 59 at 6. Additionally, while we consider corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, we generally do not consider it to be prompt if it is taken after that date. CDIC, Inc.--Costs, B-277526.2, Aug. 18, 1997, 97-2 CPD para. 52 at 2.
Here, GSA did not take corrective action until after the filing of its agency report on October 28 and after the subsequent December 8 ADR conference. Further, our advising the parties through outcome prediction ADR that the protest was likely to be sustained on the identified ground was an indication that we viewed that ground as clearly meritorious. National Opinion Research Ctr.--Costs, B-289044.3, Mar. 6, 2002, 2002 CPD para. 55 at 3. Accordingly, we do not consider its corrective action prompt.

Although we therefore recommend that Nationwide be reimbursed its costs, we do so only with regard to the issue identified as meritorious during the ADR conference. In this connection, when appropriate, we will limit our recommendation for reimbursement of protest costs where we determine that the successful and unsuccessful protest grounds clearly are severable. See, e.g., BAE Tech. Servs., Inc.--Costs, B-296699.3, Aug. 11, 2006, 2006 CPD para. 122 at 3. In making this determination, we consider, among other things, the extent to which the protest issues are interrelated or intertwined, e.g., whether the successful and unsuccessful issues share a common core set of facts, are based on related legal theories, or are otherwise not readily severable. See Sodexho Mgmt., Inc.--Costs, B-289605.3, Aug. 6, 2003, 2003 CPD para. 136 at 29.

We conclude that none of the other protest grounds raised in Nationwide's original and supplemental protests was related to the successful protest ground and, accordingly, those grounds are clearly severable. We viewed the successful protest ground--improper downgrading of the protester's proposal for lack of a facility security clearance--as meritorious because the agency's evaluation was based on a factor not set forth in the solicitation.

In contrast, the other protest grounds were based on different core sets of facts and were not based on interrelated legal theories. The first and fourth grounds for protest (inadequate debriefing and the alleged "pre-marketing" by the awardee) were not further developed as they failed to state a basis for protest. The protester's third original protest ground (failure to consider its lower priced offer) and supplemental protest ground (failure to evaluate its subcontractor) were evaluation challenges, but challenged the reasonableness of the agency's evaluation, not the application of an unstated evaluation factor. Additionally, as noted, we advised the parties during the ADR procedure that the supplemental protest ground appeared meritless, inasmuch as it was not supported by the record. Accordingly, we find Nationwide's other protest bases severable from its successful argument, and therefore limit our recommendation that Nationwide be reimbursed its protest costs to its single successful issue.  (Nationwide IT Services, Inc. - Costs, B-404160.2, August 8, 2011)  (pdf)


RBS requests that our Office recommend that the agency reimburse its costs of filing and pursuing its protests. RBS argues that the Corps unduly delayed taking corrective action in the face of its clearly meritorious protest because the Corps' reevaluation was done "without regard to any protest contentions" and "repeated most of the mistakes seen in the first protest." RBS Request for Costs, Mar. 24, 2011, at 2. RBS cites our decision in Holiday Inn-Laurel--Protest and Request for Costs, B‑270860.3, B-270860.4, May 20, 1996, 96-1 CPDpara. 259, to support its request.

When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs, including reasonable attorneys' fees, if, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. 31 U.S.C. sect. 3554(c)(1)(A) (2006); Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2011); AAR Aircraft Servs.-Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 5. Thus, as a prerequisite to our recommending the reimbursement of costs where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious, i.e., not a close question. Apptis Inc.-Costs, B-402146.3, Mar. 31, 2010, 2010 CPD para. 123 at 4. A protest is clearly meritorious where a reasonable agency inquiry into the protester's allegations would reveal facts showing the absence of a defensible legal position. Yardney Technical Prods., Inc.-Costs, B-297648.3, Mar. 28, 2006, 2006 CPD para. 65 at 4.

We have recognized, however, that the mere promise of corrective action, without reasonably prompt implementation, has the obvious effect of circumventing the goal of the bid protest system for the economic and expeditious resolution of bid protests. See Louisiana Clearwater, Inc.-Recon. and Costs, B-283081.4, B-283081.5, Apr. 14, 2000, 2000 CPD para. 209 at 6. Thus, where an agency fails to implement the promised corrective action, or implements corrective action that fails to address a clearly meritorious issue raised in an initial protest, such that the protester is put to the expense of subsequently protesting the very same procurement deficiency, the agency's action has precluded the timely, economical resolution of the protest. Id.

Here, there is no basis to conclude that the agency has unduly delayed taking corrective action in response to a clearly meritorious protest. In response to the first protest, the agency promptly indicated that it would take corrective action. To the extent that the protester maintains that it is entitled to reimbursement of its costs for filing the second protest because the Corps failed to implement its promised corrective action, the record does not establish that RBS's protests were clearly meritorious. Even where a protester alleges that an agency failed to timely implement promised corrective action, our recommendation that an agency reimburse a protester its protest costs must be based upon a showing that a procurement statute or regulation has been violated. See A-Ability Med. Equip., Inc.‑Costs, B-403256.3, Apr. 4, 2011, 2011 CPD para. 81 at 3 n.3. The mere fact that an agency decides to take corrective action does not establish that a statute or regulation clearly has been violated. Contrack Int'l, Inc.-Costs, B-401871.3, Feb. 17, 2010, 2010 CPD para. 122 at 4.

The Corps took corrective action in response to the protests prior to submitting its reports, and thus we have not been provided with a record of the agency's evaluation and selection decision. Further record development would be necessary to determine whether any of RBS's protest grounds had merit. Although RBS assumes that its protests have merit based upon the fact that the agency took corrective action in the face of two similar protests, the mere fact that the Corps decided to take corrective action does not establish that the protests were clearly meritorious. See Contrack Int'l, Inc.-Costs, supra, at 4; Alaska Structures, Inc.-Costs, B‑298575.4, Jan. 22, 2007, 2007 CPD para. 15 at 8.

The request for entitlement to protest costs is denied.  (Re-Engineered Business Solutions, Inc.--Costs, B-404214.4, July 14, 2011)  (pdf)


As a general rule, we recommend that a successful protester be reimbursed its incurred costs with respect to all issues pursued, not merely those upon which it prevails. AAR Aircraft Servs.--Costs, B‑291670.6, May 12, 2003, 2003 CPD para. 100 at 9. In our view, limiting recovery of protest costs in all cases to only those issues on which the protester prevailed would be inconsistent with the broad, remedial congressional purpose behind the protest cost reimbursement provisions of the Competition in Contracting Act of 1984, 31 U.S.C. sect. 3554(c)(1)(a) (2006). AAR Aircraft Servs.--Costs, supra; TRESP Assocs., Inc.--Costs, B‑258322.8, Nov. 3, 1998, 98–2 CPD para. 108 at 2. Nevertheless, failing to limit the recovery of protest costs in all instances of partial or limited success by a protester may also result in an unjust cost recovery. Accordingly, in appropriate cases, we have limited our recommendation for the award of protest costs where a part of those costs is allocable to an unsuccessful protest issue that is so clearly severable from the successful issues as to essentially constitute a separate protest. See, e.g., BAE Tech. Servs., Inc.--Costs, B‑296699.3, Aug. 11, 2006, 2006 CPD para. 122 at 3; Interface Floorings Sys., Inc.-Claim for Attorneys' Fees, B‑225439.5, July 29, 1987, 87‑2 CPD para. 106 at 2‑3.

In determining whether protest issues are so clearly severable as to essentially constitute separate protests, we consider, among other things, the extent to which the issues are interrelated or intertwined--i.e., the extent to which successful and unsuccessful arguments share a common core set of facts, are based on related legal theories, or are otherwise not readily severable. See Sodexho Mgmt., Inc.--Costs, B‑289605.3, Aug. 6, 2003, 2003 CPD para. 136 at 29.

In their requests for costs, KGL and IMG have asked our Office to recommend that DLA reimburse the costs associated with all the protest issues they pursued. While DLA concedes that both protesters should be reimbursed their costs of pursuing the price realism issue identified by our Office as clearly meritorious during the ADR session, Response at 2, DLA asserts that the remaining issues were not clearly meritorious and are severable from the price realism issue. KGL and IMG maintain that their remaining issues were intertwined with the price realism issue and thus, should not be severed.

Even though our outcome prediction ADR was based on the likely sustain of the price realism issue, in our view, the challenges to Anham's technical proposal evaluation were intertwined with and based on a related legal theory to the price realism issue. In this regard, where, as here, a solicitation expressly provides for evaluation of an offeror's understanding of the requirements, based on the realism of proposed prices, the agency is obliged to conduct a price realism analysis. Health Net Fed. Servs., LLC, B‑401652.3, B‑401652.5, Nov. 4, 2009, 2009 CPD para. 220 at 19. Typically, this analysis consists of an individualized approach to analyzing each proposal, including a review of each offeror's cost elements and technical proposal. Id. at 20; see Federal Acquisition Regulation sect. 15.404-1(d) (consideration of "unique methods of performance and materials described in the offeror's technical proposal"); Hughes STX Corp., B‑278466, Feb. 2, 1998, 98-1 CPD para. 52 at 8 (protest sustained where agency failed to consider offeror's technical approach as part of realism evaluation).

While price realism and technical issues are not always intertwined, see Basic Commerce and Indus., Inc.--Costs, B‑401702.3, Feb. 22, 2010, 2010 CPD para. 258 at 4 (cost realism issue severable from non-cost evaluation issues), here, the price realism and technical issues are interrelated and not readily severable. For example, KGL asserted that "Anham's price does not reflect the costs associated with maintaining readily accessible warehouse space, a sufficient amount of warehouse space, separate facilities for pork storage, force protected warehouse storage, and adequate truck transport," all issues that it raised in greater detail in its technical challenges. KGL Protest at 19. IMG asserted that Anham's "unreasonably and unrealistically low proposed price" was "indicative of substantial proposal and technical risk," and should have been evaluated as "technically unacceptable." IMG Protest at 37. It further argued that "Anham's lower, unrealistic price [could] only be the result of unrealistic assumptions or misunderstanding of contract requirements," and that the agency report "fail[ed] to show that the agency analyzed Anham's proposal to determine this." IMG Comments on Agency Report at 11. Based on the agency's need to review Anham's technical proposal as part of its price realism analysis, we conclude that the price realism and technical issues share a common legal theory and underlying facts. Thus, KGL's and IMG's protest costs related to these issues (including the risk evaluation) are reimbursable.

We reach the opposite conclusion with regard to KGL's and IMG's protests of DLA's evaluation of Anham's responsibility and past performance; the protesters' own past performance and technical evaluations; the conduct of discussions; and the best value determination. These issues are neither clearly meritorious, nor are they clearly intertwined with the price realism/Anham technical evaluation issues. Rather, whether the agency's evaluations in these areas were reasonable are based on different legal theories and underlying facts than were relevant to the successful price realism challenge. Thus, we do not recommend payment of protest costs associated with these issues.  (KGL Food Services, WLL; Intermarkets Global--Costs, B-400660.7; B-400660.8, June 20, 2011) (pdf)


Under the Competition in Contracting Act of 1984 (CICA), our Office may recommend that protest costs be reimbursed only where we find that an agency's action violated a procurement statute or regulation. 31 U.S.C. sect. 3554(c)(1) (2006). Our Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2010), provide that we may recommend that an agency pay the protester the reasonable costs of filing and pursuing the protest where the agency decides to take corrective action in response to the protest. This does not mean, however, that we will recommend that costs be reimbursed in every case in which an agency takes action that renders a protest academic; rather, we will recommend that a protester be reimbursed its costs only where the record established that (1) the agency action that rendered the protest academic was taken in response to the protest, see Takota Corp--Costs, B-299600.2, Sept. 18, 2007, 2007 CPD para. 171 at 3, and (2) the agency unduly delayed taking the action in the face of a clearly meritorious protest. Baine Clark--Costs, B-290675.3, Sept. 23, 2002, 2002 CPD para. 166 at 2. We consider a protest to be clearly meritorious when a reasonable agency inquiry into the protester's allegations would show that the agency lacked a defensible legal position, that is, they did not present close questions for which there was no defensible legal position. Triple Canopy, Inc.--Costs, B‑310566.9, B-400437.4, Mar. 25, 2009, 2009 CPD para. 62 at 3-4; SDA Inc.--Costs, B‑298216.2, Sept. 11, 2006, 2006 CPD para. 133 at 2.

CFS argues that our Office should view its protest as clearly meritorious because the Army lacked a defensible legal position to the protest and unduly delayed taking corrective action until 93 days after CFS filed its protest. The Army responds that its decision to take corrective action was a business decision, not based on the merits of CFS's protest, and that it presented persuasive and dispositive defenses to all of CFS's allegations.

The record shows that the agency's corrective action here was in response to CFS's protest and was taken very late in the protest process. As to the merits of the protest, we believe that the agency's actions here, in negotiating revised option prices with the contractor prior to the exercise of an option while initiating a competitive procurement for the same services, are subject to question. However, based on our review, we cannot conclude that CFS's protest was clearly meritorious.

The protest argument that may have the most merit involves the protester's assertion that the incentive option exercised was not an "evaluated" option in accordance with FAR sect. 17.207(f) and therefore cannot be exercised. That regulation states in pertinent part:

Before exercising an option, the contracting officer shall make a written determination for the contract file that exercise is in accordance with the terms of the option, the requirements of this section, and [FAR] Part 6. To satisfy requirements of Part 6 regarding full and open competition, the option must have been evaluated as part of the initial competition and be exercisable at an amount specified in or reasonably determinable from the terms of the basic contract.

FAR sect. 17.207(f). As noted, while the options included in MDI's contract were specifically evaluated at the time of award, shortly before the first of the incentive options were exercised the option prices were increased from those included in the contract as awarded. While not entirely clear from CFS's protest, we presume this is the basis for its argument that the option to be exercised was "unevaluated" and thus could not be exercised. See Major Contracting Servs, Inc., B-401472, Sept. 14, 2009, 2009 CPD para. 170 at 6, recon. denied, Department of the Army--Recon., B-401472.2, Dec. 7, 2009, 2009 CPD para. 250 (exercise of option to extend contract that was not evaluated as part of the initial competition amounts to a contract extension beyond the scope of the contract and therefore effectively constitutes a new procurement subject to the competition requirements of CICA).

We are unaware of any cases that specifically address the propriety of the agency's actions here. Nor do we decide here whether the exercise of the first incentive option violated any procurement statute or regulation. In this regard, it is clear that revised prices for the incentive options were not considered in the evaluation of the proposals for award and that these option prices were negotiated just before the first incentive option was exercised. On the other hand, the record demonstrates that these incentive options were evaluated, albeit at different prices, when the contract was awarded. Moreover, an agency has the authority to increase option prices pursuant to the Changes clause of the contract, and to exercise these options in appropriate circumstances, for example, where the work requirements have changed from the original contract, so long as the changes are within the scope of the contract. See Bulova Techs., Inc., B‑252660, July 15, 1993, 93‑2 CPD para. 23 at 4-6 (options for which prices have been appropriately increased within the scope of the contract can be exercised in appropriate circumstances); Gulton Indus., Inc., Engineered Magnetics Div., B‑203265, July 20,1982, 82-2 CPD para. 59 at 10-13 (same). Under the circumstances, we cannot find that the protester's argument here was clearly meritorious inasmuch as this involves a close question for which the agency had a defensible legal position. See Triple Canopy, Inc.--Costs, supra.

As to the issuance and cancellation of the RFP, CFS argues that the Army's ex‑parte negotiations with MDI, even though MDI was a prospective offeror under the RFP, were improper and thus the agency could not cancel the RFP. We have found no cases addressing the propriety of an agency renegotiating an option price with the contractor prior to its exercise where an RFP has already been issued for the option period but proposals have not yet been received. FAR sect. 17.207(d) specifically charges the contracting officer with the obligation to determine whether the exercise of the option is the most advantageous method of fulfilling the government's needs considering both price and other factors. While this regulation allows for the issuance of a solicitation to obtain offers that could be used to determine whether they produce a better price or more advantageous offer than available in the option, this regulation provides that this method should not be used if it is anticipated that the existing option is the best price available or that it is the more advantageous offer. FAR sect. 17.207(d)(1). Moreover, FAR sect. 17.207(d)(2) provides another acceptable basis to make a determination as to whether an option should be exercised as follows: "[a]n informal analysis of prices or an examination of the market indicates that the option price is better than prices available in the market or that the option is the more advantageous offer." We have found a reasonable basis exists to cancel an RFP rather than to continue with a negotiated procurement where an agency discovers that it is more advantageous to exercise an option under an existing contract. See Astronautics Corp. of Am., B-222414.2, B‑222415.2, Aug. 5, 1986, 86-2 CPD para. 147 at 2-3; cf. National Linen Serv., B-257112, B‑257312, Aug. 31, 1994, 94-2 CPD para. 94 at 5 (cancellation of invitation for bids based on potential cost savings by obtaining laundry services under a proper modification to an existing contract). Thus, these protest allegations are not clearly meritorious.

Moreover, CFS has not shown that the exercise of the option was not the most advantageous method of fulfilling Government's need, price and other factors considered. See FAR sect. 17.207(c)(3). For example, CFS has not alleged that its offered price would be lower than the price contained in the incentive option contained in MDI's contract.

CFS's arguments about the possibility that MDI had knowledge of information in the market survey, which assisted it in its negotiations with the Army, and that the Army's actions were otherwise biased or in bad faith were not clearly meritorious. In this regard, the Army categorically denied these allegations, which appear to be based upon pure speculation, and has provided sworn statements from the affected contracting personnel to support this denial. Government officials are presumed to act in good faith, and a protester's claim that contracting officials were motivated by bias or bad faith must be supported by convincing proof; our Office will not attribute unfair or prejudicial motives to procurement officials on the basis of inference of supposition. Operation Support and Servs., B-299660.2, Sept. 24, 2007, 2007 CPD para. 182 at 3.

In sum, we find CFS's protest was not clearly meritorious and deny its request that we recommend reimbursement of its protest costs.  (The CFS Group, LLC--Costs, B-403539.3, May 13, 2011)  (pdf)


After developing the record, including obtaining an agency report and comments on the report, our Office conducted an outcome prediction alternative dispute resolution (ADR) conference. In the course of the ADR, the cognizant GAO attorney advised the agency of her view, based on the record, that the agency had misevaluated Symvionics' past performance. Specifically, the GAO attorney stated that the record indicated that in evaluating Symvionics' past performance, the agency did not consider whether the task order at issue was relevant as defined by the solicitation, that is whether it satisfied the minimum contract value and man‑year requirements and the requirement for management of personnel performing engineering and either mathematical/statistical analysis, computer science or information technology support. The GAO attorney further advised the parties that the protest likely would be sustained on that ground, with the recommendation that the agency reevaluate Symvionics' past performance in accordance with the solicitation. The agency agreed to take corrective action consistent with the outlined recommendation. The protester now requests that we recommend reimbursement of the costs of filing and pursuing their protests, including reasonable attorneys' fees.

When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs, including reasonable attorneys' fees, if, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. 31 U.S.C. sect. 3554(c)(1)(A) (2006); Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2010); AAR Aircraft Servs.--Costs, B‑291670.6 , May 12, 2003, 2003 CPD para. 100 at 6.

A protest is clearly meritorious where a reasonable agency inquiry into the protest allegations would have shown facts disclosing the absence of a defensible legal position. Core Tech Int'l Corp.--Costs, B-400047.2, Mar. 11, 2009, 2009 CPD para. 59 at 6.

Here, the Air Force asserts that the RFP indicated that the agency would evaluate past performance on the basis of previous efforts and contracts and never indicated that various task orders would be evaluated as individual or independent efforts.

As an initial matter, we note that our willingness to inform the parties through outcome prediction ADR that a protest is likely to be sustained, as we did here, is generally an indication that the protest is viewed as clearly meritorious, and satisfies the "clearly meritorious" requirement for purposes of recommending reimbursement of protest costs. National Opinion Research Ctr.--Costs, B-289044.3, Mar. 6, 2002, 2002 CPD para. 55 at 3. Here, our conclusion that the protest likely would be sustained was not based on any determination that the final rating was to be assigned at the task order level rather than the contract level. Rather, the GAO attorney noted that the record indicated that in evaluating the contract under which the disputed task order was issued, the agency did not consider the relevance of the task order effort as defined by the solicitation, including whether the effort was for management of personnel performing engineering and either mathematical/statistical analysis, computer science or information technology support. Regardless of whether or not the final rating was assigned at the task order level or the contract level, it was inconsistent with the solicitation for the agency to base the rating on an effort that was not evaluated for compliance with the solicitation definition of relevance. Further, we believe a reasonable inquiry would have shown facts disclosing the absence of a defensible legal position.

With regard to whether corrective action is prompt, where, as here, the merits of the issue were clearly discernable prior to the agency report, corrective action taken after the agency report is not prompt. CDIC, Inc.--Costs, B-277526.2, Aug. 18, 1997, 97-2 CPD para. 52 at 2.

We therefore recommend that Symvionics be reimbursed the costs associated with filing and pursuing its protest on this issue, including reasonable attorneys' fees. Symvionics should submit its certified claim, detailing the time spent and costs incurred, directly to the agency within 60 days of its receipt of this decision. 4 C.F.R. sect. 21.8(f)(1).  (Symvionics, Inc.--Costs, B-403230.6, May 16, 2011)  (pdf)


Greentree requests that our Office recommend that the agency reimburse its costs of filing and pursuing its protest of the terms of the replacement solicitation. When a procuring agency takes corrective action in response to a protest, our Office may recommend that the agency reimburse the protester its costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing a protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. 4 C.F.R. sect. 21.8(e) (2010); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 5. A protest is clearly meritorious where a reasonable agency inquiry into the protest allegations would have shown facts disclosing the absence of a defensible legal position. Inter-Con Sec. Sys., Inc.; CASS, a Joint Venture--Costs, B-284534.7, B-284534.8, Mar. 14, 2001, 2001 CPD para. 54 at 3. Here, our willingness to inform the parties through outcome prediction ADR that the protest was likely to be sustained on the identified ground was an indication that we view that ground as clearly meritorious for purposes of recommending reimbursement of protest costs. T Square Logistics Servs. Corp.--Costs, B-297790.4, Apr. 26, 2006, 2006 CPD para. 78 at 5.

The Army argues that this protest cannot be deemed clearly meritorious overall because "Greentree was protesting numerous solicitations under many theories" and "was not successful overall in its protests and it had the opportunity to submit a proposal on the revised solicitation." AR at 2. We find neither merit nor logic in the Army's position. Greentree's unsuccessful protest of the cancellation of the prior solicitation has no bearing on the merits of its challenge to the adequacy of the new solicitation. In this regard, Greentree is requesting reimbursement of protest costs only with respect to its protest of the terms of solicitation No. -899F. Moreover, the fact that Greentree was provided an opportunity to submit a tender in response to the solicitation also does not address whether Greentree's protest of the solicitation terms was clearly meritorious.

The Army also argues that, in concluding that the solicitation was ambiguous, we failed to recognize the discretion given transportation officers under the Defense Transportation Regulation to make a best value decision. We disagree. In the ADR conference, the GAO attorney advised the parties that we were likely to sustain the protest and would recommend that the Army clarify the basis for award. Making the basis for award clear to vendors in the government's solicitation does not, in any way, restrict the agency's discretion to make a best value determination--it simply communicates the agency's intentions.

In short, we find Greentree's protest of the terms of solicitation No. -899F to be clearly meritorious. As we indicated in our ADR conference, we agree with Greentree that solicitation No. -899F was ambiguous and needed to be amended.

The Army also contends that its corrective action was not unduly delayed, citing AVIATE, L.L.C., B-275058.6, B-275058.7, Apr. 14, 1997, 97-1 CPD para.162. In this regard, the Army argues that in the context of the procurement under the Defense Transportation Regulation, there is "no case law directly on point with regard to the discretion afforded the Transportation Officer in making a best value determination." AR at 2.

In determining whether an agency's corrective action was unduly delayed, we review the record to determine whether the agency took appropriate and timely steps to investigate and resolve the impropriety. Eagle Home Medical Corp.--Costs, B‑299821.3, Feb. 4, 2008, 2008 CPD para. 41 at 5. We generally do not consider corrective action to be prompt if it is taken after the due date for the agency report responding to the protest. Apptis Inc.--Costs, B-402146.3, Mar. 31, 2010, 2010 CPD para. 123 at 4.

Here, we think the Army unduly delayed taking corrective action in the face of a clearly meritorious protest. While we agree that there may be little case law on procurements conducted under the Defense Transportation Regulation, unlike the situation we faced in AVIATE, the law is clear with respect to an agency's obligation to inform competitors in a federal procurement of the basis for its selection decision. In any competitive federal procurement, competing firms must be informed of the basis for selection and how their offers or tenders will be evaluated. See, e.g., Richard S. Cohen, B-256017.4, B-256017.5, June 27, 1994, 94-1 CPD para. 382 at 6. Given that the Army elected to ignore this basic precept, prepared a report defending its actions, required the protester to file comments rebutting the agency's report before taking corrective action, and required our office to convene an ADR conference before acting, we conclude that the agency's corrective action was unduly delayed.

We recommend that the Army reimburse the protester its costs of filing and pursuing the protest of the terms of solicitation No. -899F, including attorneys' fees. Greentree should submit its claim for costs, detailing and certifying the time expended and costs incurred, directly to the Army within 60 days of receipt of this decision. 4 C.F.R. sect. 21.8(f)(1).  (Greentree Transportation Company, Inc.--Costs, B-403556.4, May 16, 2011)  (pdf)
 


Iron Vine requests that we recommend that the agency reimburse its costs of pursuing its initial and supplemental protests. Iron Vine argues that USAID unduly delayed taking corrective action where Iron Vine's protest grounds were clearly meritorious. Based on the record before us, we cannot conclude that Iron Vine's initial protest grounds were clearly meritorious.

When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs, including reasonable attorneys' fees, if, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. 31 U.S.C. sect. 3554(c)(1)(A) (2006); Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2010); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 5. The mere fact that an agency decides to take corrective action does not also establish that a statute or regulation clearly has been violated. Contrack Int'l, Inc.--Costs, B‑401871.3, Feb. 17, 2010, 2010 CPD para. 122 at 4. Thus, as a prerequisite to our recommending the reimbursement of costs where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious, i.e., not a close question. Apptis Inc.--Costs, B-402146.3, Mar. 31, 2010, 2010 CPD para. 123 at 4. A protest is clearly meritorious where a reasonable agency inquiry into the protester's allegations would reveal facts showing the absence of a defensible legal position. Yardney Technical Prods., Inc.--Costs, B-297648.3, Mar. 28, 2006, 2006 CPD para. 65 at 4.

Here, we find no basis to conclude that Iron Vine's initial protest grounds were clearly meritorious, which is an essential prerequisite to its request for costs. See Taylor Consultants, Inc.--Costs, B-400324.3, Feb. 2, 2009, 2009 CPD para. 37 at 3. Although Iron Vine argued in its initial protest that USAID failed to evaluate quotations in accordance with identified evaluation factors, the agency responded that its evaluated weaknesses corresponded to PWS tasks and the solicitation provided for evaluating vendors' approaches to performing PWS tasks. On this record, we do not find that the protest was clearly meritorious with respect to whether the agency used unstated factors in evaluating Iron Vine's quotation.

Iron Vine also argues that its assertion that USAID failed to document its tradeoff analysis and selection decision was clearly meritorious. The protester argues, specifically, that certain requirements of Federal Acquisition Regulation (FAR) Part 15 were not met here. However, as the agency argues, the procurement was conducted under FAR Subpart 8.4, not FAR Part 15. For procurements conducted under FAR Subpart 8.4 and requiring a statement of work, FAR sect. 8.405-2(e) designates the minimum documentation requirements. USGC Inc., B-400184.2 et al., Dec. 24, 2008, 2009 CPD para. 9 at 8-9.

We have reviewed the documentation--and the rationale for the selection decision set forth therein--and we are not prepared to conclude that the documentation was inadequate. As a result, we do not find this protest ground to be clearly meritorious.

The request for entitlement to protest costs is denied.  (Iron Vine Security, LLC - Costs, B-403578.3, April 15, 2011)  (pdf)
 


CCite requests that we find that the protester should be reimbursed its costs of filing and pursuing its protests, because the Army has unreasonably delayed implementing the promised corrective actions that caused our Office to dismiss its protests as academic. We disagree.

We have recognized that the reimbursement of protest costs may be appropriate where an agency does not timely implement the promised corrective action that led to the dismissal of an earlier protest. See AdaRose Inc--Protest and Costs, B‑299091.2, Jan. 14, 2008, 2008 CPD para. 18 at 4; Louisiana Clearwater, Inc.--Recon. and Costs, B-283081.4, B-283081.5, Apr. 14, 2000, 2000 CPD para. 209 at 6; Commercial Energies, Inc.--Recon. and Declaration of Entitlement to Costs, B‑243718.2, Dec. 3, 1991, 91-2 CPD para. 499 at 6. Our Office has also found that months-long delays do not by themselves constitute an undue delay where an agency reasonably justifies or explains those delays. See, e.g., J&J/BMAR Joint Venture, LLP--Costs, B-290316.7, July 22, 2003, 2003 CPD para. 129 at 3 (9-month delay in the implementation of corrective action was not an undue delay).

Here, the Army states that following the dismissal of CCite's protests, in early November 2010, the agency transferred the procurement to a new contracting office "to provide a fresh perspective on a problematic procurement." CO's Statement, B‑402792.5, B-403769.2, at 3. The agency's contract specialist in the new contracting office began reviewing the requirements and, on December 17, 2010, drafted a request for proposals (RFP) for these requirements. AR, B-403769.2, Memorandum of Law, at 5. Revisions were made to the draft RFP in January 2011. On February 16, the Army posted a synopsis of its requirements on the FedBizOpps website, and on February 19, the RFP was posted on the website as a small business set-aside. The RFP has since been admended three times. The closing date for receipt of proposals was March 3.

The record shows that the Army did not unduly delay implementing its promised corrective action. Instead, from the time the Army proposed corrective action in October, 2010, until the issuance of the RFP as a small business set-aside four months later (in February, 2011), the Army acted as it promised in its corrective action letter. Accordingly, we find no basis to recommend that CCite should be reimbursed its costs for filing and pursuing its protests.

The request is denied.  (Computer Cite--Costs, B-402792.5; B-403769.2, April 14, 2011)  (pdf)


A-Ability requests that we recommend that the agency pay the protest costs associated with both protests, arguing that the VA's corrective action in response to the first protest failed to address a clearly meritorious protest allegation, and that the agency's failure to take appropriate corrective action required the protester to file a second protest.

Where a procuring agency takes corrective action in response to a protest, we may recommend that it reimburse the protester its protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Taylor Consultants, Inc.--Costs, B-400324.3, Feb. 2, 2009, 2009 CPD para. 37 at 3. Generally, when an agency takes corrective action before the due date for its report, our Office regards such action as prompt and will not recommend reimbursement of costs. The Sandi-Sterling Consortium--Costs, B‑296246.2, Sept. 20, 2005, 2005 CPD para. 173 at 2-3. We have recognized, however, that the mere promise of corrective action, without reasonably prompt implementation, has the obvious effect of circumventing the goal of the bid protest system for the economic and expeditious resolution of bid protests. See Louisiana Clearwater, Inc.--Recon. and Costs, B-283081.4, B-283081.5, Apr. 14, 2000, 2000 CPD para. 209 at 6. Thus, where an agency fails to implement the promised corrective action, or implements corrective action that fails to address a clearly meritorious issue raised in an initial protest, such that the protester is put to the expense of subsequently protesting the very same procurement deficiency, the agency's action has precluded the timely, economical resolution of the protest. Id.

Here, there is no basis to conclude that the agency has unduly delayed taking corrective action in response to a clearly meritorious protest. In response to the first protest filed by A-Ability, the agency promptly indicated that it would take corrective action. To the extent A-Ability maintains that its protest costs are justified because the agency has taken "corrective action" in response to A-Ability's second protest, A-Ability's argument is misplaced. A-Ability's second protest was not rendered academic based on the agency's representation that it would correct the same evaluation issues raised in A‑Ability's first protest. Rather, the protest was rendered academic for reasons not directly related to the protest issues raised by A‑Ability--the agency's decision to cancel and re-issue the solicitation in order to clarify its requirements and evaluation criteria. Since A-Ability's second protest was rendered academic for reasons not directly related to the protest allegations, there was no corrective action; that is, there was no indication that the agency recognized the merits of the protest and was taking action to remedy the impropriety identified by the protester.[3] See Digital Sys. Group, Inc.‑‑Entitlement to Costs, B-257835.2, Apr. 3, 1995, 95-1 CPD para. 173. Accordingly, there is no basis for recommending the award of costs. (A-Ability Medical Equipment, Inc.--Costs, B-403256.3, April 4, 2011)  (pdf)


Under the Competition in Contracting Act of 1984, our Office may recommend that protest costs be reimbursed only where we find that an agency's action violated a procurement statute or regulation. 31 U.S.C. sect. 3554(c)(1) (2010). Our Bid Protest Regulations provide that, where the contracting agency decides to take corrective action in response to a protest, we may recommend that the protester be reimbursed the costs of filing and pursuing its protest, including reasonable attorneys' fees. 4 C.F.R. sect. 21.8(e) (2010). This does not mean that costs should be reimbursed in every case in which an agency decides to take corrective action; rather, a protester should be reimbursed its costs where an agency unduly delayed its decision to take corrective action in the face of a clearly meritorious protest. Griner's-A-One Pipeline Servs., Inc.--Costs, B-255078.3, July 22, 1994, 94-2 CPD para. 41 at 5.

The protester recognizes that, as a general matter, when an agency takes corrective action before the due date set for receipt of the agency report, our Office views such action as prompt and will not recommend the reimbursement of costs, even where the protest is clearly meritorious. The Sandi-Sterling Consortium--Costs, B‑296246.2, Sept. 20, 2005, 2005 CPD para. 173 at 2-3. Livanta argues, however, that this general rule should not apply here given the agency's active defense of the protest, which included the filing of a request for partial dismissal and the early submission of documents, which caused Livanta to incur significant costs that would have been unnecessary if the agency "had promptly and reasonably investigated the matter." Request at 2.

With regard to the agency's dismissal request, an agency's pursuit of a reasonable procedural litigation strategy before our Office does not constitute undue delay in taking corrective action. Carlson Wagonlit Travel--Request for Declaration of Entitlement to Costs, B-266337.3 et al., July 3, 1996, 96-2 CPD para. 99 at 4. A contracting agency, in defending protests filed with our Office, should be permitted to vigorously assert procedural and substantive defenses in good faith without having to risk the assessment of costs. Id. This is especially true where, as here, our Office granted the agency's motion for partial dismissal. See id. There is simply no basis to assert that the agency's good faith, successful efforts to narrow the scope of the protest should result in a recommendation that it pay the protester's costs, where the agency took corrective action prior to the due date for the agency report.

Moreover, we conclude that the agency's corrective action was prompt, notwithstanding the fact that the agency produced relevant documents in advance of the agency report due date, and thereby may have caused the protester to expend the time and expense in reviewing these documents. Early document production, which is something agencies provide voluntarily, facilitates the efficient resolution of protests since it allows for the early resolution of issues concerning the scope of the agency's document production in response to the protest and because it can lead to the identification of supplemental protest issues early in the protest process, thereby affording protesters and our Office greater flexibility in resolving such issues. Given these considerations, it would not be appropriate to penalize agencies, by subjecting them to the payment of protest costs, solely for utilizing this highly useful, but voluntary process. Thus, we find the agency's corrective action--initiated prior to the due date for the agency report--to have been prompt and to not warrant payment of protest costs.  (Livanta, LLC-Costs, B-404215.2, April 5, 2011)  (pdf)


By letter dated October 4, the Army notified our Office of its intent to take corrective action by terminating the HPS contract and reexamining its noncompetitive acquisition strategy. We concluded that the Army's actions rendered Firetrace's protest of the sole-source contract award to HPS academic and, on October 7, we dismissed the protest. Firetrace Aerospace, LLC, B-403193, B-403193.2, Oct. 7, 2010.

Firetrace requests that our Office recommend that the agency reimburse the protester's costs of filing and pursuing its June 30 protest. Firetrace argues that the Army unduly delayed taking corrective action--as evidenced by its failure to do so until after filing of the agency report and submission of comments by the protester--and that its protest was clearly meritorious. The agency opposes Firetrace's request, arguing that the protest here was not clearly meritorious.

Under the Competition in Contracting Act of 1984 (CICA), our Office may recommend that protest costs be reimbursed where we find that an agency's action violated a procurement statute or regulation. 31 U.S.C. sect. 3554(c)(1). Our Bid Protest Regulations further provide that where the contracting agency decides to take corrective action in response to a protest, we may recommend that the protester be reimbursed the costs of filing and pursuing its protest, including reasonable attorneys' fees. 4 C.F.R. sect. 21.8(e) (2010).

Our Regulations do not contemplate a recommendation for the reimbursement of protest costs in every case in which an agency takes corrective action, but rather only where an agency unduly delays taking corrective action in the face of a clearly meritorious protest. Waterfront Techs., Inc.--Costs, B-401948.8, Sept. 14, 2010, 2010 CPD para. 232 at 3. Thus, as a prerequisite to our recommending the reimbursement of costs where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious, i.e., not a close question. Id. A protest is clearly meritorious where a reasonable agency inquiry into the protester's allegations would reveal facts showing the absence of a defensible legal position. Information Ventures, Inc.--Costs, B‑294567.2, Nov. 16, 2004, 2004 CPD para. 234 at 2.

Here, based on the record presented (including the agency report and the protester's comments thereto), we cannot conclude that Firetrace's protest was clearly meritorious. The Army explained, in response to Firetrace's protest, why an approved source requirement for the HEMTT FTFS blanket kits was necessary and not unduly restrictive: "[i]t is beyond cavil that an agency need not risk injury to personnel or property in order to conduct a competitive acquisition." AR, July 30, 2010, at 1 (citing Signals & Sys., Inc., B-288107, Sept. 21, 2001, 2001 CPD para. 168 at 10). Further, the Army argued that while it restricted the contract to an approved product or source and utilized a qualification requirement, it provided other potential sources like Firetrace with a reasonable opportunity to qualify. As Firetrace was both required to seek qualification in advance and independent of any specific acquisition, and contributed to the failure to obtain source approval prior to award, the Army argued, there was no agency obligation to delay award to determine if or when Firetrace would become an approved source. Lastly, the Army asserted that the J&A executed here in support of the sole-source award to HPS as well as its internal source approval program regulation met the statutory and regulatory requirements for establishing a qualification requirement. Based on the record here, and even resolving doubts in Firetrace's favor, the issues presented here were indeed close questions.

The request for a recommendation that the agency reimburse Firetrace's protest costs is denied.  (Firetrace Aerospace, LLC--Costs, B-403193.4, December 17, 2010) (pdf)


When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs, including reasonable attorneys' fees, if, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Competition in Contracting Act of 1984 (CICA), 31 U.S.C. sect. 3554(c)(1)(A) (2006); Bid Protest Regulations, 4 C.F.R. sect. 21.8(e). A protest is clearly meritorious where a reasonable agency inquiry into the protest allegations would have shown facts disclosing the absence of a defensible legal position. While we consider corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, we generally do not consider it to be prompt where it is taken after that date. Alsalam Aircraft Co.--Costs, B‑401298.3, Nov. 5, 2009, 2009 CPD para. 208 at 3.

Ordinarily, we would not regard a protest as clearly meritorious where resolution of the protest required further record development, such as a hearing, to complete and clarify the record. However, when corrective action is taken by an agency after a hearing has been scheduled, we may still conclude that the protest is clearly meritorious, where, as here, that conclusion is otherwise established by the record. Eagle Home Med. Corp.--Costs, B- 299821.3, Feb. 4, 2008, 2008 CPD para. 41 at 4 n.4.

In our view, BCI's protest challenging the adequacy of the Navy's cost realism analysis was clearly meritorious on the record provided to our Office with the agency report. In short, the record lacked support for the Navy's conclusion that McKean could perform as it had proposed for the costs provided. Indeed, as BCI pointed out in its comments on the agency report, the evaluators' expressed concerns about the realism of McKean's rates remained unresolved when the Navy selected McKean for award. Based on our review, we are not persuaded that there is any meaningful difference between the Navy's explanation of an error in the "methodology" of the cost realism analysis, and BCI's challenge.

As a general rule, we recommend that a successful protester be reimbursed protest costs with respect to all issues pursued, not merely those upon which it prevails. Nevertheless, in appropriate cases, we have limited our recommendation for the award of protest costs where a part of those costs is allocable to an unsuccessful protest issue that is so clearly severable from the successful issues that it essentially constitutes a separate protest. In determining whether protest issues are so clearly severable as to essentially constitute separate protests, we consider, among other things, the extent to which the issues are interrelated or intertwined--i.e., whether the successful and unsuccessful arguments share a common set of facts, are based on related legal theories, or are otherwise not readily severable. Core Tech Int'l Corp.--Costs, B-400047.2, Mar. 11, 2009, 2009 CPD para. 59 at 8. We view BCI's challenges to the non-cost evaluation (which it has not shown were clearly meritorious) as severable from the challenge to the cost realism analysis because the questions involved distinct aspects of the record, and were not intertwined factually or legally.  (Basic Commerce and Industries, Inc.--Costs, B-401702.3,February 22, 2010)  (pdf) 


When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2010); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 6. A protest is "clearly meritorious" where a reasonable agency inquiry into the protester's allegations would reveal facts showing the absence of a defensible legal position. First Fed. Corp.--Costs, B‑293373.2, Apr. 21, 2004, 2004 CPD para. 94 at 2. With respect to the promptness of the agency's corrective action under the circumstances, we review the record to determine whether the agency took appropriate and timely steps to investigate and resolve the impropriety. See Chant Eng'g Co., Inc.--Costs, B‑274871.2, Aug. 25, 1997, 97-2 CPD para. 58 at 4; Carl Zeiss, Inc.--Costs, B-247207.2, Oct. 23, 1992, 92‑2 CPD para. 274 at 4. While we consider corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, we generally do not consider it to be prompt where it is taken after that date. See CDIC, Inc.--Costs, B-277526.2, Aug. 18, 1997, 97-2 CPD para. 52 at 2.

The agency opposes the requested recommendation, maintaining that the issues raised in the initial and first two supplemental protests were not clearly meritorious, that FSI's third supplemental protest was the first time FSI challenged the qualifications of KIRA's key personnel and provided specifics about the lack of those qualifications, and that its corrective action thus was prompt, since it was taken prior to its report in response to the third supplemental protest. Agency Response at 3; see AGFA HealthCare Corp.--Costs, B‑400733.6, Apr. 22, 2009, 2009 CPD para. 90 at 3-4 (corrective action taken on supplemental issues considered prompt where initial issues were not clearly meritorious).

We do not agree with the agency that FSI's challenge to the qualifications of KIRA's key personnel was first raised in the third supplemental protest; rather, we find that this argument was part of FSI's initial protest alleging misrepresentation/bait and switch. In this regard, in its initial protest, FSI listed three possible explanations for KIRA's alleged attempts to replace its proposed assistant project manager (APM), including the assertion that the APM failed to meet the PWS requirements. Initial Protest at 14. FSI also asserted in its original protest that KIRA "wholly failed to propose all eight (8) key personnel that met the [solicitation] requirements and who were available and committed to this contract." Id. at 18. In our view, these allegations were sufficiently specific that a reasonable investigation by the agency would have led it to conclude that some--if not all--of KIRA's proposed key personnel failed to meet the PWS requirements.

For example, while the solicitation [deleted] required [deleted] to have completed a [deleted], the resume for KIRA's [deleted] did not indicate any such [deleted]. Similarly, even though the [deleted] was required to have a minimum of [deleted] the resume for KIRA's [deleted] showed less experience. The resumes of other key personnel (including the [deleted]) also lacked evidence of required [deleted]. We note that, even though the TET rated KIRA's proposal satisfactory (defined as "meets all requirements"), it recognized that KIRA's [deleted], and the SSA recognized [deleted]. Consensus Technical Factor Ratings at 2-3; Vendor Selection Report at 5. Having waited until after the filing of its report and FSI's comments and supplemental protest, we find that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest assertion.

However, we find no undue corrective action delay with regard to the remainder of FSI's protest grounds, because those issues were not clearly meritorious. Prior to receipt of the agency report, we found a number of FSI's initial and supplemental issues failed to state valid bases of protest.[1] See AGFA HealthCare Corp.--Costs, supra (dismissed issues are not clearly meritorious). We do not find the remaining issues--concerning the evaluation of FSI's proposal--to be clearly meritorious because further development of the record would have been required in order for us to determine their merits. In this regard, the agency provided detailed responses in its report and we were planning to request a supplemental report addressing FSI's comments and supplemental issues at the time of the agency's corrective action.

Our recommendation for reimbursement does not extend beyond FSI's challenge to the evaluation of the qualifications of KIRA's key personnel. While, as a general rule, we consider a successful protester entitled to be reimbursed costs incurred with respect to all issues pursued, not merely those upon which it prevails (Burns and Roe Servs. Corp.--Costs, B‑310828.2, Apr. 28, 2008, 2008 CPD para. 81 at 2-3), we nevertheless will limit a recommendation for reimbursement of costs where we determine that successful and unsuccessful protest grounds are clearly severable. See, e.g., BAE Tech. Servs., Inc.--Costs, B‑296699.3, Aug. 11, 2006, 2006 CPD para. 122 at 3. In making this determination, we consider, among other things, the extent to which the claims are interrelated or intertwined, e.g., whether the successful and unsuccessful claims share a common core set of facts, are based on related legal theories, or are otherwise not readily severable. See Sodexho Mgmt., Inc.--Costs, B‑289605.3, Aug. 6, 2003, 2003 CPD para. 136 at 29. Here, we conclude that FSI's meritorious issue concerning the evaluation of KIRA's proposed key personnel is factually unrelated to, and therefore clearly severable from, the remaining technical evaluation issues, all of which concern the evaluation of FSI's own proposal. Accordingly, our recommendation for reimbursement is limited to FSI's costs related to the key personnel evaluation issue.  (Facility Services Management, Inc.--Costs, B-402757.5, September 27, 2010) (pdf)


Apptis requests that we recommend that the agency reimburse its costs of pursuing its initial and supplemental protests. For the reasons discussed below, we agree with the Army that reimbursement is not warranted here because the agency's corrective action was prompt with regard to the supplemental protest arguments, and because the initial protest arguments were not clearly meritorious.

When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs, including reasonable attorneys' fees, if, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. 31 U.S.C. sect. 3554(c)(1)(A) (2006); Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2009); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 6. The mere fact that an agency decides to take corrective action does not also establish that a statute or regulation clearly has been violated. Id. Thus, as a prerequisite to our recommending the reimbursement of costs where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious, i.e., not a close question. PADCO, Inc.--Costs, B-289096.3, May 3, 2002, 2002 CPD para. 135 at 3. A protest is clearly meritorious where a reasonable agency inquiry into the protester's allegations would reveal facts showing the absence of a defensible legal position. Yardney Technical Prods., Inc., B-297648.3, Mar. 28, 2006, 2006 CPD para. 65 at 4. Additionally, while we consider corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, we generally do not consider it to be prompt where it is taken after that date. AGFA HealthCare Corp.--Costs, B-400733.6, Apr. 22, 2009, 2009 CPD para. 90 at 3-4.

We conclude that the Army's corrective action was prompt with regard to Apptis' supplemental protest arguments. As discussed above, the protester raised a number of supplemental arguments on November 27. Because the agency's corrective action took place prior to the submission of its supplemental agency report responding to these arguments, such that Apptis did not need to expend unnecessary time or resources responding to the report, we view the corrective action as prompt. See AGFA HealthCare Corp.--Costs, supra.

With regard to the initial protest arguments cited by the protester in its request for reimbursement, we conclude, as explained below, that none of them are clearly meritorious. As discussed above, our Office requested additional information from the agency in order to further develop the record with respect to these issues. In our view, the need for such additional development demonstrates that the protest arguments were not clearly meritorious. See Alaska Structures, Inc.-Costs, B-298575.4, Jan. 22, 2007, 2007 CPD para. 15 at 6 (requesting additional record development by the agency in response to protester's comments demonstrates that a protest issue is a "close question," that is, not clearly meritorious).

First, Apptis contends that the Army improperly failed to consider its proposal in the price-technical tradeoff analysis for award. As discussed above, however, the agency did not consider the protester's proposal for award because the solicitation stated that only offerors whose proposals received an overall technical score of acceptable or better would be eligible for award. In light of the protester's overall technical rating of marginal, we think that the agency's decision here was consistent with the solicitation and provides no basis to conclude that this protest ground was clearly meritorious. Instead, for us to conclude that this ground of the protest was clearly meritorious, Apptis must demonstrate that its proposal should have received an overall rating of acceptable or better. As discussed below, we do not find Apptis' challenges to the evaluation of its technical proposal--which received marginal ratings under three of the five evaluation factors--to be clearly meritorious.

Next, Apptis argues that the Army unreasonably rated its proposal as marginal under the technical approach factor. The overall marginal rating for this factor was based on one weakness and two significant weaknesses regarding the protester's transition approach, which was one of four equally-weighted subfactors under the technical approach factor. AR, Tab 10, ADM, at 7. The agency concluded that these weaknesses outweighed the single significant strength that related to its understanding of ITSM and incident and problem management requirements. Id.

Apptis argues that the weaknesses assessed for its transition approach were not reasonable. As discussed above, we asked the agency to provide more information concerning its evaluation of Apptis' proposed transition. GAO Email, Dec. 2, 2009, at 1. Because the agency took corrective action before providing this information, the record is not complete, and provides no basis to find that this protest argument is clearly meritorious. See Alaska Structures, Inc.--Costs, supra.

The protester also contends that because the overall factor rating of marginal was based on weaknesses under a single subfactor, the agency unreasonably did not accord equal weight to all of the four subfactors. Our Office has recognized that where, as here, a solicitation does not disclose the relative weight of evaluation factors or subfactors in a FAR Part 15 procurement, they should be considered approximately equal in importance or weight. Bio-Rad Labs., Inc., B-297553, Feb. 15, 2006, 2007 CPD para. 58 at 6. The Army does not dispute that the subfactors should have been equally weighted, but argues that it reasonably concluded that the weaknesses regarding transition outweighed a single strength relating to the first two subfactors, and that the overall rating of marginal was reasonable. See AR, Tab 10, ADM, at 7. In our view, the protester incorrectly assumes that an assessment of weaknesses under one of four equally-weighted subfactors precludes an overall rating of marginal. The TOPR stated that a "marginal" rating reflects a proposal that "does not demonstrate a full understanding of all the requirements and may pose a risk that the offeror might fail to perform satisfactorily without significant Government oversight or participation." TOPR at 9. We think that, under the evaluation standards announced in the solicitation, weaknesses relating to an offeror's understanding of the requirements could have reasonably resulted in an overall rating of marginal for the technical approach factor--assuming the agency's assessment of the weaknesses was reasonable.

Next, Apptis argues that the Army failed to identify or give credit to Apptis for its experience or knowledge of the BOC requirements for the solicitation. Here also, our Office asked the agency for additional information regarding its evaluation of Apptis' proposal. For the reasons discussed above, we think that the record here was not adequately developed, and thus does not provide a basis for us to conclude that the initial protest argument was clearly meritorious.

Finally, Apptis argues that the agency unreasonably evaluated its proposal under the service desk/ITSM experience factor. Specifically, the protester contends that although the TOPR stated that offerors would be evaluated on the basis of either corporate or proposed staff experience, see TOPR at 6, the agency assessed weaknesses in the protester's proposal based on an alleged lack of staff experience, to the disregard of its demonstrated corporate experience. AR, Tab 10, ADM, at 8. The protester also contends that the agency unreasonably concluded that its proposed staff did demonstrate the required experience. In its response to the protest, the Army acknowledged that Apptis' proposal demonstrated corporate experience, but argues that the agency viewed the experience as insufficiently related to the requirements of the solicitation. CO Statement at 16. As the protester notes in its comments on the AR, however, the agency's position is not reflected in the contemporaneous record; in fact, the protester's corporate experience is not discussed. See AR, Tab 8, TEP Evaluation, at 5; Tab 10, ADM, at 8.

Although we did not request an additional response from the agency on this issue, we now view the record as requiring additional development concerning whether the agency's evaluation reflects contemporaneous judgments regarding Apptis' corporate experience, as well as other areas of the agency's evaluation. For this reason, do not think that this issue meets our requirement that a protest argument be clearly meritorious, i.e. not a close question.

The request for entitlement to protest costs is denied.  (Apptis Inc.--Costs, B-402146.3, March 31, 2010)  (pdf)


DGR argues that it should be reimbursed for the costs that it incurred in preparing its comments on the agency report because the filing of these comments would have been unnecessary if the agency had terminated Inuit's contract at the time it was informed that SBA had determined Inuit to be other than small and thus ineligible for award in mid-September.

Under the Competition in Contracting Act of 1984, our Office may recommend that protest costs be reimbursed where we find that the agency's action violated a procurement statute or regulation. 31 U.S.C. sect. 3554(c)(1) (2006). Our Bid Protest Regulations provide that where the contract agency decides to take corrective action in response to a protest, we may recommend that the protester be reimbursed the costs of filing and pursuing its protest, including reasonable attorneys' fees. 4 C.F.R. sect. 21.8(e) (2009). This does not mean that we will recommend that costs be reimbursed in every case in which an agency takes action that renders a protest academic; rather, we will recommend that a protester be reimbursed its costs only where the record establishes that (1) the agency action that rendered the protest academic was taken in response to the protest, and (2) the agency unduly delayed taking the action in the face of a clearly meritorious protest. RANA Tech.--Costs, B‑400471.2, Feb. 3, 2009, 2009 CPD para. 38 at 3.  (DGR Associates, Inc.--Costs, B-401791.5, February 16, 2010) (pdf)


When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs, including reasonable attorneys' fees, if, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Competition in Contracting Act of 1984 (CICA), 31 U.S.C. sect. 3554(c)(1)(A) (2006); Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2009); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 6. We generally consider corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, but not where it is taken after that date. CDIC, Inc.--Costs, B-277526.2, Aug. 18, 1997, 97-2 CPD para. 52 at 2. A protest is clearly meritorious where a reasonable agency inquiry into the protest allegations would have shown facts disclosing the absence of a defensible legal position. Core Tech Int'l Corp.--Costs, B-400047.2, Mar. 11, 2009, 2009 CPD para. 59 at 6.

Here, as noted, we found the record showed that the agency had misevaluated Alion's cost proposal in a manner that was prejudicial to the protesters, since Alion had deviated significantly from the proposed costs of the other offerors due to its significantly lower level of effort. Notwithstanding this clear evaluation error, the agency elected to defend its evaluation, which caused the protesters to incur the expense of continuing to pursue their protests. These are precisely the expenses our requirement for prompt agency action is intended to avoid. We therefore recommend that the protesters be reimbursed the costs associated with filing and pursuing their protests on this issue, including reasonable attorneys' fees.

As for the protest costs associated with the protesters' remaining arguments, we did not consider the merits of those arguments because, as the GAO attorney advised the parties during the ADR procedure, those assertions would be rendered academic by the agency's proposed corrective action. Since we find that those issues are not clearly meritorious on their face, and since we do not decide academic protests, Dyna-Air Eng'g Corp., B-278037, Nov. 7, 1997, 97-2 CPD para. 132, there is no basis for us to recommend reimbursement of the protest costs related to their pursuit.

The requests are granted as detailed above. (ManTech Systems Engineering Corporation; TWD & Associates, Inc., B-401542.6; B-401542.7, December 22, 2009) (pdf)


Talladega Machinery & Supply Company, Inc. of Talladega, Alabama, requests that we recommend that it be reimbursed the costs of filing and pursuing its protest of the award of a contract to Valley Machine Company (VMC) under request for proposals (RFP) No. W911KF-08-R-0010, issued by the Department of the Army for the abrasive cleaning, light oiling, and painting of combat vehicle parts; the RFP was issued to augment the agency's in-house performance of such services at the Anniston Army Depot (ANAD). We dismissed the protest after the agency notified us that it was terminating the awardee's contract because of changed requirements; specifically, the agency reported that, due to workload reductions, it no longer had a need for the solicited services. The protester, alleging that its protest was clearly meritorious and the agency unreasonably delayed taking corrective action in response to the protest, contends that it should recover its protest costs.

(sections deleted)

Our Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2009), provide we may recommend that an agency pay protest costs where the agency decides to take corrective action in response to the protest. This does not mean, however, that we will recommend that costs be reimbursed in every case in which an agency takes action that renders a protest academic; rather, we will recommend that a protester be reimbursed its costs only where the record establishes that (1) the agency action that rendered the protest academic was taken in response to the protest, see Takota Corp.--Costs, B‑299600.2, Sept. 18, 2007, 2007 CPD para. 171 at 3, and (2) the agency unduly delayed taking the action in the face of a clearly meritorious protest. Baine Clark--Costs, B‑290675.3, Sept. 23, 2002, 2002 CPD para. 166 at 2. We consider a protest to be clearly meritorious when a reasonable agency inquiry into the protester's allegations would show that the agency lacked a defensible legal position. SDA Inc.--Costs, B‑298216.2, Sept. 11, 2006, 2006 CPD para. 133 at 2.

Talladega argues that the agency's decision to terminate the award due to the reduced workload should be viewed by our Office as having been made in response to its protest, arguing in essence that by challenging the agency's decision to evaluate surge prices based on only 2 percent of the estimated maximum quantities, Talladega called into question the agency's estimates, which led to (or should have led to) the decision to terminate. We disagree. As noted above, the RFP was issued on the assumption that the required workload would exceed the in-house capacity; the actual circumstances as they unfolded during the protest revealed that the in-house capacity in fact was sufficient to meet the agency's needs and thus that the additional contractor support was not required. While Talladega challenged the evaluation of prices based on only 2 percent of the estimated maximum surge quantities, we simply fail to see the required nexus between that contention and the decision to terminate. At best, we understand Talladega to be arguing that its protest forced the agency to reconsider its requirements, which should have revealed that the requirement for contractor support no longer existed, since the agency apparently had been experiencing some reduction in workload during the procurement; however, it was in fact the actual events as they developed during the pendency of the protest that led to the termination decision, once it became apparent that the services under the RFP were not required to meet the agency's actual needs.  (Talladega Machinery & Supply Company, Inc.--Costs, B-401049.3, July 6, 2009) (pdf)


Where an agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Bid Protest Regulations, 4 C.F.R. sect. 21.8(e); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 6. A protest is "clearly meritorious" where a reasonable agency inquiry into the protester's allegations would reveal facts showing the absence of a defensible legal position. Overlook Sys. Techs., Inc.--Costs, B-298099.3, Oct. 5, 2006, 2006 CPD para. 184 at 6. With respect to the promptness of the agency's corrective action under the circumstances, we review the record to determine whether the agency took appropriate and timely steps to investigate and resolve the impropriety. See Chant Eng'g Co., Inc.--Costs, B-274871.2, Aug. 25, 1997, 97-2 CPD para. 58 at 4; Carl Zeiss, Inc.--Costs, B-247207.2, Oct. 23, 1992, 92-2 CPD para. 274 at 4. As a general rule, so long as the agency takes corrective action by the due date of its protest report, we consider the action to be prompt. CDIC, Inc.--Costs, B‑277526.2, Aug. 18, 1997, 97-2 CPD para. 52.

CDG asserts that because several of the resumes in Symtech's proposal, including the resume of Symtech's proposed CAD manager, did not meet the RFP's requirements, a reasonable review of CDG's initial protest should have revealed that the protest was clearly meritorious. Additionally, CDG argues that the Coast Guard unduly delayed corrective action by submitting an agency report defending its evaluation before ultimately conceding that it "carefully reviewed the proposal submitted by Symtech Corporation and has determined that their proposal failed to meet the minimum requirements of the solicitation.' Discussions Letter, Feb. 2, 2009, at 1.

We agree. The Coast Guard took corrective action in this protest due to its recognition that some of the resumes supplied by Symtech did not meet the requirements of the solicitation, but contends that CDG's initial protest was not clearly meritorious because the initial allegations concerned only Symtech's proposed CAD manager, whose resume the Coast Guard continues to insist "clearly indicates he meets the minimum requirements." Agency Response to Request for Costs, at 3. Our review of the record, however, does not support that conclusion. Rather, we conclude that CDG's initial protest was clearly meritorious and that, had the agency conducted a reasonable review of the allegations in CDG's initial protest, it would have discovered that Symtech's proposed CAD managers resume did not provide a sufficient basis to conclude that he meets the RFP requirements. Specifically, the proposed CAD manager's resume did not include a certificate from an AutoCAD certified training center, and while the resume did set forth 16 years of general experience, nothing in that work history demonstrated ArchiCAD training or 6 years of full-time ArchiCAD working experience. In fact, the only reference to ArchiCAD in the entire resume was the listing "ArchiCAD 8.0" in a section of the resume stating "software applications include . . . ."

In sum, we conclude that a reasonable inquiry into CDG's initial protest would have revealed that it was clearly meritorious, as Symtech's proposed CAD manager's resume was insufficient to demonstrate the level of experience required by the solicitation. Thus, by failing to take corrective action before submitting an agency report to rebut the initial protest, the Coast Guard unduly delayed corrective action in the face of a clearly meritorious protest. Accordingly, we recommend that the Coast Guard reimburse CDG for the reasonable costs of filing and pursuing its protests of the award to Symtech. CDG should submit its claim for costs, detailing and certifying the time expended and costs incurred, directly to the Coast Guard within 60 days of receipt of this decision.  (Commercial Design Group, Inc.--Costs, B-400923.3, June 10, 2009) (pdf)


CTIC, a large business, protested the Naval Facilities Engineering Command's (NAVFAC) award of a contract to DCK Pacific, LLC, under request for proposals No. N62742‑08‑R‑1307, for design and construction of replacement, larger-size water lines and related work at the Naval Base, Guam. CTIC challenged the agency's evaluation of proposals and conduct of discussions. Subsequently, our Office conducted "outcome prediction" alternative dispute resolution (ADR), during which the cognizant GAO attorney stated that it was likely that CTIC's protest would be sustained based on several deficiencies in the conduct of the procurement. In this regard, the GAO attorney advised during the ADR that the agency's evaluation of past performance and experience/qualifications appeared unreasonable. NAVFAC thereupon advised our Office that it intended to undertake corrective action, resulting in GAO dismissing the protest as academic (B-400047, July 7, 2008).

Subsequently, in our decision Core Tech Int'l Corp.‑‑Costs, B‑400047.2, Mar. 11, 2009, 2009 CPD para. 59 at 8, we recommended reimbursement of CTIC's costs of filing and pursuing its protest. We based our recommendation on our finding that a reasonable agency inquiry into the protest allegations would have shown that NAVFAC had failed to reasonably evaluate the awardee's past performance and experience, and had conducted disparate, unequal discussions, but the agency unduly delayed taking corrective action.

Under the Competition in Contracting Act of 1984, as amended, where the Comptroller General recommends that a successful protester's costs, including reasonable attorneys' fees, be reimbursed, those fees are capped at $150 per hour, except where the protester is a small business concern. However, this hourly rate may be increased where "the agency determines, based on the recommendation of the Comptroller General on a case by case basis, that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee." 31 U.S.C. sect. 3554(c)(2)(B) (2006).

In Sodexho Mgmt., Inc.--Costs, B-289605.3, Aug. 6, 2003, 2003 CPD para. 136 at 37-43, we discussed the section 3554 ceiling on attorneys' fees and the cost of living adjustment. We found that the statute contemplates an increase in the specified $150 per hour rate in order to offset any decrease in the value of the rate due to increases in the cost of living, Sodexho Mgmt., Inc.--Costs, supra, at 41, and that it was proper to determine the appropriate cost-of-living increase with reference to the Department of Labor's (DOL) Consumer Price Index (CPI). Department of the Army; ITT Fed. Servs. Int'l Corp.--Costs, B-296783.4, B-296783.5, Apr. 26, 2006, 2006 CPD para. 72 at 2. Since Sodexho, we have found that the justification for an upward departure from the $150 cap is self-evident if the claimant asserts that the cost of living has increased, as measured by DOL's CPI. EBSCO Publishing, Inc.‑‑Costs, B‑298918.4, May 7, 2007, 2007 CPD para. 90 at 2-3; Department of State--Costs, B‑295352.5, Aug. 18, 2005, 2005 CPD para.145 at 2; Department of the Army; ITT Fed. Servs. Int'l Corp.--Costs, supra, at 2-3. Where the claimant asserts such a claim, and the contracting agency does not articulate any objection, we will grant a request for a recommendation in favor of a cost-of-living adjustment to the fee cap. Department of State--Costs, supra, at 2.

Here, CTIC and NAVFAC have agreed upon the elements and overall amount of CTIC's claim for the costs of pursuing the protest and claim, which are properly reimbursable. The only issue presented here is whether an enhanced attorney fee rate of $239.74 to $248.35 per hour (depending on the month of billing) should be applied to account for increases in the cost of living; if applied, the parties have agreed upon reimbursement in the amount of $28,863.77. NAVFAC E‑Mail to GAO, Apr. 16, 2009. In support of its claim for reimbursement at a higher rate, CTIC provides a detailed explanation of its calculation of the rates using DOL's CPI‑‑All Urban Consumers. Use of the "All Urban Consumers" CPI for a specific area is consistent with our decision in Sodexho, see Sodexho Mgmt., Inc.--Costs, supra, at 43 n.33, and we have reviewed CTIC’s calculations in support of the higher requested fees and find that they are properly supported and reasonable. Since NAVFAC does not object to CTIC's calculations, we recommend that NAVFAC reimburse CTIC its attorneys' fees at the claimed higher rate. See Department of State--Costs, supra, at 2.  (Core Tech International Corporation--Costs, B-400047.3, June 2, 2009)  (pdf)


Our Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2008), provide that where an agency takes corrective action in response to a protest, our Office may recommend that the agency pay the protester its costs of filing and pursuing the protest. Information Ventures, Inc.--Costs, B-294580.2 et al., Dec. 6, 2004, 2004 CPD para. 244 at 2. However, our Regulations do not contemplate a recommendation for the reimbursement of protest costs in every case where an agency takes corrective action, but rather only where an agency unduly delays taking corrective action in the face of a clearly meritorious protest. Id. Thus, as a prerequisite to our recommending the reimbursement of costs where a protest has been resolved by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious. Overlook Sys. Techs., Inc.--Costs, B-298099.3, Oct. 5, 2006, 2006 CPD para. 184 at 6. A protest is "clearly meritorious" where a reasonable agency inquiry into the protester's allegations would reveal facts showing the absence of a defensible legal position. Id.

AGFA first asserts that it should be reimbursed its costs based on the allegation in its initial protest that Philips' proposal was technically unacceptable due to its failure to "comply with multiple mandatory technical requirements set forth in the RFP" related to IHE standards. AGFA contends that this issue was clearly meritorious, and that the agency unduly delayed taking corrective action.

While we agree that Philips' proposal's alleged failure to address certain IHE standards was a serious issue, we do not agree that the issue was so clearly meritorious as to reveal the absence of any defensible legal position. The "mandatory [IHE] technical requirements" referenced in AGFA's initial protest were elements within the technical requirements section of the SOW. Of the four "IHE requirements" referenced, two were SOW provisions stating only that the proposed PACS "should" offer certain features; the remaining two provisions, while utilizing the word "shall," did not use the word directly in reference to IHE standards. Given the imprecise language used in the SOW provisions referenced by AGFA, we conclude that the issue raised by AGFA was not clearly meritorious and does not provide a basis for reimbursement of AGFA's protest costs.

AGFA next argues that it should be reimbursed for its costs based on the allegation in its first supplemental protest that Philips improperly offered zero prices for certain line items or that its price proposal was otherwise incomplete. These allegations were dismissed by our Office on November 12, for failure to state a sufficient factual basis. The allegations themselves demonstrated that AGFA had no knowledge of Philips' price proposal at the time the protest was filed, and were grounded entirely in speculation based on the prices of various elements of AGFA's own price proposal. As they were dismissed by our Office, these issues were not clearly meritorious and do not provide a basis for reimbursement.

Finally, AGFA argues that it should be reimbursed for its costs on the basis of its allegations that Philips' proposal did not commit to certain staffing requirements, failed to propose a fixed price, and was materially unbalanced. We disagree. These allegations were contained in AGFA's second supplemental protest, which was filed on December 15, after the agency report. According to our Office's scheduling order for the two supplemental protests filed by AGFA after receipt of the agency report, these issues were to be addressed by the agency by January 5. As the agency advised that it had decided to take corrective action on January 5, the agency did not unduly delay corrective action with respect to AGFA's second supplemental protest. As a general rule, so long as an agency takes corrective action by the due date of its protest report, as was the case here, we regard the action as prompt, and will not consider a request to recommend reimbursement of protest costs. See CDIC, Inc.-- Costs, B‑277526.2, Aug. 18, 1997, 97-2 CPD para. 52. Accordingly, these issues do not provide a basis for recommending reimbursement of AGFA's protest costs.  (AGFA HealthCare Corporation--Costs, B-400733.6, April 22, 2009) (pdf)


Where a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2008); AAR Aircraft Servs. Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 6. A protest is clearly meritorious where a reasonable agency inquiry into the protest allegations would have shown facts disclosing the absence of a defensible legal position. AVIATE L.L.C., B 275058.6, B-275058.7, Apr. 14, 1997, 97-1 CPD para. 162 at 16. With respect to the promptness of the agency's corrective action under the circumstances, we review the record to determine whether the agency took appropriate and timely steps to investigate and resolve the impropriety. See Chant Eng'g Co., Inc.‑‑Costs, B‑274871.2, Aug. 25, 1997, 97-2 CPD para. 58 at 4; Carl Zeiss, Inc.‑‑Costs, B-247207.2, Oct. 23, 1992, 92-2 CPD para. 274 at 4. While we consider corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, we generally do not consider it to be prompt where it is taken after that date. See CDIC, Inc.‑‑Costs, B-277526.2, Aug. 18, 1997, 97-2 CPD para. 52 at 2.

Here, according to NAVFAC, "the Agency does not argue that [CTIC] should be completely deprived of attorney fees." Agency Response, July 25, 2008, at 4. Rather, the agency asserts that the initial protest did not include the operative facts that resulted in the ADR, and, as a result, "was not persuasive and certainly not 'clearly meritorious.'" Id. at 3-4. The agency concludes that the award of attorneys' fees therefore should be "chiefly limited" to the period after submission of the agency report during which the protester was preparing its comments. Id.

We find NAVFAC's position unpersuasive. As an initial matter, we note that our willingness to inform the parties through outcome prediction ADR that a protest is likely to be sustained, as we did here as a result of the deficiencies in the technical evaluation and conduct of discussions, is generally an indication that the protest is viewed as clearly meritorious, and satisfies the "clearly meritorious" requirement for purposes of recommending reimbursement of protest costs. National Opinion Research Ctr.‑‑Costs, B-289044.3, Mar. 6, 2002, 2002 CPD para. 55 at 3. (As for the remaining protest issues raised by the protester, none was clearly meritorious.)

Furthermore, we find the agency's corrective action, occurring only after the agency report and the ADR, to have been unduly delayed. In this regard, CTIC's initial protest asserted that NAVFAC had improperly credited DCK Pacific, a recently formed entity, with the past performance and experience/qualifications of affiliated companies without consideration of whether there would be meaningful involvement of those companies in contract performance. Not only were the determinative facts regarding this issue apparent on the face of DCK Pacific's proposal, but, in addition, CTIC's concern in this regard was the same concern that NAVFAC itself raised during its discussions with DCK Pacific. In these circumstances, we think it to be beyond any reasonable dispute that a reasonable agency inquiry into CTIC's protest allegation would have shown facts disclosing the absence of a defensible legal position. See AVIATE L.L.C., supra, at 16.

We likewise find the agency's corrective action to be unduly delayed with respect to CTIC's challenge to the conduct of discussions regarding relevant contracts. In this regard, CTIC first asserted in its May 15 comments on the agency report that the agency had conducted unequal discussions, advising DCK Pacific, but not CTIC, of informational deficiencies regarding the nature of prior contracts cited in the proposals, with the result that several of CTIC's cited contracts were found to be not relevant. Although it was apparent from the procurement record that NAVFAC had conducted disparate discussions in this manner, the agency, in its May 23 response, nevertheless disputed the assertion that discussions regarding relevant contracts were unequal or otherwise improper. It was only after the ADR conducted by GAO more than a month later, that NAVFAC proposed corrective action. In these circumstances, since corrective action was proposed only after the agency report responding to the protest ground, we do not consider the corrective action to be prompt. See CDIC, Inc.‑‑Costs, supra, at 2.

NAVFAC further asserts that CTIC should not recover protest costs related to its assertion that CTIC was entitled to a 10-percent HUBZone price evaluation credit. As a general rule, we consider a successful protester entitled to be reimbursed costs incurred with respect to all issues pursued, not merely those upon which it prevails. Burns and Roe Servs. Corp.‑‑Costs, B-310828.2, Apr. 28, 2008, 2008 CPD para. 81 at 2‑3. Nevertheless, in appropriate cases, we have limited our recommendation for the award of protest costs where a part of those costs is allocable to an unsuccessful protest issue that is so clearly severable from the successful issues as to essentially constitute a separate protest. See, e.g., BAE Tech. Servs., Inc.‑‑Costs, B-296699.3, Aug. 11, 2006, 2006 CPD para. 122 at 3; Interface Floorings Sys., Inc.‑‑Claim for Attorneys' Fees, B-225439.5, July 29, 1987, 87-2 CPD para. 106 at 2-3. In determining whether protest issues are so clearly severable as to essentially constitute separate protests, we consider, among other things, the extent to which the issues are interrelated or intertwined‑‑i.e., the successful and unsuccessful arguments share a common core set of facts, are based on related legal theories, or are otherwise not readily severable. See Sodexho Mgmt., Inc.‑‑Costs, B‑289605.3, Aug. 6, 2003, 2003 CPD para. 136 at 29.

Here, CTIC's challenge to the agency's determination that CTIC was not entitled to a 10-percent HUBZone price evaluation credit did not involve the same set of core facts as did its clearly meritorious challenge to the technical evaluation and conduct of discussions. These protest grounds were also not based on related legal theories. Accordingly, we recommend that CTIC be reimbursed the reasonable costs of filing and pursuing its protest only as related to its challenge to the technical evaluation and conduct of discussions regarding relevant contracts. CTIC should submit its certified claim, detailing the time spent and costs incurred, directly to the agency within 60 days of its receipt of this decision. 4 C.F.R. sect. 21.8(f)(1).  (Core Tech International Corporation--Costs, B-400047.2,  March 11, 2009)  (pdf)


Following the agency's corrective action, Triple Canopy submitted these requests for our recommendation that the agency reimburse Triple Canopy's costs of filing and pursuing the supplemental protests. Triple Canopy asserts that the agency unduly delayed taking corrective action and that its supplemental protests were clearly meritorious. We disagree.

Under the Competition in Contracting Act of 1984 (CICA), our Office is authorized to recommend reimbursement of protest costs only where we find that an agency's actions violated a procurement statute or regulation. 31 U.S.C. sect. 3554(c)(1) (2000). Our Bid Protest Regulations further provide that where the contracting agency decides to take corrective action in response to a protest, we may recommend reimbursement of protest costs, including reasonable attorneys' fees. 4 C.F.R. sect. 21.8(e). Our Regulations do not contemplate a recommendation for reimbursement of protest costs in every case in which an agency takes corrective action, but rather only where an agency unduly delays taking corrective action in the face of a clearly meritorious protest. Information Ventures, Inc.--Costs, B‑294580.2 et al., Dec. 6, 2004, 2004 CPD para. 244 at 2. Thus, as a prerequisite to our recommending the reimbursement of costs where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious, that is, not a close question. PADCO, Inc.--Costs, B‑289096.3, May 3, 2002, 2002 CPD para. 135 at 3. A protest is clearly meritorious where a reasonable agency inquiry into the protester's allegations would reveal facts showing the absence of a defensible legal position. Yardney Technical Prods., Inc., B-297648.3, Mar. 28, 2006, 2006 CPD para. 65 at 4. The mere fact that an agency decides to take corrective action does not necessarily establish the absence of a defensible legal position, nor that a statute or regulation has clearly been violated. Id.

Here, based on the record presented, along with the discussions conducted and clarifications provided during the two GAO conferences, we cannot conclude that the supplemental protests were clearly meritorious. Among other things, we agree that the solicitation was ambiguous regarding the personnel requirements to which offerors were required to commit. Further, in responding to the supplemental protests, the agency maintained, with some basis, that, even accepting the protester's interpretation of the solicitations' requirements, Sabre's proposals reflected an intent to comply with those requirements and that, even increasing Sabre's prices to reflect such intent, Sabre's proposed prices were still lower than those proposed by Triple Canopy; thus, the agency argued that there was no prejudice to Triple Canopy.

In determining whether to recommend cost reimbursement, we need not definitively resolve whether the protests were meritorious; rather, we must determine whether they were clearly meritorious--that is, that they did not present close questions for which there was no defensible legal position. Based on the record here, we reject Triple Canopy's assertion that its protests were clearly meritorious; rather, we acknowledge that, even resolving doubts in Triple Canopy's favor, the issues presented were, indeed, close questions.

The request that we recommend reimbursement of costs is denied.  (Triple Canopy, Inc.--Costs, B-310566.9; B-400437.4, March 25, 2009) (pdf)


Where an agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2008); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 6. With respect to the promptness of the agency's corrective action under the circumstances, we review the record to determine whether the agency took appropriate and timely steps to investigate and resolve the impropriety. See Chant Eng'g Co., Inc.--Costs, B-274871.2, Aug. 25, 1997, 97-2 CPD para. 58 at 4; Carl Zeiss, Inc.--Costs, B-247207.2, Oct. 23, 1992, 92-2 CPD para. 274 at 4. We generally do not consider corrective action to be prompt if it is taken after the due date for the agency report responding to the protest. See CDIC, Inc.--Costs, B-277526.2, Aug. 18, 1997, 97-2 CPD para. 52 at 2.

Here, the agency argues that Pond should not be reimbursed its costs because its protest was not clearly meritorious. A clearly meritorious protest is one that clearly would have been successful--that is, it must involve a matter over which we have jurisdiction and be filed by an interested party in a timely manner and otherwise comply with the requirements of our Bid Protest Regulations, and the record must establish that the agency prejudicially violated a procurement statute or regulation. Georgia Power Co.; Savannah Elec. and Power Co.--Costs, B-289211.5, B-289211.6, May 2, 2002, 2002 CPD para. 81 at 9. The agency argues that Pond's protest was not clearly meritorious because Pond was not prejudiced by the ambiguity in the RFP, since, when subsequently given the opportunity to do so, Pond failed to provide the Article 134 licenses with its revised proposal. We disagree.

The question of prejudice in the context of a protest challenging the terms of a solicitation concerns whether the alleged defect affects the protester's ability to compete under the solicitation. See Global Solutions Network, Inc., B-298682, Nov. 27, 2006, 2006 CPD para. 179 at 3. Prejudice thus is measured in light of the circumstances while the protest is pending, not, as the agency argues, by post-protest developments. Here, at the time the initial protest was filed and while it was pending, the RFP's failure to clearly state the agency's requirements with regard to the Italian licensing requirements prejudiced Pond's ability to prepare an offer on a common basis with other potential offerors, in response to the agency's actual needs. The fact that Pond subsequently did not submit the required licenses, even after the RFP was amended to clarify the agency’s requirements, is not relevant to determining the question of prejudice in the context of the initial protest here.

The agency also argues that the protest was not clearly meritorious because the Article 134 licenses are required by Italian law in order for any company to receive award of the contract, and thus it was not necessary to set out the requirement in the RFP. Again, we disagree. Our view that the RFP was defective was not based on an interpretation of the requirements of Italian law in this area. On the contrary, the record before us indicated that there were multiple interpretations of those requirements as they relate to the specific issue in the protest--whether each member of a joint venture had to submit an Article 134 license. In our view, the RFP was defective because it did not clearly express the requirement (based on the agency's interpretation of Italian law) that all member companies in a joint venture submit Article 134 licenses as part of the joint venture's initial proposal, or risk rejection of the proposal. See RFP at 14.

In sum, we conclude that a reasonable inquiry by the agency into Pond's initial protest would have revealed that the RFP was unclear regarding the requirements for the Chamber of Commerce Certificate and Article 134 license and, thus, by failing to act before the due date for the agency report, the agency unduly delayed taking corrective action. Accordingly, we recommend that the agency reimburse Pond for the reasonable costs of filing and pursuing its initial protest of the terms of the RFP. Pond should submit its claim for costs, detailing and certifying the time expended and costs incurred, directly to the Army within 60 days of receipt of this decision.  (Pond Security Group Italia JV--Costs, B-400149.2, March 19, 2009) (pdf)


The protester argues that the agency report confirms ICCI's original protest allegation, namely, "that the Agency's evaluation of ICCI's past performance was irrational based on the Agency's failure to consider ICCI's strong record in performing government construction work of similar size and scope." Request for Costs at 3. Thus, the protester asserts, the agency unduly delayed taking corrective action when, in response to the protest, it produced an agency report instead of taking corrective action. We disagree.

Under the Competition in Contracting Act of 1984, our Office may recommend that protest costs be reimbursed where we find that an agency's action violated a procurement statute or regulation. 31 U.S.C. sect. 3554(c)(1) (2000). Where an agency takes corrective action in response to a protest, we may recommend that the protester recover the reasonable costs of filing and pursuing the protest, where we conclude that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest. See 4 C.F.R. sect. 21.8(e) (2008); Georgia Power Co.; Savannah Elec. and Power Co.--Costs, B-289211.5, B-289211.6, May 2, 2002, 2002 CPD para. 81 at 5. A protest is clearly meritorious where a reasonable agency inquiry into the protest allegations would have shown facts disclosing the absence of a defensible legal position. AVIATE LLC, B-275058.6, B-275058.7, Apr. 14, 1997, 97-1 CPD para. 162 at 16. As a general rule, so long as an agency takes corrective action by the due date of its protest report, we regard the action as prompt, and will not consider a request to recommend reimbursement of protest costs. CDIC, Inc.--Costs, B--277526.2, Aug. 18, 1997, 97-2 CPD para. 52. If it is in the protester's comments on the agency report that the agency is presented for the first time with information that clearly calls into questions the agency's challenged determination, and the agency then promptly takes corrective measures, we will conclude that the agency did not unduly delay in taking corrective action. LSL Indus., Inc.--Costs, B-291777.2, Aug. 18, 2003, 2004 CPD para. 99 at 4.

Here, we cannot say that the protester's general allegation that the agency failed to consider the protester's "strong record" in performing government construction work was clearly meritorious. ICCI has not shown that its initial protest on this ground was clearly meritorious in the sense that it presented a prima facie case that, without more, demonstrated a valid basis for our Office to sustain its protest. Career Quest, a Div. of Syllan Careers, Inc.--Costs, B-293435.5, Apr. 13, 2005, 2005 CPD para. 79 at 3. Rather, in order for us to reach a decision about ICCI's initial protest allegations, we had to further develop the record, including a complete agency report and the protester's comments on the report. Because ICCI's initial protest did not present what could reasonably be described as clearly meritorious issues, it follows that there is no basis for recommending reimbursement of ICCI's protest costs. Id.

Moreover, the agency did not unduly delay taking corrective action in response to the protester's comments on the agency report. The promptness of the agency's corrective action is not measured from the protester's initial protest where the initial protest did not identify the specific areas where the agency improperly evaluated the protester's proposal. See Henkels & McCoy, Inc., B-250875 et al., Feb. 24, 1993, 93-1 CPD para. 174 at 4. As quoted above, the initial protest broadly challenged the reasonableness of the agency's evaluation of the protester's past performance without specifically identifying the agency's failure to consider certain past performance questionnaires and certain relevancy determinations. It was not until it reviewed the agency report that ICCI protested, with specificity, the propriety of its past performance evaluation. We recognize that ICCI was not able to raise these specific issues before it received the agency report and reviewed the agency's evaluation. The fact remains, however, that once ICCI further articulated its challenge, the agency promptly determined that the evaluation was flawed and took corrective action. As noted above, the protester submitted its comments on the agency report on November 20, and on December 8, 18 days later, the agency took corrective action. See J.A. Jones Mgmt. Servs., Inc.--Costs, B-284909.4, July 31, 2000, 2000 CPD para. 123 at 3-4 (noting that, when the agency responded within 17 days to the new information offered by the protester, it had not unduly delayed in taking corrective action).  (Intercontinental Construction Contracting, Inc.--Costs, B-400729.3, March 4, 2009) (pdf)


Under the Competition in Contracting Act of 1984, our Office may recommend that protest costs be reimbursed where we find that the agency's action violated a procurement statute or regulation. 31 U.S.C. sect. 3554(c)(1) (2000). Our Bid Protest Regulations provide that where the contracting agency decides to take corrective action in response to a protest, we may recommend that the protester be reimbursed the costs of filing and pursuing its protest, including reasonable attorneys' fees. 4 C.F.R. sect. 21.8(e) (2008). This does not mean that we will recommend that costs be reimbursed in every case in which an agency takes action that renders a protest academic; rather, we will recommend that a protester be reimbursed its costs only where the record establishes that (1) the agency action that rendered the protest academic was taken in response to the protest, see Takota Corp.--Costs, B-299600.2, Sept. 18, 2007, 2007 CPD para. 171 at 3, and (2) the agency unduly delayed taking the action in the face of a clearly meritorious protest. Baine Clark--Costs, B-290675.3, Sept. 23, 2002, 2002 CPD para. 166 at 2. We consider a protest to be clearly meritorious when a reasonable agency inquiry into the protester's allegations would show that the agency lacked a defensible legal position. SDA, Inc.--Costs, B‑298216.2, Sept. 11, 2006, 2006 CPD para. 133 at 2.

Here, it is not clear from the record that the agency decided to cancel the RFP in response to RANA’s protest. While we recognize that the contracting officer represented in the agency’s request for dismissal of the underlying protest that the solicitation was being cancelled “due to” RANA’s protest, Agency Letter to GAO, Oct. 15, 2008, at 2, which suggests that there was a link between the protest and the decision to cancel, the agency explained in its response to the protester’s request for costs that it did not decide to cancel in response to RANA’s protest; rather, the agency maintained that it decided to take this action “only after learning that the awardee, as well as offerors next in line for award, were unwilling or unable to commit to the prices originally offered in their proposals.” Agency Response to Protester’s Request for Recommendation for Reimbursement, Nov. 17, 2008, at 2.

Whether the agency decision to cancel was a response to RANA’s protest is not critical to the outcome of our decision here, however, because in any event we are not persuaded that RANA’s protest was clearly meritorious. RANA argues that by submitting its prices on the price schedule furnished in the RFP and acknowledging amendment No. 0001, it committed itself to deliver the items identified in the amendment for the prices that it entered on the schedule, and that its protest objecting to the rejection of its proposal as technically unacceptable was thus clearly meritorious. We disagree. In our view, it was unclear from RANA’s proposal whether it was offering to furnish the items described in the price schedule (i.e., the model 3600dn printer and cartridges) or the items described in the amendment (i.e., the model cp3505dn printer and cartridges). Faced with an ambiguity as to what the protester was proposing to furnish (and thus an ambiguity as to whether it was proposing to furnish items meeting the requirements of the solicitation, as amended), we think that the agency’s rejection of RANA’s proposal was reasonable. See All Bldg. Servs., Inc., B‑293519, Mar. 23, 2004, 2004 CPD para. 73 at 2-3.

The request for a recommendation that the agency reimburse RANA’s protest costs is denied.  (RANA Technologies--Costs, B-400471.2, February 3, 2009)  (pdf)


Under the Competition in Contracting Act of 1984, our Office may recommend that protest costs be reimbursed where we find that an agency's action violated a procurement statute or regulation. 31 U.S.C. sect. 3554(c)(1) (2000). Where an agency takes corrective action in response to a protest, we may recommend that the protester recover the reasonable costs of filing and pursuing the protest, where we conclude that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest. See 4 C.F.R. sect. 21.8(e) (2008); Georgia Power Co.; Savannah Elec. and Power Co.-Costs, B--289211.5, B--289211.6, May 2, 2002, 2002 CPD sect. 81 at 5. We have recognized that the mere promise of corrective action, without reasonably prompt implementation, has the obvious effect of circumventing the goal of the bid protest system for the economic and expeditious resolution of bid protests. See Louisiana Clearwater, Inc.-Recon. and Costs, B‑283081.4, B-283081.5, Apr. 14, 2000, 2000 CPD para. 209 at 6; Pemco Aeroplex, Inc.‑‑Recon. and Costs, B‑275587.5, B-275587.6, Oct. 14, 1997, 97-2 CPD para. 102 at 7-8. Thus, where an agency fails to implement the promised corrective action, or implements corrective action that fails to address a meritorious issue raised in the protest that prompted the corrective action, such that the protester is put to the expense of subsequently protesting the very same procurement deficiency, the agency's action has precluded the timely, economical resolution of the protest. Louisiana Clearwater, Inc.-Recon. and Costs, supra.

Here, however, we find that the agency promptly instituted its promised corrective action, and thus this is not a situation where the agency either failed to implement the corrective action, or unduly delayed the corrective action, such that the protester was required to file a second protest. In this regard, the Army, as promised, reviewed its determinations regarding the SDVOSB set-aside, bundling, and the conflict of interest, and subsequently documented this review. While the protester disagrees with the Army's conclusions, this does not demonstrate that the Army failed to implement its promised corrective action. Moreover, we find no basis in the record here to conclude that Taylor's protest grounds were clearly meritorious. A prerequisite to our recommendation that costs be reimbursed is that the protest must not only have been meritorious but must also have been clearly meritorious, i.e., not a close question. See New England Radiation Therapy Mgmt. Servs., Inc.--Costs, B‑297397.3, Feb. 2, 2006, 2006 CPD para. 30 at 4 (reimbursement of protests costs not recommended after agency's corrective action where protest was not clearly meritorious). Here, further record develop would be required to determine whether the requirements had changed such that a set aside was not required (as maintained by the CO), whether the agency had reasonably decided to have "one point of contact" such that there was no improper bundling, and whether the agency had properly addressed the allegation of bias. In short, because we find that the agency did not unduly delay implementing its promised corrective action and that Taylor's prior protest grounds were not clearly meritorious, we conclude that there is no basis for recommending reimbursement of Taylor's protest costs.  (Taylor Consultants, Inc.--Costs, B-400324.3, February 2, 2009) (pdf)


Our Office may recommend that a protester be reimbursed the costs of filing and pursuing a protest where the contracting agency takes action which renders a protest academic prior to our issuing a protest resolving the merits of the protest. Bid Protest Regulations, 4 C.F.R. sect. 21.8(e); Information Ventures, Inc.--Costs, B-294567.2, Nov. 16, 2004, 2004 CPD para. 234 at 2. Such a recommendation is generally based upon a concern that an agency has taken longer than necessary to initiate corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Advanced Envtl. Solutions, Inc.--Costs, B-296136.2, June 20, 2005, 2005 CPD para. 121 at 2-3. As a general rule, when an agency takes corrective action on or before the due date for its report in response to the protest, we consider the agency’s actions to have been taken promptly; a protester does not have to file comments or pursue the protest further when the corrective action is taken prior to the submission of a report on the merits of the protest. See Alaska Structures, Inc.--Costs, B-298156.2, July 17, 2006, 2006 CPD para. 109 at 4.

In our view, a basis for the award of costs does not exist in this protest, since the Army initiated corrective action on June 18, 10 days prior to the June 28 report due date which, as mentioned above, is the point at which we will generally determine that an agency has not acted promptly. Since the agency’s corrective action has not been shown to have been unduly delayed, and since we do not recommend the award of protest costs under the Equal Access to Justice Act, there is no basis to recommend reimbursement of protest costs.  (Coronet Machinery Corporation--Costs, B-400197.2, November 18, 2008)  (pdf)


Exec requests that we recommend that the agency reimburse its costs of pursuing its protest concerning the demolition requirement. GSA argues that reimbursement is not warranted here because the original solicitation required all offerors to demolish existing tenant improvements, and that, notwithstanding the agency's amendment of the SFO to make the matter more clear, the protester's argument was without merit. We agree with GSA.

Our Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2008), provide that we may recommend that an agency reimburse a protester’s costs of pursing a protest where the agency decides to take corrective action in response to the protest. We will make such a recommendation, however, only where the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing a protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Information Ventures, Inc.-Costs, B-294567.2, Nov. 16, 2004, 2004 CPD para. 234 at 2. A protest is clearly meritorious where a reasonable agency inquiry into the protest allegations would have shown facts disclosing the absence of a defensible legal position. AVIATE LLC, B-275058.6, B-275058.7, Apr. 14, 1997, 97-1 CPD para. 162 at 16. As a general rule, so long as an agency takes corrective action by the due date of its protest report, we regard the action as prompt, and will not consider a request to recommend reimbursement of protest costs. CDIC, Inc.-Entitlement to Costs, B-277526.2, Aug. 18, 1997, 97--2 CPD para. 52.

Here, we think the record shows that Exec's initial argument was not clearly meritorious. As discussed above, Exec's initial protest argued that the SFO required only the incumbent lessors to demolish existing tenant improvements. The SFO set forth specific provisions that applied only to incumbent lessors, including the following requirement for demolition of existing improvements:

The majority of this requirement is currently located at 6116, 6120 and 6130 Executive Boulevard, Rockville, MD (the "Executive Boulevard Properties"). Modernization of the Executive Boulevard Properties may be a potential solution for this procurement. A modernization of the Executive Boulevard Properties will be required to meet all of the requirements of this SFO, including the Occupancy Date requirements of Section 1.7. The SFO outlines a level of base building requirements and tenant improvements that will require all or portions of the building to be vacant from time to time during modernization. In addition, existing tenant improvements in Executive Boulevard Properties must be demolished and replaced with new tenant improvements in accordance with the Government's Program of Requirements and approved plans.
SFO sect. 1.20A.

While the original SFO did not specifically state that non-incumbent offerors were required to demolish existing tenant improvements, it stated that all offerors were required to propose their office space as a "building shell." SFO sect. 1.9. The building shell requirements applicable to all offerors stated that the proposed office space must have complete base structures, accessible common areas, and systems such as heating, ventilation, air conditioning, electrical, and sprinklers. Id. The SFO required offerors to propose a base price for the building shell, and provided separately for a fixed allowance for the construction of new tenant improvements to meet the government’s requirements. GSA states that this approach allows the government to evaluate offerors on a common basis, without having to take existing tenant improvements into consideration. AR at 9.

Amendment No. 2 added a new section to sect. 1.9, which applied to all offerors, as follows:

Demolition. All required demolition is at the Lessor's expense and offers should be priced accordingly. Notwithstanding sect. 1.11(A)(4), any offeror proposing an existing building with existing tenant improvements must assume that all existing improvements must be demolished in order to provide for the Government's new POR.

SFO amend. 2 sect. 1.9(A).

To conclude that the protester's original argument was clearly meritorious, we would need to agree with the protester that the solicitation, as originally issued by GSA and challenged by Exec, was defective. We do not agree.

As discussed above, all offerors were required to propose office space as a building shell, i.e., empty space with only basic elements such as utilities and safety systems. GSA concedes that the SFO did not specifically state that non-incumbents would need to assume demolition of existing tenant improvements. However, GSA argues that the solicitation clearly and necessarily implied that the SFO required demolition of existing tenant improvements, to the extent that all existing improvements must be removed so that the office space is reduced to the status of the required building shell. AR at 9.

We agree with the agency that proposing office space as a building shell means that an offeror must assume demolition of all existing improvements. Additionally, although the initial SFO more explicitly stated this requirement for incumbent offerors, we do not think the elsewhere-stated, but essentially duplicative provisions requiring a building shell, excused non-incumbents from demolishing existing tenant improvements.

Finally, we do not think that GSA's decision to amend the solicitation demonstrates that the protester's initial argument was correct, even though we agree that amendment No. 2 more clearly stated the requirement. As discussed above, we think that the initial solicitation advised all offerors that existing tenant improvements required demolition. Therefore, we conclude that agency's corrective action was not taken in response to a clearly meritorious protest, and we do not recommend that Exec be reimbursed its protest costs.  (Exec Plaza, LLC--Costs, B-400107.3, October 24, 2008) (pdf)


Al Qabandi asserts that reimbursement of its protest costs is warranted here because all of the issues raised in its initial protest, other than its claim that the start date in its contract was inconsistent with the solicitation, were clearly meritorious.

The Army concedes that its report incorrectly stated that there was no requirement for a price realism analysis. Army Comments, Jan. 7, 2008, at 4. The agency agrees with the protester that, under the terms of the solicitation, it was required to conduct a price realism analysis but failed to do so. Army Comments, Jan. 7, 2008, at 4-5. In these circumstances, Al Qabandi' s assertion that the agency had failed to conduct a required price realism analysis was clearly meritorious. The Army contends, however, that its corrective action was taken promptly, making reimbursement of the costs associated with this issue inappropriate. In this regard, the agency asserts that it was only after the November 8 agency report had been filed that Al Qabandi first raised the issue of the Army' s failure to conduct a price realism analysis.

The Army' s position is incorrect. In its initial, October 9 protest, Al Qabandi asserted that the “award price is not realistic” since it “apparently does not factor in the increased cost of beginning performance in a few days.” Al Qabandi Protest, Oct. 9, 2008, at 6. The agency maintains that this language does not represent an assertion that the agency failed to conduct a price realism analysis, but instead “essentially allege[s] that the Army conducted a flawed, or unrealistic, analysis because the awardee’s pricing proposal did not reflect contract performance beginning on October 1, 2007.” Agency Comments, Jan. 7, 2008, at 8. In our view, however, the allegation was sufficiently specific that a reasonable investigation into the assertion would have led the agency to conclude that, contrary to the agency’s initial position, the solicitation in fact required a price realism analysis, and that it improperly failed to perform such an analysis. Accordingly, we find that the Army unduly delayed taking corrective action in the face of this clearly meritorious protest assertion. (Al Qabandi United Company; American General Trading & Contracting‑‑Costs, B-310600.3; B-310600.4, June 5, 2008.) (pdf)


Where a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2007); AAR Aircraft Servs.‑‑Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 6. A protest is clearly meritorious where a reasonable agency inquiry into the protest allegations would have shown facts disclosing the absence of a defensible legal position. AVIATE L.L.C., B‑275058.6, B-275058.7, Apr. 14, 1997, 97-1 CPD para. 162 at 16. With respect to the promptness of the agency’s corrective action under the circumstances, we review the record to determine whether the agency took appropriate and timely steps to investigate and resolve the impropriety. See Chant Eng’g Co., Inc.-‑Costs, B‑274871.2, Aug. 25, 1997, 97-2 CPDpara. 58 at 4; Carl Zeiss, Inc.-‑Costs, B-247207.2, Oct. 23, 1992, 92-2 CPD para. 274 at 4. While we consider corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, we generally do not consider it to be prompt where it is taken after that date. See CDIC, Inc.-‑Costs, B-277526.2, Aug. 18, 1997, 97-2 CPD para. 52 at 2.

Sysorex asserts that reimbursement of its protest costs is warranted here because, in its view, three issues raised in its initial protest‑‑‑unequal evaluation of handheld solutions, misevaluation of cost proposals, and misevaluation of Sysorex’s proposed network monitoring capabilities‑‑‑were clearly meritorious, but the agency nevertheless failed to take corrective action until after the protester had responded to the agency report.

Interior denies that it unduly delayed taking corrective action in the face of clearly meritorious protest grounds. According to Interior, it determined to take corrective action based on problems in two areas identified by Sysorex. Specifically, Interior states that Sysorex’s assertion in its October 22 supplemental protest that Perceptics’ handheld solution did not fully comply with the solicitation requirements “caused the agency to question both its earlier evaluation of all offerors’ handheld solutions as well as the feasibility of the performance requirements . . . for the handheld LPRs.” Interior Comments, Dec. 3, 2007, at 2. In addition, Interior states that Sysorex, in asserting in its October 22 supplemental protest that Perceptics’ commercial truck lane did not offer the required 95 percent accuracy read rate, “has identified an area where the agency may have improperly relaxed a solicitation requirement.” Id. at 3. Interior concludes that, since it first learned the basis for corrective action after it filed its agency report responsive to the initial protest submissions, and it acted promptly thereafter to take corrective action, there is no basis for recommending reimbursement of protest costs.

We agree with Sysorex that its initial challenge to the evaluation of handheld solutions was clearly meritorious. The agency’s evaluation of proposals was based in significant measure upon the determination that, while Sysorex’s [REDACTED] handheld solution “was not well suited to the environment in which CBP operates” and “compromises officer safety,” Source Selection Decision at 8, “Perceptics proposed a true handheld solution, consisting of [REDACTED] that accomplishes all of the functions of Sysorex’s [REDACTED] ‘handheld’ system.” Agency Report, Oct. 15, 2007, at 8. However, the solicitation clearly and unambiguously required that the handheld solution be based upon a handheld wireless device that is “capable of acting as a fully functioning LPR system.” SOW sect. C.3.1.5.2. Since Perceptics’ proposal described its handheld approach as requiring that [REDACTED], Perceptics FPR at IX-2, it should have been clear to the agency that the approach was not likely to meet the SOW requirement that all types of LPR systems, including the handheld system, be capable of imaging license plates on vehicles moving at speeds up to 60 miles per hour with 95 percent accuracy.

Interior asserts that it understood that its evaluation “might have been flawed” only when Sysorex, in its supplemental protest filed after receipt of a copy of Perceptics’ proposal in the agency report, pointed out that Perceptics had proposed the [REDACTED], and asserted that this [REDACTED] could not meet the requirements of the SOW without additional equipment. Interior Comments, Dec. 3, 2007, at 2. Again, however, it was clear that a handheld solution that [REDACTED] was not likely to meet the SOW requirement that the handheld system, like all other LPR systems to be furnished under the contract, be capable of imaging license plates on vehicles moving at speeds up to 60 miles per hour with 95 percent accuracy. In our view, a reasonable investigation of Sysorex’s claim in its initial protest filings that all offerors would be required to propose a suite of equipment similar to Sysorex’s in order to meet the SOW requirements, should have led the agency to examine the compliance of Perceptics’ proposed handheld solution; such examination, reasonably conducted, necessarily would have indicated the noncompliance of Perceptics’ proposed handheld solution. Accordingly, we find that Interior unduly delayed taking corrective action in the face of Sysorex’s clearly meritorious protest, first raised in its initial protest filings prior to the agency report, against the evaluation of proposed handheld solutions.  (Sysorex Federal, Inc.--Costs, B-310273.2, March 27, 2008) (pdf)


Where a contracting agency takes action which renders a protest academic prior to our issuing a decision resolving the merits of the protest, our Office may recommend that the protester be reimbursed the costs of filing and pursuing the protest. Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2007); Information Ventures, Inc.--Costs, B-294567.2, Nov. 16, 2004, 2004 CPD para. 234 at 2. We will recommend that a protester be reimbursed its protest costs only where, under the facts and circumstances of a given case, the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing a protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Advanced Envtl. Solutions, Inc.--Costs, B-296136.2, June 20, 2005, 2005 CPD para. 121 at 2-3. Generally, where an agency takes corrective action on or before the due date for its report in response to the protest, we consider the agency’s corrective measures to have been taken promptly; a protester does not have to file comments or pursue the protest further when the corrective action is taken prior to the submission of a report on the merits of the protest. See Alaska Structures, Inc.--Costs, B‑298156.2, July 17, 2006, 2006 CPD para. 109 at 4; The Sandi-Sterling Consortium--Costs, B‑296246.2, Sept. 20, 2005, 2005 CPD para. 173 at 2-3.

In our view, the protester’s request for reimbursement of protest costs is based on an argument that neither establishes the meritorious nature of its protest issues (which, in any event, are unrelated to the basis upon which the agency took corrective action) nor demonstrates that the agency unduly delayed taking corrective action. The protester instead essentially suggests that, since the agency had told it, during its agency-level protest, that a bond had been submitted by Alliance, but apparently had not noticed the untimely nature of the bond, the agency’s subsequent rejection of the Alliance quotation based on the untimely bond after Tremco filed a protest with our Office constitutes unduly delayed corrective action. Tremco generally contends that if the impropriety regarding the bond had been discovered during the agency-level protest (even though Tremco did not raise any issue regarding the bond), and if the Alliance quotation had been rejected earlier because of the impropriety, Tremco would not have had to file its protest to our Office, and, as a result, it should be reimbursed for the costs of doing so. We see no basis to recommend recovery of protest costs here, since Tremco’s theory lacks the essential elements necessary to support a recommendation for reimbursement of protest costs. As an initial matter, there is no nexus between Tremco’s protest contentions and the basis for corrective action; Tremco never raised the timeliness of the awardee’s bond in its protest to our Office. Thus, Tremco has no basis for reimbursement on that issue. See Takota Corp.--Costs, B‑299600.2, Sept. 18, 2007, 2007 CPD para. 171 at 3. In any event, with regard to Tremco’s specific protest allegations, since there was no report submitted by the agency, there is nothing in the record that supports Tremco’s general allegation that its protest was meritorious. See Alaska Structures, Inc.--Costs, B‑298575.4, Jan. 22, 2007, 2007 CPD para. 15 at 8 n.8. With regard to Tremco’s protest, it is clear that the agency’s corrective action was not unduly delayed, since it was communicated to us by the due date for receipt of the agency report in response to the protest. See The Sandi-Sterling Consortium--Costs, supra. The record shows that it was only after further review of the procurement in preparation of its agency report to our Office in response to Tremco’s protest that the agency discovered the issue that led to the prompt corrective action. Since the agency’s corrective action has not been shown to have been taken in response to clearly meritorious issues raised by the protester, and, moreover, was not unduly delayed, there is no basis to recommend reimbursement of protest costs. (Tremco Incorporated--Costs, B-310927.2, April 21, 2008) (pdf)


Our Bid Protest Regulations, 4 C.F.R. sect. 21.8(e), provide that where an agency takes corrective action in response to a protest, we may recommend that the agency reimburse protest costs, including attorneys’ fees; however, we will make such a recommendation only where the agency unduly delayed taking corrective action in the face of a clearly meritorious protest. CSL Birmingham Assocs.; IRS Partners-Birmingham--Entitlement to Costs, B-251931.4, B-251931.5, Aug. 29, 1994, 94-2 CPDpara. 82 at 3. As a general rule, when an agency takes corrective action by the due date of its protest report, we regard such action as prompt, and decline a request for recommendation of reimbursement of protest costs. Alaska Structures, Inc.--Costs, B-298156.2, July 17, 2006, 2006 CPD para. 109 at 4. Here, Singleton argues that the need for corrective action under this IFB should have been apparent as early as November 30, 2007, when the SBA submitted a statement supporting Singleton’s earlier protest. However, our decision sustaining Singleton’s earlier protest (which, as noted, raised a similar issue, but involved a different solicitation), was only issued later--on January 10, 2008. Thus, on the day this protest was filed--also on January 10--there should have been no doubt on the part of the agency that Singleton’s second protest raising the same issues present in the earlier VA procurement, presented a question our Office would view as clearly meritorious. Since we conclude the protest was clearly meritorious, the only question remaining is whether the agency’s corrective action (in the face of this clearly meritorious protest) was unduly delayed. In this regard, we note that the agency did not submit a report, and 2 days after the date that report was due, advised our Office of its intent to take corrective action. Since no report was tendered, the protester was not required to expend unnecessarily the costs of preparing comments in answer to that report. Cf. Control Corp.; Control Data Sys., Inc.--Protest & Entitlement to Costs, B‑251224.2 et al., May 3, 1993, 93-1 CPD para. 353 at 7 (where delay in corrective action required protester to expend unnecessary effort in preparing comments on agency report, recommendation of reimbursement of protest costs was appropriate). Thus Singleton was in no worse a position than it would have been if the agency had taken corrective action by the report due date--which, as mentioned above, is the point at which we will generally determine that an agency has not acted promptly. Accordingly, we will not conclude that the VA failed to take prompt corrective action in the face of a clearly meritorious protest.  (Singleton Enterprises-GMT Mechanical, Joint Venture--Costs, B-310454.3, March 27, 2008) (pdf)


Where a procuring agency takes corrective action in response to a protest, our Office may recommend that the agency reimburse the protester its protest costs, where based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing a protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. 4 C.F.R. sect. 21.8(e) (2007); AAR Aircraft Servs.--Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 6. A protest is clearly meritorious when a reasonable agency inquiry into the protest allegations would show facts disclosing the absence of a defensible legal position. AVIATE L.L.C., B‑275058.6, B-275058.7, Apr. 14, 1997, 97-1 CPD para. 162 at 16.  In a one-page response to Eagle’s request for reimbursement, the VA generally disputes that Eagle’s protest was clearly meritorious or that its corrective action was unduly delayed. In this regard, the VA contends that “the brevity of time allotted to the two contracting officers to take care of their family and personal needs before departing for a hearing in this protest in Washington, D.C. made it impossible for either of them to appear” and that the “loss of the opportunity for a hearing harmed the VA’s ability to prove it had done its research properly.” VA’s Response to Eagle’s Request for Reimbursement.  We find that Eagle’s protest was clearly meritorious and that the VA unduly delayed taking corrective action in the face of that protest. With respect to the merits of Eagle’s protest, the contracting officer’s judgment that there were not two or more small business manufacturers that could satisfy the RFP’s requirements was unsupported by the contemporaneous record, and despite repeated requests from our Office, the VA did not substantively respond to the evidence provided by the protester and the SBA that, on its face, showed that the VA’s market research was inadequate. The record also does not support the VA’s contention now that its inability to produce the contracting officers for a hearing in Washington, D.C. “harmed” its ability to defend itself in this protest. In fact, although the contracting officers were originally requested to attend a hearing in GAO’s hearing room in Washington, D.C., prior to the October 10 hearing date we informed the parties that the contracting officers’ testimony would be taken by telephone and transcribed by a court reporter.[4] See GAO’s Amended Confirmation of Hearing, Oct. 5, 2007, at 1.  With respect to the promptness of the agency’s corrective action under the circumstances, we review the record to determine whether the agency took appropriate and timely steps to investigate and resolve the impropriety. See Chant Eng’g Co., Inc.--Costs, B-274871.2, Aug. 25, 1997, 97-2 CPD para. 58 at 4; Carl Zeiss, Inc.--Costs, B-247207.2, Oct. 23, 1992, 92-2 CPD para. 274 at 4. While we consider corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, we generally do not consider it to be prompt where it is taken after that date. See CDIC, Inc.--Costs, B-277526.2, Aug. 18, 1997, 97‑2 CPD para. 52 at 2. Here, the VA’s proposed corrective action came not only after the agency filed its report on the protest but after our repeated requests for information and that the VA address the protester’s comments and the SBA’s views that indicated that the contracting officer erred in concluding that there were no small business manufacturers that could satisfy the RFP’s requirements. Under the circumstances, we conclude that the VA’s corrective action was unduly delayed.  We recommend that Eagle be reimbursed the reasonable costs of filing and pursuing its protest. Eagle should submit its claim for costs, detailing and certifying the time expended and costs incurred, directly to the VA within 60 days of receipt of this decision. 4 C.F.R. sect. 21.8(f)(1).  (Eagle Home Medical Corporation--Costs, B-299821.3, February 4, 2008) (pdf)


In its earlier protests, B-310398 and B-310398.2, WCC argued that the DEA conducted an improper sole-source procurement, and wrongly denied WCC an opportunity to compete for the solicitation requirements by refusing to test its satellite trackers for compatibility with the DEA’s tracking system. The agency produced a report responding to the protest allegations, and requested that our Office either deny the protests or dismiss them based on the agency’s argument that WCC was not an interested party. Our Office convened a conference call during which the GAO attorney assigned to the protest identified concerns regarding the agency’s rationale for the sole-source award, and indicated that the record as produced by the agency did not support the reasonableness of the sole-source award. The GAO attorney also requested additional information from the DEA to supplement its report. Subsequently, however, the DEA advised our Office that it would take corrective action by terminating the award to NAL and canceling the solicitation. Because the agency’s corrective action rendered the protest academic, we dismissed the protests on November 30, 2007. Where an agency takes corrective action in response to a protest, our Office may recommend that a protester be reimbursed the costs of filing and pursuing that protest. Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2007). Such recommendations are generally based upon a concern that the agency has taken longer than necessary to initiate corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. See, e.g., AAR Aircraft Servs.-Costs, B-291670.6, May 12, 2003, 2003 CPD para. 100 at 5. A protest is clearly meritorious when a reasonable agency inquiry into the protest allegations would show facts disclosing the absence of a defensible legal position. The Real Estate Ctr.-Costs, B-274081.7, Mar. 30, 1998, 98-1 CPD para. 105 at 3. Here, the DEA states that it “does not contest [WCC’s] request for reimbursement.” Letter from DEA to GAO, Dec. 18, 2007, at 1. In the absence of any evidence to show that the DEA’s sole-source award determination was reasonable, and in view of the agency’s decision not to contest the request for reimbursement, we conclude that the protest was clearly meritorious. We also conclude that the DEA did not take prompt corrective action, as it did not terminate the award to NAL and cancel the solicitation until after the agency had produced its report on the protest, the protester had filed its comments on the report, and the GAO attorney assigned to the protest had requested additional information to supplement the record. We recommend that the agency reimburse WCC its costs of filing and pursuing its protests. (World Communications Center, Inc.--Costs, B-310398.4, January 16, 2008) (pdf)


Where an agency takes corrective action in response to a protest, our Office may recommend that a protester be reimbursed the costs of filing and pursuing that protest.  4 C.F.R. sect. 21.8(e) (2007). However, where, as here, the record reasonably supports the agency’s cancellation of a protested procurement on the basis that the solicitation at issue no longer represents the procuring agency’s actual requirements, we do not view cancellation as corrective action taken to remedy a meritorious protest. See PAI Corp., B-244287.5, et al., Nov. 29, 1991, 91-2 CPD para. 508 at 4-5. Accordingly, we will not recommend reimbursement of protest costs. Id. (RKR Joint Venture, LLC--Costs, B-299856.2, December 7, 2007)  (pdf)


Where a contracting agency takes action which renders a protest moot prior to our issuing a decision resolving the merits of the protest, our Office may recommend that the protester be reimbursed the costs of filing and pursuing the protest. Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2007); Information Ventures, Inc.--Costs, B-294567.2, Nov. 16, 2004, 2004 CPD para. 234 at 2. This imposition of costs is not intended as an award to prevailing protesters or as a penalty to the agency, but rather is designed to encourage agencies to take prompt action to correct apparent defects in competitive procurements. J.A. Jones Mgmt. Servs., Inc.--Costs, B-284909.4, July 31, 2000, 2000 CPD para. 123 at 3. We will recommend that a protester be reimbursed its protest costs only where, under the facts and circumstances of a given case, the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing a protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Advanced Environmental Solutions, Inc.--Costs, B-296136.2, June 20, 2005, 2005 CPD para. 121 at 2-3. Applying these standards to the present case, we conclude that it is not appropriate to recommend that Takota recover its protest costs. As an initial matter, there was no nexus between the bases of protest raised by Takota in its protest letter and the basis for the Coast Guard’s corrective action decision, which was taken in response to the SBA’s opinion, and we note that the protester has not shown otherwise. See GPA-Buffer, LP, B-298953.2, Mar. 21, 2007, 2007 CPD para. 53 at 4. Moreover, the Coast Guard took corrective action no more than 4 days after the SBA’s opinion was issued and 5 days after filing its agency report with our Office. Thus, even if we assume that Takota’s initial protest grounds were clearly meritorious, the agency’s corrective action was not unduly delayed and is precisely the kind of prompt agency action that our regulations are designed to encourage. Since the Coast Guard did not take corrective action in response to Takota’s protest and Takota’s protest was not sustained, there is no basis to recommend reimbursement of protest costs.  (Takota Corporation--Costs, B-299600.2, September 18, 2007)  (pdf)


We find that reimbursement is not appropriate in this case since, even if we agreed with Yardney that the agency’s corrective action was not prompt, the protest was not clearly meritorious. In its original protest, Yardney asserted that the evaluation of Quallion’s proposal as superior was flawed, that Quallion enjoyed an unfair competitive advantage, as evidenced by the program manager’s trip to Japan with the firm, and that the program manager unduly influenced the evaluation panel in favor of Quallion. The Air Force asserts that its response (detailed above) constitutes a defensible legal position with regard to the evaluation and unfair advantage issues based in part on the pre-existing business relationship between the awardee and the Japanese firm. Which party’s position is correct is not apparent from the record as it stands. Rather, in order to reach a decision on the matter, we would have required, at a minimum (as was our intention prior to being notified of the corrective action), a supplemental report from the agency and comments on that report by Yardney. Following this further development of the record, we would have had to conduct substantial further analysis of the parties’ positions. In such cases, we do not consider the protest grounds to be clearly meritorious. New England Radiation Therapy Mgmt, Servs., Inc.--Costs, B‑297397.3, Feb. 2, 2006, 2006 CPD para. 30 at 4; LENS, JV--Costs, B-295952.4, Dec. 12, 2005, 2006 CPD para. 9 at 5; East Penn Mfg. Co., Inc.--Costs, B-291503.4, Apr. 10, 2003, 2003 CPD para. 83 at 2-3 (protest not clearly meritorious where decision would have required further steps to complete and clarify the record). We therefore decline to recommend reimbursement of Yardney’s protest costs. Yardney also asserts that it is entitled to reimbursement of its proposal preparation costs. In this regard, Yardney argues that its initial proposal was “wasted” work because the new solicitation--which was expected to identify technology transfer as the preferred solution--represents a solution different from the one it originally proposed, thus requiring it to completely rewrite its proposal. Request for Reimbursement at 5. Where we have sustained a protest, we may recommend reimbursement of proposal preparation costs when changed circumstances render a previously-submitted proposal no longer relevant. See COBRO Corp., B-287578.2, Oct. 15, 2001, 2001 CPD para. 181 at 8-9. However, our Regulations do not provide for recovery of such costs where an agency has taken corrective action. See 4 C.F.R. sect. 21.8(e); Mapp Building Servs.--Costs, B-289160.2, Mar. 13, 2002, 2002 CPD para. 60 at 2. Moreover, we generally will not recommend payment of proposal costs where, as here, the protester will have the opportunity to compete for the requirement under a reopened competition. Moon Eng’g Co., Inc.--Request for Declaration of Entitlement to Costs, B-247053.6, Aug. 27, 1992, 92-2 CPD para. 129 at 7 n.7. (Yardney Technical Products, Inc.--Costs, B-297648.3, March 28, 2006) (pdf)


Under the Competition in Contracting Act of 1984, our Office may recommend that protest costs be reimbursed only where we find that an agency’s action violated a procurement statute or regulation. 31 U.S.C. sect. 3554(c)(1) (2000). Our Bid Protest Regulations provide that where the contracting agency decides to take corrective action in response to a protest, we may recommend that the protester be reimbursed the costs of filing and pursuing its protest, including reasonable attorneys’ fees. 4 C.F.R. sect. 21.8(e) (2005). This does not mean that costs should be reimbursed in every case in which an agency decides to take corrective action; rather, a protester should be reimbursed its costs where an agency unduly delayed its decision to take corrective action in the face of a clearly meritorious protest. Griner’s-A-One Pipeline Servs., Inc.--Entitlement to Costs, B-255078.3, July 22, 1994, 94-2 CPD para. 41. Thus, as a prerequisite to our recommending that costs be reimbursed where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious, i.e., not a close question. J.F. Taylor, Inc.--Entitlement to Costs, B-266039.3, July 5, 1996, 96-2 CPD para.5 at 3; Baxter Healthcare Corp.--Entitlement to Costs, B-259811.3, Oct. 16, 1995, 95-2 CPE para.174 at 4‑5; GVC Cos.--Entitlement to Costs, B-254670.4, May 3, 1994, 94-1 CPD para. 292 at 3. A protest is “clearly meritorious” when a reasonable agency inquiry into the protester’s allegations would show facts disclosing the absence of a defensible legal position. Department of the Army--Recon., B-270860.5, July 18, 1996, 96-2 CPD para. 23 at 3. The mere fact that an agency decides to take corrective action does not establish that a statute or regulation clearly has been violated. Spar Applied Sys.--Declaration of Entitlement, B-276030.2, Sept. 12, 1997, 97-2 CPD para. 70 at 5. Here, we conclude that it is not appropriate to recommend that NERT recover its protest costs because, even if the corrective action was in response to NERT’s original protest, as NERT alleges, that protest was not clearly meritorious. In its original protest, NERT asserted that either ROA’s price failed to account for the number of treatments required by the RFP or, in the alternative, the solicitation requirements were ambiguous. The agency denied that the solicitation was ambiguous and asserted that ROA’s price was in accordance with the RFP’s price schedule. Which party’s position is correct is not apparent from the record, which is why GAO informed the parties that a hearing was likely going to be necessary to complete and clarify the record. See LENS, JV--Costs, B-295952.4, Dec. 12, 2005, 2005 CPD para. __ at 5 (protest was not clearly meritorious where resolution of the protest required further record development such as a hearing to complete and clarify the record). The fact that NERT asserts that the agency’s corrective action, filed after submission of the agency report, was in response to its original protest does not entitle it to its costs where, as here, that protest was not clearly meritorious. See East Penn Mfg. Co., Inc.--Costs, B-291503.4, Apr. 10, 2003, 2003 CPD para. 83 at 2-3; J.F. Taylor, Inc.--Costs, B‑266039.3, July 5, 1996, 96-2 CPD para. 5 at 3. (New England Radiation Therapy Management Services, Inc.--Costs, B-297397.3, February 2, 2006) (pdf)


Where, as here, a procuring agency takes corrective action in response to a protest, our Office may recommend that the agency reimburse the protester its protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing a protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. 4 C.F.R. sect. 21.8(e) (2005); Pemco Aeroplex, Inc.--Recon. and Costs, B-275587.5, B-275587.6, Oct. 14, 1997, 97-2 CPD para.102 at 5. A protest is clearly meritorious when a reasonable agency inquiry into the protest allegations would show facts disclosing the absence of a defensible legal position. AVIATE L.L.C., B‑275058.6, B-275058.7, Apr. 14, 1997, 97-1 CPD para. 162 at 16. For a protest to be clearly meritorious, the issue involved must not be a close question. J.F. Taylor, Inc.‑-Entitlement to Costs, B-266039.3, July 5, 1996, 96-2 CPD para. 5 at 3. Rather, the record must establish that the agency prejudicially violated a procurement statute or regulation. Georgia Power Co.; Savannah Elec. and Power Co.--Costs, B-289211.5, B‑289211.6, May 2, 2002, 2002 CPD para. 81 at 5. The mere fact that an agency decides to take corrective action does not establish that a statute or regulation clearly has been violated. East Penn Mfg. Co., Inc.--Costs, B-291503.4, Apr. 10, 2003, 2003 CPD para. 83 at 3. Here, the record does not establish that LENS’s protest was clearly meritorious. Even were we to accept all of the protester’s arguments concerning the agency’s should-cost estimate and the adequacy of the solicitation, the record does not show a reasonable possibility that LENS was prejudiced, given the significant difference between the agency’s should-cost estimate for government operation and maintenance of the electric utility and LENS’s proposed price.[1] See First Fed. Corp.--Costs, B-293373.2, Apr. 21, 2004, 2004 CPD para. 94 at 3 (protest not clearly meritorious where there was no competitive prejudice to the protester, even where agency took corrective action in response to protest). Here, as our Office repeatedly informed the parties during the protest, the record does not show the cost impact on either the agency’s should-cost estimate or the protester’s proposed price; in fact, this was one of the reasons our Office informed the parties during the protest that a hearing might be necessary to resolve this protest. See Spar Applied Sys.--Declaration of Entitlement, B-276030.2, Sept. 12, 1997, 97-2 CPD para. 70 at 5 (a protest was not clearly meritorious where resolution of the protest required substantial further record development such as conducting a hearing to complete and clarify the record). Without further record development in this case, we are unable to determine that there is any reasonable possibility that LENS was prejudiced, even assuming, arguendo, that the agency’s conduct of the acquisition was deficient. (LENS, JV--Costs, B-295952.4, December 12, 2005) (pdf)


In general, if an agency takes corrective action in response to a protest by the due date for its report in response to the protest, we consider such action to be prompt and will not recommend reimbursement of protest costs. Id.; HSQ Tech.--Costs, B‑276050.2, June 25, 1997, 97-1 CPD para. 228 at 2. This is the case even where the report due date was extended; in such circumstances, although the corrective action may have been somewhat delayed relative to the original report date, we do not consider this to be an undue delay, since it did not result in the protester’s being put to the time and expense of filing comments in response to the report. TRS Research and Transport Planning and Servs., Inc.--Costs, supra. Here, the agency proposed corrective action prior to the extended report due date, and neither its report nor the protester’s comments were filed. Thus, SSC was not required to expend additional time or resources preparing report comments, and the purpose of section 21.8(e) of our Regulations has been served. Under these circumstances, we consider the corrective action to be prompt; it follows that there is no basis for recommending reimbursement of SSC’s protest costs. In any case, we cannot say that SSC’s protest was clearly meritorious. We consider a protest to be clearly meritorious when the agency lacked a defensible legal position; that is, that the protest does not involve a close question. Information Ventures, Inc-- Costs, supra, at 2. The mere fact that an agency decided to take corrective action does not establish that a statute or regulation was violated. Id. Here, deciding the merits of SSC’s protest would have required development of the protest record--including a complete agency report and the protester’s comments on the report--and we would have had to conduct substantial further legal analysis. This being the case, we have no basis to find that SSC’s protest was clearly meritorious. Career Quest, a division of Syllan Careers, Inc.--Costs, B-293435.5, Apr. 13, 2005, 2005 CPD para. 79 at 3. (The Sandi-Sterling Consortium--Costs, B-296246.2, September 20, 2005) (pdf)


The Army’s failure to investigate the substantive grounds of this protest, its failure to produce documents when required, and its failure to take prompt corrective action in the face of a clearly meritorious protest, frustrated the intent of the Competition in Contracting Act of 1984, 31 U.S.C. sections 3551-3556 (2000), amended by the Ronald W. Reagan National Defense Authorization Act for FY 2005, Pub. L. No. 108-375, Section 326, 118 Stat. 1811 (2004), by impeding the economic and expeditious resolution of this protest. LB&M Assocs., Inc.--Entitlement to Costs, B-256053.4, Oct. 12, 1994, 94‑2 CPD para. 135 at 5. Accordingly, we recommend that the protester be reimbursed the reasonable costs of filing and pursuing its protests including the cost of pursuing this request, and including the cost of attorneys’ fees. 4 C.F.R. sect. 21.8(d). The protester should submit its certified claim, detailing the time expended and costs incurred, directly to the contracting agency within 60 days of receiving this decision. 4 C.F.R. sect. 21.8(f)(1). (Johnson Controls World Services, Inc.--Costs, B-295529.4, August 19, 2005) (pdf)


Envirosolve requests that we recommend the reimbursement of its protest costs, including reasonable attorneys fees. Our Bid Protest Regulations provide that where a contracting agency decides to take corrective action in response to a protest, we may recommend that the agency pay the protester the costs of filing and pursuing the protest, including reasonable attorneys fees. 4 C.F.R. 21.8(e) (2004). We will make such a recommendation where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest. A protest is clearly meritorious when a reasonable inquiry into the protesters allegations would show facts disclosing the absence of a defensible legal position ( i.e. , not a close question). As a general rule, so long as an agency takes corrective action in response to a protest by the due date of its protest report, we regard such action as prompt and decline to consider favorably a request to recommend reimbursement of protest costs. Our rule is intended to prevent inordinate delay in investigating the merits of a protest and taking corrective action once an error is evident, so that a protester will not incur unnecessary effort and expense in pursuing its remedies before our Office. PADCO, Inc.--Costs , B-289096.3, May 3, 2002, 2002 CPD 135 at 3-4. (Envirosolve--Costs, B-294420.3, February 17, 2005) (pdf)


In requesting reimbursement of its protest costs, the protester asks us to create an exception to our existing rule regarding reimbursement in cases where the agency takes prompt corrective action. The protester argues that, since it filed numerous protests, and since the agency canceled many of the procurements, our Office should infer a "recurrent pattern" of improper issuance of sole-source acquisitions, warranting recovery of protest costs. In this regard, our rule limiting recovery of protest costs to those cases where agency corrective action is unduly delayed was intended not as an award to prevailing protesters or as a penalty to agencies, but rather to encourage agencies to take prompt action where warranted, and thereby save protesters from expending additional costs in pursuing their protests. See Wall Comonoy Corp.--Entitlement to Costs , B-257183.3, Nov. 16, 1994, 94-2 CPD 189 at 2. That is precisely what HHS did here, and we see no reason to consider abandoning that principle to allow recovery despite the fact that corrective action was promptly taken. Moreover, the protester's argument derives from its assumption that the series of corrective action decisions by HHS indicates an underlying procurement impropriety. We do not have a basis to draw that same conclusion based on the record here. Information Ventures has not established, and the record otherwise does not show, that any of the nine protests in fact was meritorious; the agency maintains that the corrective action was not based on any determination that the protests had merit; and, as noted above, because the corrective action was taken so early in development of the protests, no agency responses on the merits were prepared. Without a basis to find the protests clearly meritorious, we have no ground to recommend reimbursement of costs. (Information Ventures, Inc.--Costs, B-294580.2, B-294586.2, B-294617.2, B-294632.2, B-294706.2, B-294707.2, B-294741.2, B-294760.2, B-294762.2 , December 6, 2004) (pdf)


Where an agency decides to take corrective action in response to a protest, we may recommend that the agency pay protest costs, including attorneys' fees. Bid Protest Regulations, 4 C.F.R. 21.8(e) (2004). We will make such a recommendation only where the agency unduly delayed taking corrective action in the face of a clearly meritorious protest. CSL Birmingham Assocs.; IRS Partners Birmingham--Costs , B251931.4, B251931.5, Aug. 29, 1994, 942 CPD 82 at 3. As a general rule, so long as an agency takes corrective action by the due date for its protest report, we regard the action as prompt. CDIC, Inc.--Entitlement to Costs , B277526.2, Aug.18, 1997, 972 CPD 52. Here, DHS canceled the solicitations in question and notified our Office of its intent to reinstate SCG's contract award prior to the due date for the agency's report. In view of this prompt corrective action, which obviated the need for SCG to incur additional costs, we have no basis for recommending reimbursement of costs. Id. (Security Consultants Group, Inc.--Costs, B-293344.6, November 4, 2004) (pdf)


Here, the agency's notice of corrective action stated that the agency was taking corrective action in response to supplemental protest issues, and specifically identified two supplemental protest issuesfailure to acknowledge a material amendment and violation of the prohibition against facsimile submissions. Williamson first raised these protest grounds on April19, and within 10 days the agency announced its corrective action, well before May 3, the due date for the agency report on the supplemental protests. Since the agency did not submit a report on these supplemental protest issues, the protester did not expend unnecessary time and resources to make further use of the protest process in order to obtain relief on these issues. See J.A. Jones Mgmt. Servs., Inc.Costs , B284909.4, July 31, 2000, 2000 CPD 123 at 4 n.2 (corrective action taken before due date for agency report on supplemental protest is prompt). (Williamson County Ambulance Service, Inc. Costs, B-293811.4, September 16, 2004) (pdf)


Our Office may recommend that an agency reimburse a protester its protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. 4 C.F.R. 21.8(e) (2004); Shindong-A Express Tour Co., Ltd.Costs , B-292459.3, Mar. 25, 2004, 2004 CPD75 at 5. However, where the agency action that rendered a protest academic does not constitute corrective action in response to the protest, our Office will not recommend reimbursement of protest costs. Bionetics Corp.--Entitlement to Costs , B-270323.3, Aug. 16, 1996, 96-2 CPD 70 at 5; H. Watt & Scott Gen. Contractors, Inc.--Request for Declaration of Entitlement to Costs , B-257776.3, Apr. 6, 1995, 95-1CPD 183 at 2-3; Loral Fairchild Corp.--Entitlement to Costs , B-251209.2, May12, 1993, 93-1 CPD 378 at 2. Here, the agency continued to defend against the protest after the contracts had expired. The administrative contracting officer states that as a result of an administrative lapse by the procuring activity, a request to exercise options under either contract was not submitted to him until April 30, the day on which the contracts expired. The contracting officer explains that he did not have sufficient time to obtain the necessary contractor consent and legal review prior to the time the contracts expired and, therefore, he allowed the contracts to expire. The contracting officer further states that he did not consider the pending protests when he allowed the contracts to expire, and that he did not notify agency legal counsel at the time that the contracts had expired. There is nothing in the record that calls into question the contracting officer's statement that the expiration of the contracts was the result of an administrative lapse rather than corrective action in response to REMSA's protest. Indeed, the fact that the agency continued to defend against the protest after the expiration of the contracts supports the agency's position that it did not take corrective action in response to the protest. Since the agency did not take corrective action in response to REMSA's protest, and REMSA's protest was not sustained, there is no basis for recommending that the agency reimburse REMSA its protest costs. (REMSA, Inc.--Costs, B-293771.2, September 3, 2004) (pdf)


The fact the agency ultimately came to the position, as a result of the new information presented by the protester, that bags with an anti-reflux chamber would not meet its needs may have justified the VA’s taking corrective action, but it does not establish that selection of such bags initially was unlawful. We conclude that the agency did not unduly delay its decision to take corrective action in the face of a clearly meritorious protest.  (LSL Industries, Inc.--Costs, B-291777.2, August 18, 2003) (pdf)


Where a proposal deviates from a specification by a negligible amount, the agency may waive the requirement, so long as it did not prejudice other vendors. Gulf Copper Ship Repair, Inc., B-292431, Aug. 27, 2003, 2003 CPD ¶ 155 at 4 (deviation of 1 inch water depth specification properly waived by agency); Magnaflux Corp., B-211914, Dec. 20, 1983, 84-1 CPD ¶ 4 at 3-4 (agency permitted to waive deviation from specification which was minor and did not result in prejudice); Champion Road Mach. Int’l Corp., B-200678, July 13, 1981, 81-2 CPD ¶ 27 at 4 (deviation of two horsepower is minor and should have been waived by agency where price, quantity, quality, and delivery were not affected). In our view, since the approximately one-half mile deviation from the 25-mile requirement appears minor on its face and, according to SSA, did not diminish the purpose of the restriction, it could reasonably be viewed by SSA as negligible. The deviation therefore was waivable, so long as First Federal, the only other vendor in the competition, was not prejudiced. There is no evidence of competitive prejudice. In this regard, while First Federal asserts that the waiver gave ISC an “unfair competitive advantage,” (Protest at 9), it does not show how it would have altered its proposal to improve its competitive standing had it been given an opportunity to respond to the relaxed requirement. See Copper Ship Repair, Inc., supra. For example, it does not assert that knowledge of the relaxation would have affected its price or the location of its proposed facility. Given the absence of any evidence of prejudice to First Federal, we conclude that the agency had a defensible legal position and, thus, that the protest was not clearly meritorious. It follows that there is no basis to recommend reimbursement of protest costs in this case. (First Federal Corporation--Costs, B-293373.2, April 21, 2004) (pdf)


As a general rule, we consider a successful protester should be reimbursed the costs incurred with respect to all issues pursued, not merely those upon which it prevails. Price Waterhouse--Claim for Costs, B-254492.3, July 20, 1995, 95-2 CPD ¶ 38 at 3; Data Based Decisions, Inc.--Claim for Costs, B-232663.3, Dec. 11, 1989, 89-2 CPD ¶ 538 at 4. While we have limited the award of protest costs to successful protesters where a part of their costs is allocable to a protest issue that is so clearly severable as to essentially constitute a separate protest, see, e.g., Interface Flooring Sys. Inc.--Claim for Attorneys' Fees, B-225439.5, July 29, 1987, 87-2 CPD ¶ 106 at 2-3, limiting recovery of protest costs in all cases to only those issues on which the protester prevailed would be inconsistent with the broad, remedial congressional purpose behind the cost reimbursement provisions of CICA. TRESP Assocs., Inc.--Costs, B‑258322.8, Nov. 3, 1998, 98-2 CPD ¶ 108 at 2.  Here, we conclude that the issues raised are intertwined parts of AAR's basic objection that the Marshals Service misevaluated proposals. Furthermore, we do not find that the record established that there were clearly severable issues upon which AAR would not have prevailed. Accordingly, we see no reason why AAR's recovery of protest costs should be limited to a particular issue.  (AAR Aircraft Services--Costs, B-291670.6, May 12, 2003)  (pdf)


In sum, because KENROB's challenges to its own evaluation and to the prices proposed by other vendors are either untimely or without merit, and, as a result, KENROB is not an interested party to challenge the evaluation of Zen, we cannot conclude that any of the protest grounds raised by KENROB are clearly meritorious.  Georgia Power Co.; Savannah Elec. and Power Co.--Costs, supra.  Accordingly, we have no basis upon which to recommend that KENROB recover its protest costs.  (KENROB & Associates, Inc.--Costs, B-291573.7, April 25, 2003) 


In our view, a reasonable agency inquiry into these allegations would have disclosed the absence of a defensible legal position and, by unduly delaying corrective action, the agency caused the protester to expend unnecessary time and resources to make further use of the protest process to obtain relief. Georgia Power Co.; Savannah Elec. and Power Co.--Costs, supra, at 6. The Army correctly notes that this Office will consider post-protest explanations that are credible and consistent with the contemporaneous documentation in rendering a decision, and that the Army might have prevailed in the protest as a result of the hearing. See, e.g., Jason Assocs. Corp., B-278689 et al., Mar. 2, 1998, 98-1 CPD ¶ 67 at 6-7. Here, however, the Army provided written post-protest information that was inconsistent with and had little or no nexus to the contemporaneous record, yet opted to forgo the hearing which might have permitted it to prevail in the protest. That being the case, the record before us stands as inadequately documented and insufficiently supportive of the source selection decision.  (Martin Electronics, Inc.--Costs, B-291732.2, April 22, 2003)  (pdf)


Our Bid Protest Regulations provide that where the contracting agency decides to take corrective action in response to a protest, we may recommend that the protester be reimbursed the costs of filing and pursuing its protest, including reasonable attorneys' fees. 4 C.F.R. § 21.8(e) (2002). This does not mean that costs should be reimbursed in every case in which an agency decides to take corrective action; rather, a protester should be reimbursed its costs only where an agency unduly delayed its decision to take corrective action in the face of a clearly meritorious protest. Griner's-A-One Pipeline Servs., Inc.--Entitlement to Costs, B-255078.3, July 22, 1994, 94-2 CPD ¶ 41 at 5; LB&M Assocs., Inc.,-- Entitlement to Costs, B-256053.4, Oct. 12, 1994, 94-2 CPD ¶ 135 at 4. Thus, as a prerequisite to our recommending that costs be reimbursed where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious, i.e., not a close question. Georgia Power Co.; Savannah Elec. and Power Co.--Costs, B-289211.5, B-289211.6, May 2, 2002, 2002 CPD ¶ 81 at 5. A protest is “clearly meritorious” where the record plainly establishes that the agency prejudicially violated a procurement statute or regulation. Tri-Ark Indus., Inc.--Declaration of Entitlement, B-274450.2, Oct. 14, 1997, 97-2 CPD ¶ 101 at 3. (Baine Clark--Costs, B-290675.3, September 23, 2002)


Where a procuring agency takes corrective action in response to a protest, our Office may recommend that the agency reimburse the protester its protest costs where, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing a protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Pemco Aeroplex, Inc.--Recon. and Costs, B-275587.5, B-275587.6, Oct. 14, 1997, 97-2 CPD ¶102 at 5. A protest is clearly meritorious when a reasonable agency inquiry into the protest allegations would show facts disclosing the absence of a defensible legal position. AVIATE L.L.C., B-275058.6, B-275058.7, Apr. 14, 1997, 97-1 CPD ¶ 162 at 16. For a protest to be clearly meritorious, the issue involved must not be a close question. J.F. Taylor, Inc.--Entitlement to Costs, B-266039.3, July 5, 1996, 96-2 CPD ¶ 5 at 3. Rather, the record must establish that the agency prejudicially violated a procurement statute or regulation. Tri-Ark Indus., Inc.--Declaration of Entitlement, B-274450.2, Oct. 14, 1997, 97-2 CPD ¶ 101 at 3.  (Georgia Power Company; Savannah Electric and Power Company--Costs, B-289211.5, B-289211.6, May 2, 2002)  (pdf)


When an agency takes corrective action prior to our issuing a decision on the merits, we may recommend that the protester recover the reasonable costs of filing and pursuing the protest. 4 C.F.R. sect. 21.8(e) (2001). Under this provision, we will recommend recovery of protest costs where, based on the circumstances of the case, we conclude that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest. Griner's-A-One Pipeline Servs., Inc.--Entitlement to Costs, B-255078.3, July 22, 1994, 94-2 CPD para. 41 at 5. For a protest to be clearly meritorious, the issue involved must not be a close question. J.F. Taylor, Inc.--Entitlement to Costs, B-266039.3, July 5, 1996, 96-2 CPD para. 5 at 3. Rather, the record must establish that the agency prejudicially violated a procurement statute or regulation. Millar Elevator Serv. Co.--Costs, B-281334.3, Aug. 23, 1999, 99-2 CPD para. 46 at 2. The fact that an agency decides to take corrective action does not establish that a statute or regulation clearly has been violated. J.F. Taylor, Inc.--Entitlement to Costs, supra.  (Sun Chemical Corporation--Costs, B-288466.4, December 7, 2001)


Our Office may recommend that a protester be reimbursed the costs of filing and pursuing a protest where the contracting agency decides to take corrective action in response to the protest. 4 C.F.R. sect. 21.8(e) (2001). Such recommendations are generally based upon a concern that an agency has taken longer than necessary to initiate corrective action in the face of a clearly meritorious protest, thereby causing protesters to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. QuanTech, Inc.--Costs, B-278380.3, June 17, 1998, 98-1 CPD para. 165 at 2-3. The reimbursement of protest costs may also be appropriate where an agency does not timely implement the promised corrective action that prompted the dismissal of a meritorious protest. Louisiana Clearwater, Inc.--Recon. and Costs, B-283081.4, B-283081.5, Apr. 14, 2000, 2000 CPD para. 209 at 6. Where an agency implements corrective action that fails to address a meritorious issue raised in the protest that prompted the corrective action, such that the protester is put to the expense of subsequently protesting the very same procurement deficiency, the agency action, even though promptly proposed, has precluded the timely, economical resolution of the protest. Id. Here, we have no basis to recommend that NTMI recover the costs it incurred in filing its prior protests because, even if the prior protests were meritorious, USDA did timely implement the promised corrective action that prompted the dismissal of the protests.  (New Technology Management, Inc., B-287714.2; B-287714.3; B-287714.4, December 4, 2001)


With respect to DOS's concern with their authority to reimburse protesters for the costs of filing and pursuing protests at GAO in the absence of a recommendation from our Office, the Federal Acquisition Streamlining Act of 1994, sect. 1066, 41 U.S.C. sect. 253b(l) (Supp. IV 1998), provides that if, in connection with a protest, the head of an executive agency determines that a solicitation, proposed award, or award does not comply with the requirements of law or regulation, the agency head may pay the costs described within section 3554(c)(1) of title 31 of the United States Code (protest costs and proposal preparation costs) within the limits stated in section 3554(c)(2).  (Inter-Con Security Systems, Inc.; CASS, a Joint Venture--Costs, B-284534.7; B-284534.8, March 14, 2001)  (pdf)


Regarding the other prong of our analysis, the question of the promptness of the agency's corrective action, we generally do not consider corrective action to be prompt where it is taken after the due date for the agency report. See CDIC, Inc.--Entitlement to Costs, B-277526.2, Aug. 18, 1997, 97-2 CPD para. 52 at 2. GSA did not propose corrective action until May 8, well after the agency had submitted its report and the protester had incurred the time and expense necessary to respond to that report. Under these circumstances, we do not consider the corrective action to have been prompt. Tri-Ark Indus., Inc.--Declaration of Entitlement, B-274450.2, Oct. 14, 1997, 97-2 CPD para. 101 at 4-5. Accordingly, we recommend that Millar be reimbursed its protest costs. Millar should submit its claim for such costs, detailing and certifying the time expended and costs incurred, directly to the agency within 60 days of receipt of this decision. Bid Protest Regulations, 4 C.F.R. sect. 21.8(f)(1) (2000).  (Millar Elevator Service Company--Costs, B-284870.3, August 3, 2000)  (pdf)

Comptroller General - Listing of Decisions

For the Government For the Protester
New American Government Services, LLC--Costs B-413636.2: Apr 21, 2017 Technatomy Corporation; Octo Consulting Group, Inc.--Costs B-413116.49, B-413116.50: Dec 14, 2016
Boise Cascade Wood Products, LLC B-413987.2: Apr 3, 2017 Fluor Energy Technology Services, LLC--Costs B-411466.3: Jun 7, 2016  (pdf)
JRS Staffing Services--Costs B-410708.3: Nov 9, 2015  (pdf) JV Derichebourg-BMAR & Associates, LLC--Costs, B-407562.3, May 3, 2013  (pdf)
TRAX International Corporation--Costs B-410441.5: Aug 26, 2015  (pdf) URS Federal Services, Inc.--Costs, B-406140.4, Jul 17, 2012 (pdf)
Palmetto Isotopes, B-410268.2: Jan 5, 2015  (pdf) Blackstone Consulting, Inc., B-405909.2, Jan 31, 2012  (pdf)
McConnell, Jones, Lanier & Murphy LLC--Costs, B-407706.3, May 28, 2013  (pdf) Science Applications International Corporation, B-405155.3, October 3, 2011
NxGen Process Group, LLC--Costs, B-406650.2, May 24, 2012  (pdf) Nationwide IT Services, Inc. - Costs, B-404160.2, August 8, 2011  (pdf)
Kingdomware Technologies--Costs, B-406228.2, May 10, 2012  (pdf) KGL Food Services, WLL; Intermarkets Global--Costs, B-400660.7; B-400660.8, June 20, 2011 (pdf)
LGS Innovations LLC, B-405932.3, Apr 26, 2012  (pdf) Symvionics, Inc.--Costs, B-403230.6, May 16, 2011  (pdf)
Re-Engineered Business Solutions, Inc.--Costs, B-404214.4, July 14, 2011  (pdf) Greentree Transportation Company, Inc.--Costs, B-403556.4, May 16, 2011  (pdf)
The CFS Group, LLC--Costs, B-403539.3, May 13, 2011  (pdf) Basic Commerce and Industries, Inc.--Costs, B-401702.3,February 22, 2010  (pdf) 
Iron Vine Security, LLC - Costs, B-403578.3, April 15, 2011  (pdf) Facility Services Management, Inc.--Costs, B-402757.5, September 27, 2010 (pdf)
Computer Cite--Costs, B-402792.5; B-403769.2, April 14, 2011  (pdf) ManTech Systems Engineering Corporation; TWD & Associates, Inc., B-401542.6; B-401542.7, December 22, 2009 (pdf)
A-Ability Medical Equipment, Inc.--Costs, B-403256.3, April 4, 2011  (pdf) Commercial Design Group, Inc.--Costs, B-400923.3, June 10, 2009 (pdf)
Livanta, LLC-Costs, B-404215.2, April 5, 2011  (pdf) Core Tech International Corporation--Costs, B-400047.3, June 2, 2009  (pdf)
Firetrace Aerospace, LLC--Costs, B-403193.4, December 17, 2010 (pdf) Core Tech International Corporation--Costs, B-400047.2,  March 11, 2009  (pdf)
Apptis Inc.--Costs, B-402146.3, March 31, 2010  (pdf) Pond Security Group Italia JV--Costs, B-400149.2, March 19, 2009 (pdf)
Contrack International, Inc.-Costs, B-401871.3,  February 17, 2010 (pdf) Al Qabandi United Company; American General Trading & Contracting‑‑Costs, B-310600.3; B-310600.4, June 5, 2008. (pdf)
DGR Associates, Inc.--Costs, B-401791.5, February 16, 2010 (pdf) Sysorex Federal, Inc.--Costs, B-310273.2, March 27, 2008 (pdf)
Talladega Machinery & Supply Company, Inc.--Costs, B-401049.3, July 6, 2009 (pdf) World Communications Center, Inc.--Costs, B-310398.4, January 16, 2008 (pdf)
AGFA HealthCare Corporation--Costs, B-400733.6, April 22, 2009 (pdf) Johnson Controls World Services, Inc.--Costs, B-295529.4, August 19, 2005 (pdf)
Triple Canopy, Inc.--Costs, B-310566.9; B-400437.4, March 25, 2009 (pdf) AAR Aircraft Services--Costs, B-291670.6, May 12, 2003  (pdf)
Intercontinental Construction Contracting, Inc.--Costs, B-400729.3, March 4, 2009 (pdf) Martin Electronics, Inc.--Costs, B-291732.2, April 22, 2003  (pdf)
RANA Technologies--Costs, B-400471.2, February 3, 2009  (pdf) Baine Clark--Costs, B-290675.3, September 23, 2002  (pdf)
Taylor Consultants, Inc.--Costs, B-400324.3, February 2, 2009 (pdf) PADCO, Inc.--Costs, B-289096.3, May 3, 2002 (pdf)
Coronet Machinery Corporation--Costs, B-400197.2, November 18, 2008  (pdf) DevTech Systems, Inc., B-284860.4, August 23, 2002  (pdf)
Exec Plaza, LLC--Costs, B-400107.3, October 24, 2008 (pdf) Georgia Power Company; Savannah Electric and Power Company--Costs, B-289211.5, B-289211.6, May 2, 2002  (pdf)
Tremco Incorporated--Costs, B-310927.2, April 21, 2008 (pdf) Professional Landscape Management Services, Inc.--Costs, B-287728.2, November 2, 2001  (pdf)
Singleton Enterprises-GMT Mechanical, Joint Venture--Costs, B-310454.3, March 27, 2008 (pdf) Cox & Associates CPAs--Costs, B-286753.3, June 19, 2001  (pdf)
Eagle Home Medical Corporation--Costs, B-299821.3, February 4, 2008 (pdf) The Jones/Hill Joint Venture--Costs, B-286194.3, March 27, 2001
RKR Joint Venture, LLC--Costs, B-299856.2, December 7, 2007  (pdf)  Inter-Con Security Systems, Inc.; CASS, a Joint Venture--Costs, B-284534.7; B-284534.8, March 14, 2001  (pdf)
Takota Corporation--Costs, B-299600.2, September 18, 2007 (pdf) Minolta Corporation--Costs, B-285010.2, September 26, 2000  (pdf)
Swales Aerospace--Costs, B-299260.4, April 30, 2007 (pdf) York Building Services, Inc.; Olympus Building Services, Inc.--Costs, B-282887.10; B-282887.11, August 29, 2000  (pdf)
Yardney Technical Products, Inc.--Costs, B-297648.3, March 28, 2006 (pdf) Millar Elevator Service Company--Costs, B-284870.3, August 3, 2000  (pdf)
New England Radiation Therapy Management Services, Inc.--Costs, B-297397.3, February 2, 2006 (pdf)  
LENS, JV--Costs, B-295952.4, December 12, 2005 (pdf)  
The Sandi-Sterling Consortium--Costs, B-296246.2, September 20, 2005 (pdf)  
Envirosolve--Costs, B-294420.3, February 17, 2005 (pdf)  
Information Ventures, Inc.--Costs, B-294580.2, B-294586.2, B-294617.2, B-294632.2, B-294706.2, B-294707.2, B-294741.2, B-294760.2, B-294762.2 , December 6, 2004 (pdf)  
Security Consultants Group, Inc.--Costs, B-293344.6, November 4, 2004 (pdf)  
Williamson County Ambulance Service, Inc. Costs, B-293811.4, September 16, 2004 (pdf)  
REMSA, Inc.--Costs, B-293771.2, September 3, 2004 (pdf)  
First Federal Corporation--Costs, B-293373.2, April 21, 2004 (pdf)  
LSL Industries, Inc.--Costs, B-291777.2, August 18, 2003 (pdf)  
J&J/BMAR Joint Venture, LLP--Costs, B-290316.7, July 22, 2003 (pdf)  
KENROB & Associates, Inc.--Costs, B-291573.7, April 25, 2003)   
TRS Research and Transport Planning and Services, Inc. -- Costs, B-290122.2, July 25, 2002  (pdf)  
Alatech Healthcare, LLC--Protest; Custom Services International, Inc.--Costs, B-289134.3; B-289134.4, April 29, 2002  (PDF Version)  
Sun Chemical Corporation--Costs, B-288466.4, December 7, 2001  (PDF Version)  
New Technology Management, Inc., B-287714.2; B-287714.3; B-287714.4, December 4, 2001  (PDF Version)  
East Bay Elevator Company, Inc.--Costs, B-286315.2, July 26, 2001 (pdf)  
J. A. Jones Management Services, Inc.--Costs, B-284909.4, July 31, 2000 (pdf)  
ATA Defense Industries, Inc.--Costs, B-282511.6, March 14, 2000 (pdf)  
Novartis Pharmaceuticals Corporation; Parke-Davis--Costs, B-281681.8; B-281681.9, August 24, 1999 (pdf)  
Millar Elevator Service Company--Costs, B-281334.3, August 23, 1999 (pdf)  

U. S. Court of Federal Claims - Key Excerpts

New On July 15, 2016, we granted judgment on the administrative record in favor of plaintiff in this post-award bid protest. Starry Assocs., Inc. v. United States, 127 Fed. Cl. 539 (2016). Starry Associates, Inc. (“Starry”) protested the Department of Health and Human Services’ (“HHS”) decision to cancel a solicitation after the agency lost Starry’s protest at the Government Accountability Office (“GAO”). Plaintiff now moves for an award of attorney fees and other costs pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d) (2012). That motion is fully briefed. Oral argument was held on February 13, 2017. Because the government was not substantially justified in its conduct throughout the procurement process, including this lawsuit, Starry is entitled to an award of fees and costs. Further, the egregious nature of the agency’s failures throughout the process and the time and resources necessary to be spent by plaintiff vindicating its rights entitle it to an upward adjustment of the statutorily-set hourly rate.

(sections deleted)

EAJA permits a prevailing party other than the United States to recover fees so long as it meets the statutory requirements: 1) the claimant must be a prevailing party, 2) an application must be timely filed with adequate supporting documentation, 3) the claimant must satisfy the statutory size limits, 4) the fees being sought were expended in civil litigation, 5) the government’s position was not substantially justified, and 6) no special circumstances make the award unjust. 28 U.S.C. § 2412(d)(1)(A), (B). The act also limits attorney fees “in excess of $125 per hour unless the court determines an increase in the cost of living or special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.” 28 U.S.C. § 2412(d)(2)(A)(ii). Only the government’s justification and the hourly rate of Starry’s claimed fees are at issue here. Plaintiff asserts that its fees should be adjusted upwards to its actual billing rate or, in the alternative, at least adjusted to account for the higher cost of living in the metro Washington, DC, area.

I. Substantial Justification

We begin with the issue of whether defendant was substantially justified. The government bears the burden of proving that its conduct was substantially justified. Doty v. United States, 71 F.3d 384, 385 (Fed. Cir. 1995). The standard is one of reasonableness. That is to say that the government must have had a “reasonable basis both in law and fact” for its position, such that a reasonable person would be satisfied. Renee v. Duncan, 686 F.3d 1002, 1017 (9th Cir. 2012). The “position of the United States” means, in addition to the position taken in the civil action, the action or failure to act by the agency upon which the civil action is based. 28 U.S.C. § 2412(d)(2)(A). The Supreme Court has stated that, when a case involves multiple stages, the court should look “at the entirety of the government’s conduct.” Comm’r, I.N.S. v. Jean, 496 U.S. 154, 159 (1990). The court will assess the government’s action as a whole, encompassing both the agency’s pre-litigation conduct and the government’s subsequent litigation position. Id. Defendant contends that the Department of Justice was substantially justified because it reasonably relied on the agency’s representations that there were redundancies inherent in the solicitation and the existing software license agreements. Defendant also argues that it acted reasonably in reliance on the; GAO decision to deny plaintiff’s third protest. Defendant makes much of our holding that we did not need to reach the question of bias, arguing that this allegation was the real thrust of plaintiff’s protest.

We find defendant’s reliance on HHS’s earlier representations that there were redundancies between the solicitation and the license agreements to be unreasonable. As we explained in our opinion on the merits, there is no evidence in the record that the agency undertook any serious review of the services provided under those three contract vehicles. Mr. Davis testified that he did not read the license agreements nor perform any real comparison of the agreements to the UFMS support contract. See Starry, 127 Fed. Cl. at 550. There is no basis in fact to support such a position. Defense counsel was not simply at the mercy of the agency with regard to its understanding of the evidence. It had the Administrative Record as initially composed and also the benefit of the deposition transcripts after the record was supplemented. At no point, but especially not after the depositions, did the record support the agency’s representation that it had evaluated the three contracts for redundancies. The government’s position was not substantially justified at any point during this procurement process, including its defense in court.

Likewise, defendant’s reliance on GAO’s decision in the third protest is unavailing. Although GAO accepted the agency’s explanation of the cancellation, it did not examine the underlying evidence. It equated the plausibility of Mr. Davis’ explanation with its accuracy, assuming his statements had an underlying basis in fact. As we explained in our earlier opinion, however, that explanation was illusory and completely contrived. The decision to cancel was therefore arbitrary and capricious. The record as further developed in this protest ought to have thoroughly disabused defense counsel of any notion of rationality.

Lastly, although defendant is correct that we did not reach the issue of bias on the merits of plaintiff’s protest, that provides no justification for either the agency’s conduct orthe government’s defense in court. Plaintiff challenged not only the fundamental fairness of the procurement (bias) but also the rationality of the evaluations and subsequent decision to cancel. Plaintiff’s challenge to the first two evaluations was sustained by GAO in the second protest, and we also found that basis to be well supported by the record. As we stated, the record “contains a lengthy history of agency personnel being indifferent to the fidelity of the procurement process.” 127 Fed. Cl. at 549. The problems began well before Mr. Davis’ decision to withdraw the solicitation and continued until the court issued an injunction. At no point was the government’s position reasonably justified based on the law or the facts. Plaintiff is therefore entitled to recover fees and costs under EAJA. We turn then to the quantum of that award.

II. Special Factor

EAJA currently provides for the recovery of attorney fees at up to $125 per hour. The act, however, provides two exceptions for exceeding the $125 hourly rate: a cost of living adjustments (“COLA”) or any other “special factor” that the court finds justifies a higher amount. 28 U.S.C. § 2412(d)(2)(A)(ii). EAJA does not define what constitutes a special factor but does provide one example: “the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.” Id. The use of the term “such as” before the example indicates that limited availability of qualified counsel is not the only “special factor” that can arise. The Supreme Court declined to delineate specifically what constitutes a special factor but did limit the applicability of a special factor adjustment to those circumstances that are not applicable to a broad spectrum of litigation. Pierce v. Underwood, 487 U.S. 552, 573 (1988). It is otherwise left to the courts to determine what constitutes a special factor on a case by case basis. Cf. Chui v. United States, 948 F.2d 711, 713 (Fed. Cir. 1991) (stating that whether to award fees under EAJA and how much are discretionary).

It is plaintiff’s burden to establish its entitlement to a special factor adjustment. Carmichael v. United States, 70 Fed. Cl. 81, 84 (2006). Here, plaintiff asserts that “the highly unusual conduct of the agency” and “‘lack of fidelity to the procurement process’” should constitute a special factor justifying a higher fee award. Pl.’s Reply at 17 (quoting Starry, 127 Fed. Cl. at 549). Plaintiff details, much as the court did in our opinion of July 2016, the tortured and lengthy history of Starry’s attempts to hold HHS accountable to the standards and processes it was promised in the solicitation. In the alternative, plaintiff asks for a COLA.

Defendant does not contest the application of a COLA as measured by the Department of Labor’s Consumer Price Index (“CPI”), which would bring the adjusted hourly rate to $192.09. But, defendant does dispute the finding of a special factor justifying any higher rate. Defendant argues that the Supreme Court in Pierce has narrowed the scope of potential special factors to those relating to the “distinctive knowledge or specialized skill” of plaintiff’s attorneys. Pierce, 487 U.S. at 572. Defendant argues that the nature of the case, i.e., in this instance, the egregious agency conduct, is relevant only so far as the proceedings can be handled capably by a very limited number of attorneys.

Defendant is plainly wrong in this reading of the statute. If Congress had intended to limit full recovery by a successful litigant only to situations in which qualified attorneys are scarce, it would not have characterized that circumstance as merely an example. Further, Pierce lends little support to the government’s argument that the nature of the case and the agency’s actions cannot support a finding of a special factor for EAJA purposes. The Supreme Court narrowly interpreted the meaning of the one special factor listed as an example in the statute, the “limited availability of qualified attorneys,” to refer to attorneys in very specialized areas of law and not attorneys that are highly capable in litigation generally. Pierce, 487 U.S. at 572. In other words, the Supreme Court determined that a special factor should not be applicable “to a broad spectrum of litigation.” Id. at 573. The Court declined to specify what other special factors might be, but found that nothing that the district court in that case relied on in its upward adjustment of EAJA fees constituted such a special factor. Id.

In short, while defendant is correct that plaintiff is unable to point to any reported prior award under similar circumstances, we do not treat that as the end of the inquiry. Unless we are to turn the special factor exception into a snipe hunt, we can assume that Congress did, in fact, contemplate that, under other special circumstances, more than the statutory minimum can be awarded.

Our conclusion that the particular circumstances of this case justify an award of attorneys fees at the actual amounts billed begins with two observations. First, what the agency did here constitutes an egregious example of intransigence and deception, not just with regard to the bidder, but to the GAO and to the court. It is fortunate, but relevant, that this was anomalous conduct. Second, our bid protest jurisdiction is intended as a high level review of agency conduct under relevant federal procurement statutes and regulations, such as the Competition in Contracting Act and the Federal Acquisition Regulation, which leave a great deal to agency discretion. The bedrock of those legal criteria, however, is that procurements are to be conducted fairly and transparently. The government would find its operations considerably more difficult if vendors could not routinely assume they were being treated in a straight forward fashion. Disappointed offerors inevitably complain about what amount to good faith disagreements with agency evaluators. They should not have to worry that government employees do not take their duties seriously. Plaintiff has been forced to file three bid protests at GAO and one lawsuit at the court in a more than two-year effort to ensure that HHS kept its promises and fairly conducted this procurement.

Starry filed its first protest at GAO in December 2014. This quickly prompted a promise of corrective action taken to fill in gaps in the record, a half measure. After threat of suit at the Court of Federal Claims, HHS promised to conduct a more thorough correction and to reevaluate proposals. Starry withdrew its protest, taking the agency’s representation at face value. This was the agency’s first misrepresentation. As the depositions of agency employees made clear, HHS did not conduct a meaningful reevaluation but instead undertook an attempt to pad the record to better support award to Intellizant. Further, the record at court revealed that legal errors were made during the reevaluation concerning advice given to TEP members after inquiries to the CO. See 127 Fed. Cl. at 545.

This led to Starry’s second protest at GAO, filed on May 5, 2015. GAO sustained this protest, deciding that HHS failed to evaluate Intellizant properly under the solicitation’s requirements. This protest process was not without agency misconduct, however. It misled GAO by submitting a statement by Mr. Davis that he had “recused” himself from the procurement. Thus GAO did not find any merit to Starry’s allegations of bias. As we laid out in our two prior opinions, that representation was untruthful. Mr. Davis was involved in picking the TEP members, personally selecting at least one of the members; he was consulted by one member of the TEP during the process, Ms. Karen Slater; and then later he made the decision to cancel the solicitation rather than deal with the consequences of losing the protest at GAO, providing an illusory basis for that decision.

The fact that the agency left the decision of what to do with the procurement to Mr. Davis after it has just represented to GAO that he was uninvolved is a further reflection of its lack of commitment to the integrity of the process. Other agency personnel simply accepted Mr. Davis’ explanation that the solicitation should be canceled, and no one undertook any effort to find out whether the basis he offered for cancellation was accurate.

Thus, Starry was again forced to file a protest at GAO, which again prompted misrepresentations by the agency. HHS proffered to GAO the rationale given byMr. Davis–redundancies in the services solicited–and GAO accepted that information without further investigation and denied the protest. Knowing the illegitimacy of the rationale given, plaintiff was left with no recourse but to file suit here. We need not detail again the history of the suit at this court.

The extreme measures that plaintiff was forced to pursue to vindicate its right to a rational and lawful federal procurement process, combined with the shocking disregard of the truth by the agency, justify an award at higher than the default rate.3 Both Starry and GAO were misled on multiple occasions. Although we did not explicitly reach the question of bias, the record is replete with examples of agency misconduct.

Fortunately, our holding in this regard is not applicable across a broad spectrum of litigation, nor would it entitle every successful protestor to an EAJA special factor award. The circumstances of this case are particular and unique. The bid protest process, both at GAO and the court, is in most regards an exception to the norms of civil litigation. The scope of review is normally limited to the administrative record and discovery is not usually allowed. The standard of review is highly deferential. The result of all of which is that bid protests are narrowly tailored to achieve a relatively focused scope of inquiry and an expedited consideration by the two fora that hear them. When, as here, however, the agency’s conduct necessitates that an offeror file four protests in in over two years, in two fora, winning two of them and prompting one corrective action, and when the agency’s defense of its conduct is highly irregular (misrepresentations and illusory promises), the circumstances of the case are anything but ordinary. We find that a special factor justifies award at a higher rate in this case. (Starry Associates, Inc. v. U. S., No. 16-44C April 10, 2017)


A. Recovering Attorneys’ Fees and Costs under the EAJA

Under the [Equal Access to Justice Act] EAJA, a “prevailing party” in a civil action against the United States may recover attorneys’ fees and other costs “unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.” 28 U.S.C. § 2412(d)(1)(A). “The EAJA applicant has the burden of proving he is a prevailing party.” Davis v. Nicholson, 475 F.3d 1360, 1366 (Fed. Cir. 2007) (citing RAMCOR Servs. Grp., Inc. v. United States, 185 F.3d 1286, 1288 (Fed. Cir. 1999)). However, “the government bears the burden of proving its position was substantially justified.” Libas, Ltd. v. United States, 314 F.3d 1362, 1365 (Fed. Cir. 2003) (citing Neal & Co. v. United States, 121 F.3d 683, 686 (Fed. Cir. 1997)). A plaintiff seeking review of agency action may be a prevailing party for the purposes of the EAJA if a court finds that the agency committed an error and remands to the agency, even if the agency does not ultimately grant the plaintiff the substantive relief it originally sought. Ward v. U.S. Postal Serv., 672 F.3d 1294, 1299 (Fed. Cir. 2012) (citing Former Emps. of Motorola Ceramic Prods. v. United States, 336 F.3d 1360, 1366 (Fed. Cir. 2003)). In order to be “substantially justified,” the government’s position must be “justified in substance or in the main—that is, justified to a degree that could satisfy a reasonable person.” Norris v. SEC, 695 F.3d 1261, 1265 (Fed. Cir. 2012) (per curium) (quoting Pierce v. Underwood, 487 U.S. 552, 565 (1988)).

In Buckhannon Bd. & Care Home, Inc. v. West Virginia Department of Health & Human Resources, the Supreme Court addressed the question of whether a plaintiff could be a “prevailing party” for the purposes of a fee shifting statute if the plaintiff “achieves the desired result because the lawsuit brought about a voluntary change in the defendant’s conduct.” 532 U.S. 598, 601 (2001). The Court rejected this so-called “catalyst theory” and instead found that in order to be a prevailing party, the plaintiff must have “been awarded some relief by the court . . . .” Id. at 603. The Court further explained that a “judicially sanctioned change in the legal relationship of the parties” such as a judgment on the merits or a consent decree was necessary in order to confer prevailing party status. Id. at 604-05 (citations omitted). The Federal Circuit has found that the Supreme Court’s standard in Buckhannon applies when determining whether a plaintiff is a prevailing party under the EAJA. Brickwood Contractors, Inc. v. United States, 288 F.3d 1371, 1380 (Fed. Cir. 2002); see also, e.g., Brown v. McDonald, 591 F. App’x 942, 944 (Fed. Cir. 2014). As the Federal Circuit held in Rice Services, Ltd. v. United States, “[I]n order to demonstrate that it is a ‘prevailing party,’ an EAJA applicant must show that it obtained an enforceable judgment on the merits or a court-ordered consent decree that materially altered the legal relationship between the parties, or the equivalent of either of those.” 405 F.3d 1017, 1025 (Fed. Cir. 2005).

B. AGS is Not a Prevailing Party

In this case, the government agreed to take voluntary corrective action, and the parties agreed to voluntarily dismiss the case, before the court had an opportunity to issue any opinion on the merits. Therefore, under Federal Circuit and Supreme Court precedent, there has been no “actual relief on the merits of [AGS’s] claim” that “materially alter[ed] the legal relationship between the parties by modifying the defendant’s behavior in a way that directly benefits the plaintiff.” Innovation Dev. Enters. of Am., Inc. v. United States, 600 F. App’x 743, 746 (Fed. Cir. 2015) (quoting Farrar v. Hobby, 506 U.S. 103, 111-12 (1992)). Nor is the parties’ joint stipulation of dismissal sufficient to confer prevailing party status. In Rice, the Federal Circuit found that an order of dismissal “was not an enforceable judgment on the merits because the court did not reach the merits,” and therefore, the plaintiff was not a prevailing party. 405 F.3d at 1026. In Rice, as in this case, the court gave “no indication as to its view on the merits of the case prior to the government seeking dismissal.” Id. at 1028. The Circuit distinguished the order of dismissal from a consent decree, finding that while a consent decree “carr[ies] sufficient ‘judicial imprimatur’ to materially change the legal relationship of the parties,” the defendant had already “substantially” and “voluntarily” afforded the plaintiff its requested relief by the time the order of dismissal was filed. Id. at 1026-27. Likewise, in this case, the government had already provided the relief AGS sought before the parties agreed to dismiss this case.

AGS argues that it should be considered a prevailing party because, as a result of this lawsuit, AGS was no longer excluded from bidding on the contract. AGS acknowledges that there has been no ruling on the merits, but nevertheless argues that EAJA fees are appropriate “under the unique facts of this case.” Pl.’s Mot. 4. AGS describes what it characterizes as the government’s bad faith treatment of AGS, including misrepresentations in the GAO and its disparate treatment of AGS during the bidding process. Id. at 5-6. However, even assuming that all of AGS’s allegations are true, AGS does not cite, and the court is not aware of, any case law supporting AGS’s position that the catalyst theory applies to cases in which the government exhibits bad faith.

Plaintiff’s claim for attorneys’ fees and costs case presents precisely the set of facts that typify the “catalyst theory,” which both the Supreme Court and the Federal Circuit have rejected. The case law is clear that “‘[a] defendant’s voluntary change in conduct, although perhaps accomplishing what the plaintiff sought to achieve by the lawsuit,’ cannot confer prevailing party status on a plaintiff.” Brown, 591 F. App’x at 944 (quoting Buckhannon, 532 U.S. at 605). In this case, there has been no enforceable judicial ruling on the merits and thus AGS is not a prevailing party.  (Advanced Government Solutions, Inc. v. U. S., No. 14-855C, October 19, 2015)  (pdf)


Eligibility for an [Equal Access to Justice Act] EAJA Award To receive an award of attorneys’ fees and expenses under EAJA, five conditions must be met: (1) the fee application must be submitted within 30 days of final judgment in the action and be supported by an itemized statement; (2) at the time the civil action was initiated, the applicant, if a corporation, must not have been valued at more than $7,000,000 in net worth or employed more than 500 employees; (3) the applicant must have been the “prevailing party” in a civil action brought by or against the United States; (4) the Government’s position must not have been “substantially justified;” and (5) there cannot exist any special circumstances that would make an award unjust. 28 U.S.C. § 2412(d)(1)(A), (B); see also Comm’r, Immigration & Naturalization Serv. v. Jean, 496 U.S. 154, 158 (1990); United Partition Sys., Inc. v. United States, 95 Fed. Cl. 42, 49 (2010); ACE Constructors, Inc. v. United States, 81 Fed. Cl. 161, 164 (2008).

(sections deleted)

4. Government’s Position Was Not Substantially Justified

Where, as here, the Government loses its case on the merits, it bears the burden of showing that its position was “substantially justified.” See, e.g., White v. Nicholson, 412 F.3d 1314, 1315 (Fed. Cir. 2005); Dalles Irrigation Dist. v. United States, 91 Fed. Cl. 689, 702-03 (2010) (finding that the Government’s position was not substantially justified where government conduct directly contravened the parties’ contract); see also Doty v. United States, 71 F.3d 384, 385 (Fed. Cir. 1995). The government’s “position” that must be substantially justified encompasses the entirety of its conduct, including both agencylevel action and the litigation. Doty, 71 F.3d at 386; Standard Commc’ns, Inc. v. United States, 106 Fed. Cl. 165, 172 (2012). Defendant contends that, even though it lost the protest on the merits, its litigation position was substantially justified. This is the one area of the five EAJA conditions where Defendant opposes WHR’s application for fees and expenses.

The FBI’s plan to implement corrective action took a wrong turn when the agency decided to award a fourth contract to Brookfield to resolve Brookfield’s GAO protest, notwithstanding that Brookfield was only the sixth-priced offeror in line for award. Thus, in settling with Brookfield, the FBI planned to leave the three lowest-priced contracts in place, pass over the fourth- and fifth-priced offerors, and award an additional contract to Brookfield. Even though the fourth- and fifth-priced offerors were not then involved in Brookfield’s GAO protest, it was naïve for the FBI to think that these passed-over offerors would not complain about the FBI’s apparent favoritism toward Brookfield. Indeed, in addition to awarding a fourth contract to Brookfield, the FBI executed the aforementioned settlement agreement with Brookfield specifically anticipating that these passed-over offerors might file a new protest at the GAO or the Court of Federal Claims. The June 7, 2013 settlement agreement provided in part:

(c) If a protest is filed by a disappointed bidder, Brookfield will file a request for summary dismissal (at GAO) or move to dismiss (at the U.S. Court of Federal Claims);

(d) If the circumstances under Paragraph (c) occur, the FBI will join Brookfield’s request or motion and/or file its own;

(e) If the dismissal is denied, FBI Contracting Officer . . . .  . . . . . . represents that her/the FBI’s present intent is to take corrective action by amending the RFQ to eliminate the financial capability requirement and the corresponding documentation requirement and to allow revised submissions by all offerors, including revised pricing.

Administrative Record (“AR”) 1813 (emphasis added).

As the events played out, two passed-over offerors, CapRelo and TRC, did file new bid protests at the GAO aimed only at challenging the fourth contract award to Brookfield. As planned in the settlement agreement provisions quoted above, the FBI and Brookfield filed motions for summary dismissal at the GAO. AR 2031-33, 2034-43, 2051-53; WHR Group, 115 Fed. Cl. at 392. The GAO dismissed TRC’s protest because TRC was the seventh offeror in line for award, and was not an interested party. AR 2065-66. However, the GAO declined to dismiss CapRelo’s protest because, as the fourth-lowest offeror, CapRelo was an interested party to challenge the Brookfield award. AR 2049.

At this point, pursuant to paragraph (e) of the settlement agreement with Brookfield, the FBI announced on July 12, 2013 that it would take new “corrective action” to resolve the CapRelo protest. In transmittals to the four BPA awardees, the contracting officer stated that each of the BPAs would be canceled, and the FBI would start over with a new solicitation. AR 2068-69. There was no rational reason to disturb the three awards to Allegiance, Lexicon, or WHR, because the FBI’s needs for the relocation services still existed, and CapRelo had not even challenged these three awards in its bid protest. The cancellation of all the BPAs went far beyond the permissible corrective action under the law.

An agency’s corrective action must be rationally related to some procurement defect. Sys. Application & Technologies, Inc. v. United States, 100 Fed. Cl. 687, 720-21 (2011); Sheridan Corp. v. United States, 94 Fed. Cl. 663, 669-70 (2010). Here, the Court cannot see a rational reason for any of the FBI’s actions in making an award to Brookfield, or in later wanting to cancel all four BPA’s to resolve CapRelo’s protest. As noted, CapRelo did not even challenge the awards to Allegiance, Lexicon, or WHR. The fact that the FBI had laid out such a plan in its settlement agreement with Brookfield does not legitimize the Allegiance, Lexicon, and WHR cancellations. It is settled law in GAO bid protests that “[t]he existence of a settlement agreement does not permit the contracting agency to act in ways not otherwise permitted by applicable statutes and regulations.” Earth Property Servs., Inc., B-237742, 90-1 CPD ¶ 273 at *4 (Comp. Gen. Mar. 14, 1990), aff’d B-237742.2, 90-1 CPD ¶ 546 (Comp. Gen. June 11, 1990); see also Coulson Aviation (USA), Inc. et al., B-409356.2 et al., 2014 CPD ¶ 106 at *17 (Comp. Gen. Mar. 31, 2014). 

The record reflects that Brookfield was able to negotiate a favorable deal with the FBI in which it would either receive a fourth contract award as the sixth-priced offeror, or it would at least obtain an opportunity to rebid the procurement at the expense of the three unchallenged awardees, Allegiance, Lexicon, and WHR. The fact that the FBI agreed in the settlement to make some changes to the solicitation only if further bid protests were not summarily dismissed shows that the changes were just “window dressing” to make the cancellations of the three unchallenged contracts seem legitimate. Indeed, accepting that the FBI wanted to resolve the original Brookfield bid protest, it could have done so just by awarding a fourth contract to Brookfield without the need for any settlement agreement. The chances of the passed-over offerors filing further bid protests were so high that Brookfield’s fall-back position was to at least insure a rebid to be able to compete again. The settlement agreement in itself amounted to impermissible favoritism of a single offeror that was not even in line for award.

In a rebid scenario, Allegiance, Lexicon, and WHR would be prejudiced by having to compete again for contracts they had already won in a fair competition, but now with their prices disclosed. WHR Group, 115 Fed. Cl. at 403-04; Sheridan, 94 Fed. Cl. at 669- 70. In such a setting, these three winning offerors likely would have to “bid against themselves” by lowering their prices to keep the contracts they had previously won. The FBI’s settlement with Brookfield truly was a “sweetheart deal” that would direct an undeserved contract to it, or at least allow Brookfield a do-over to the extreme prejudice of Allegiance, Lexicon, and WHR. Although an agency has wide discretion to implement corrective action, there is no law, regulation, or case precedent that would allow an agency to venture far beyond the limits of permissible corrective action and to cancel contracts that were not even challenged in a bid protest. 

Judge Block concluded his opinion on the merits of WHR’s protest with the following observation:

It is also worth adding as a final point that if the FBI’s “corrective action” in this case were not enjoined, it would signify that the government’s power to take “corrective action” is nigh unlimited. The requirement that corrective action be “targeted” or “rationally related” to an existing defect in the initial procurement is essential to the integrity of the procurement system. In this case it is clear that the “corrective action” was not targeted or rationally related to any actual defect and it is therefore crucial to the public interest that the FBI’s “corrective action” be enjoined.

WHR Group, 115 Fed. Cl. at 405. The Government has fallen well short of its burden of proof, and has not offered any convincing arguments to show that its position was substantially justified. 

(sections deleted)

Conclusion

Based upon the foregoing, the Court awards EAJA attorneys’ fees and expenses to WHR in the amount of $110,657.59. The clerk is directed to enter judgment in WHR’s favor in this amount.  (WHR Group, Inc. v. U. S., No. 13-515C, June 29, 2015)  (pdf)


When McTECH filed its pre-award protest on February 22, 2012, this court acquired subject matter jurisdiction over this action under the first prong of 28 U.S.C. § 1491(b)(1), which grants this court “jurisdiction to render judgment on an action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract.” See Asia Pac. Airlines v. United States, 68 Fed. Cl. 8 (2005) (upholding jurisdiction over a pre-award protest of an agency decision to disqualify an offeror), appeals dismissed, 171 Fed. Appx. 837 (Fed. Cir. 2006), 175 Fed. Appx. 346 (Fed. Cir. 2006). With the Corps’ post-complaint decision to reinstate McTECH in the procurement, however, the government has challenged the court’s continuing jurisdiction, contending that “McTECH is on equal footing with all other offerors . . . and can no longer claim to be an interested party with standing to seek to enjoin the agency’s official role in conducting th[e] solicitation.” Def.’s Reply to Pl.’s Resp. to Def.’s Mot. to Dismiss (“Def.’s Reply”) at 2, June 12, 2012, ECF No. 47. In essence, although the government refers to a lack of standing, it claims that McTECH’s pre-award protest has become moot.

The salient question is whether the Corps’ corrective action has “completely and irrevocably eradicated the effects of the alleged violation.” Chapman Law Firm, 490 F.3d at 940 (quoting County of Los Angeles v. Davis, 440 U.S. 625, 631 (1979)). On the one hand, “a case will not be rendered moot by subsequent acts if some of the requested relief remains available.” BLR Grp. of Am., Inc. v. United States, 94 Fed. Cl. 354, 362 (2010) (quoting Intrepid v. Pollock, 907 F.2d 1125, 1131 (Fed. Cir. 1990), and citing Church of Scientology of Cal. v. United States, 506 U.S. 9, 12 (1992)), appeal dismissed, 460 Fed. Appx. 918 (Fed. Cir. 2011). On the other hand, where a defendant’s actions have eliminated the possibility of meaningful relief, the case ordinarily should be dismissed as moot. See Deakins v. Monaghan, 484 U.S. 193, 200-01 & n.4 (1988).

The supplemental complaint by McTECH poses two main objections to the Corps’ corrective action. First, in the amended complaint, McTECH avers that the corrective action will be implemented by a source selection team in the Corps’ Fort Worth District Office “that ha[s] demonstrated an unwillingness, inability, lack of interest, or lack of competence to properly develop and reasonably implement an OCI inquiry that comports with the rules governing OCI analyses,” namely 48 C.F.R. Subpart 9.5, particularly Section 9.504. Am. Compl. ¶ 120. Second, McTECH alleges that the Corps’ “corrective action plan is not reasonably broad enough in scope,” Am. Compl. ¶ 119, principally because it focuses only on relationships of offerors with BrooAlexa Design J.V. and BrooAlexa LLC, even though at least six other vendors either contributed to the design or provided the Corps with a projected cost estimation for the construction of the designed buildings, see Pl.’s Reply to Def.’s Opp’n to Mot. for Leave to Amend (“Pl.’s Reply”) at 3, June 4, 2012, ECF No. 44 (identifying six engineering and consulting firms, besides BrooAlexa Design J.V., that were listed on the project drawings).

McTECH’s first objection has been ameliorated by a step taken by the Corps approximately a month after the corrective action reinstating McTECH. On May 31, 2012, the Corps issued Amendment 9 to the Solicitation, assigning a new Contracting Officer and Contract Specialist. See Am. Compl. Attach. 10 (Amendment 0009 to Solicitation (May 31, 2012)). McTECH nonetheless complains that the new procurement team works in the same office as the prior source selection officials and may consult with the prior officials in making procurement decisions. Pl.’s Reply at 3. These adjusted and elaborated claims by McTECH about the new source selection officials, however, are too attenuated and speculative to serve as a continuing basis for equitable relief. Functionally, the Corps has replaced the originally assigned procurement officials, just as McTECH sought in its prayer for relief of the amended complaint.

McTECH’s second ground for contesting the Corps’ corrective action has a firmer foundation, however. To date, the only questions about actual or potential OCIs posed by the Corps relate to any relationships that may exist between and among offerors and BrooAlexa Design J.V. and BrooAlexa LLC. See Am. Compl. Attach. 9 (Mem. from Linda Eadie to Prospective Offerors (May 4, 2012)). The Corps appears to have made no inquiries about relationships between and among offerors and the other engineering and consulting firms that worked with BrooAlexa Design J.V. on the design for the buildings to be constructed.

The government’s position also suffers from a legal flaw. It represents that McTECH is now on an “equal footing with all other offerors” and that it “can no longer claim to be an interested party with standing to seek to enjoin the [Corps’] official role in conducting this solicitation.” Def.’s Reply at 2. This argument, however, conflates the concepts of mootness and standing. As the Supreme Court explained in Laidlaw Environmental, 528 U.S. at 189-90, mootness and standing have different procedural connotations. A plaintiff has the burden to show standing, but “a defendant claiming that its voluntary compliance moots a case bears the formidable burden of showing that it is absolutely clear the allegedly wrongful behavior could not reasonably be expected to recur.” Id. at 190 (citing Concentrated Phosphate Export Ass’n, 393 U.S. at 203). The Supreme Court noted that “there are circumstances in which the prospect that a defendant will engage in (or resume) harmful conduct may be too speculative to support standing, but not too speculative to overcome mootness.” Id. Whether or not this is such a case insofar as standing is concerned, the government assuredly has not shown that McTECH’s claims of unreasonableness of the Corps’ corrective action are moot.

In addition, McTECH’s objections to the scope of the Corps’ corrective action plan and process for addressing OCIs arguably have to be brought at this pre-award stage of the procurement. Otherwise, McTECH might well risk having its objection foreclosed by application of the waiver rule enunciated in Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308 (Fed. Cir. 2007). As Judge Allegra observed in CRAssociates, Inc. v. United States, 102 Fed. Cl. 698, 712 (2011), appeal pending, No. 2012-5037 (Fed. Cir.), “the rationale of Blue and Gold leads to the conclusion that a contractor should not be allowed to protest an agency’s failure to identify and mitigate an OCI when the contractor knew about the alleged OCI from the start, but failed to assert it, via protest, prior to the award.”

In sum, the court has juridical power to entertain a complaint challenging proposed corrective action, see Wildflower Int’l, Ltd. v. United States, __ Fed. Cl. __, __, 2012 WL 2044784, at *19 (2012); CBY Design Builders v. United States, __ Fed. Cl. __, __, 2012 WL 1889299, at *28 (2012); Jacobs Tech. Inc. v. United States, 100 Fed. Cl. 173, 176-77 (2011); Sheridan Corp. v. United States, 95 Fed. Cl. 141, 150 (2010), appeal dismissed, 453 Fed. Appx. 973 (Fed. Cir. 2011); Ceres Gulf, Inc. v. United States, 94 Fed. Cl. 303, 316 (2010), and McTECH has stated a potentially viable challenge to the scope of the Corps’ corrective action in the amended complaint.

CONCLUSION

The government’s motion to dismiss McTECH’s amended complaint on mootness grounds is DENIED.  (McTECH Corporation v. U. S., No. 12-122C, July 16, 2012)  (pdf)

U. S. Court of Federal Claims - Listing of Decisions
For the Government For the Protester
Advanced Government Solutions, Inc. v. U. S., No. 14-855C, October 19, 2015  (pdf) New Starry Associates, Inc. v. U. S., No. 16-44C April 10, 2017
  WHR Group, Inc. v. U. S., No. 13-515C, June 29, 2015  (pdf)
  McTECH Corporation v. U. S., No. 12-122C, July 16, 2012  (pdf)

U. S. Court of Appeals for the Federal Circuit - Key Excerpts

New II. The Court of Federal Claims Improperly Awarded Attorney Fees and Costs to Dellew Under the EAJA

A. Legal Framework

“In the United States, parties are ordinarily required to bear their own attorney[] fees—the prevailing party is not entitled to collect from the loser.” Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598, 602 (2001). Described as the “American Rule,” that practice proscribes an award of attorney fees unless otherwise provided by statute. Id. Absent a waiver of sovereign immunity, a party may not recover attorney fees in suits against the Government. See Chiu v. United States, 948 F.2d 711, 714 (Fed. Cir. 1991).

The EAJA waives the sovereign immunity of the United States to enable certain parties to seek attorney fees and costs against the Government under certain circumstances. See Fidelity Constr. Co. v. United States, 700 F.2d 1379, 1385–86 (Fed. Cir. 1983). The EAJA provides that

a court shall award to a prevailing party other than the United States fees and other expenses . . . incurred by that party in any civil action . . . brought by or against the United States . . . unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

28 U.S.C. § 2412(d)(1)(A) (emphasis added). The appeal hinges on whether Dellew meets the definition of “prevailing party” under the EAJA.

Neither a statute nor a regulation defines “prevailing party” for EAJA purposes. However, the Supreme Court has held that “prevailing party,” as used in other statutes, means a party that obtains a “material alteration of the legal relationship of the parties.” Buckhannon, 532 U.S. at 604 (internal quotation marks and citation omitted).

The Supreme Court also explained that the change in the parties’ legal relationship must have a certain “judicial imprimatur,” id. at 605, such as an “enforceable judgment[] on the merits” or a “court-ordered consent decree[],” id. at 604 (citation omitted). It further held that a prevailing party does not include a party who obtained relief through “a defendant’s voluntary change in conduct.” Id. at 605. We extended these principles to the EAJA, see Brickwood Contractors, Inc. v. United States, 288 F.3d 1371, 1377–79 (Fed. Cir. 2002), and later explained that the Buckhannon “threshold can also be met by other court action ‘equivalent’ to a judgment on the merits or a court-ordered consent decree,” as long as “it carries sufficient judicial imprimatur to materially change the legal relationship of the parties,” Rice, 405 F.3d at 1026.

B. Dellew Is Not a Prevailing Party Under the EAJA

The Government contends that the Court of Federal Claims committed three errors in determining that Dellew qualifies as a prevailing party under the EAJA. See Appellant’s Br. 16–29. We agree with each of the Government’s arguments and address them in turn.

1. The Government Voluntarily Took Corrective Action

The first argument concerns the nature of the Government’s corrective action. The Court of Federal Claims held that “the Army did not voluntarily decide to take corrective action” because “[i]t only did so following . . . the [G]overnment’s realization that the court was not swayed by its argument” and otherwise “understood how the court intended to rule.” Dellew II, 127 Fed. Cl. at 94, 95. The Government argues that, “[b]ecause the Army acted without any corresponding court order requiring such action,” the Army voluntarily took corrective action such that the Court of Federal Claims could not have made the requisite change in the legal relationship between the parties. Appellant’s Br. 17; see id. at 17–19.

Precedent firmly weighs in the Government’s favor. It is undisputed here that the Government took corrective action before the Court of Federal Claims issued a written or oral ruling on the merits. See Dellew II, 127 Fed. Cl. at 92 (“In the case at bar, the court did not issue a written opinion on the merits. Nor did the court issue a consent decree based on an agreement between the parties. The court did, however, make numerous substantive comments during oral argument regarding the merits of the case and how it intended to rule . . . .” (emphases added)). Irrespective of the Court of Federal Claims’s expectations about a future ruling or its impressions as to the Government’s motivation for taking the corrective action, an agency acts voluntarily if it takes corrective action before the Court of Federal Claims provides a written or oral ruling on the merits that changes the parties’ legal relationship. See Rice, 405 F.3d at 1027 (explaining that an agency acts “voluntarily” if it undertakes “remedial action before any rulings by the Court of Federal Claims”). Voluntary action cannot provide a sufficient basis for a court to confer prevailing status on a party. See Buckhannon, 532 U.S. at 605 (“A defendant’s voluntary change in conduct, although perhaps accomplishing what the plaintiff sought to achieve by the lawsuit, lacks the necessary judicial imprimatur on the change.”). To hold otherwise would reanimate the catalyst theory that the Supreme Court rejected in Buckhannon. See id. at 601, 605 (explaining that the “catalyst theory . . . posits that a plaintiff is a ‘prevailing party’ if it achieves the desired result because the lawsuit brought about a voluntary change in the defendant’s conduct” and rejecting that theory as inconsistent with precedent).

2. The Court of Federal Claims’s Comments Lacked Sufficient Judicial Imprimatur to Materially Change the Legal Relationship of the Parties

The second argument concerns the substance of the comments that the Court of Federal Claims made during the hearing. Because it stated its intent “to rule in Dellew’s favor” and emphasized that “the Army should take corrective action,” the Court of Federal Claims determined that its comments carried a sufficient judicial imprimatur to change the parties’ legal relationship. Dellew II, 127 Fed. Cl. at 92, 93; see id. at 92–94. The Government argues that the Court of Federal Claims’s comments did not carry a sufficient judicial imprimatur to materially change the legal relationship of the parties because they did not constitute “court-ordered relief.” Appellant’s Br. 19 (capitalization omitted); see id. at 19– 22. Without the requisite imprimatur, the Government alleges that Dellew does not constitute a prevailing party under the EAJA. See id. at 19–22.

Our decision in Brickwood firmly resolves this aspect of the prevailing party question. There, we determined that comments about the merits made by the Court of Federal Claims during a hearing did not constitute sufficient grounds upon which to confer prevailing party status pursuant to the EAJA. See 288 F.3d at 1380–81. Absent an “oral judgment,” id. at 1381, we held that “the cited comments are clearly not sufficient to establish a judicial imprimatur and they do not constitute a ‘courtordered change in the legal relationship’ of the parties as Buckhannon requires,” id. at 1380. Here, the Court of Federal Claims at most described how it “intended” to rule. Dellew II, 127 Fed. Cl. at 92. Indeed, the Court of Federal Claims encouraged, but did not require, the Army to take particular action. See, e.g., J.A. 126 (“I also would strongly suggest to the Army that they think about taking corrective action . . . .”); see also J.A. 145, 147 (using “if” and “when” to describe the scope of any potential Army corrective action). Moreover, the Court of Federal Claims offered the Government an opportunity for further briefing, leaving open how the case would proceed, and it explicitly postponed a ruling pending receipt of the Joint Status Report. See, e.g., J.A. 68–69, 150, 153. The Court of Federal Claims’s comments as a whole demonstrate that it did not require the Government to act in any manner; instead, it offered the Government an opportunity to take whatever corrective action it believed might be appropriate. Without more, the Court of Federal Claims’s comments did not carry a sufficient judicial imprimatur to change the legal relationship between the parties.

Apart from conflicting with precedent, the Court of Federal Claims adopted an unworkable standard that equates a non-binding oral comment with a ruling. The Court of Federal Claims knows how to rule orally when the circumstances so require. See, e.g., Orion Tech., Inc. v. United States, 101 Fed. Cl. 492, 493 (2011) (stating that its decision “explains in more detail the oral rulings made by the court” in a prior hearing). In the absence of an oral ruling, experience teaches us that comments made from the bench do not always match the content of a later written opinion. For that reason, unless the issue on appeal concerns an oral ruling, we generally “rely on the court’s written opinion rather than its oral statement during a hearing.” Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324, 1331 (Fed. Cir. 2004). To hold otherwise would require parties to divine the presiding court’s actual holding from the often messy entrails of spontaneous comments. That kind of divination has no support in a legal system which values predictability as a pillar of the rule of law.

3. The Court of Federal Claims Failed to Follow Relevant Precedent

The final argument concerns the legal authority relied upon by the Court of Federal Claims. Throughout its decision, the Court of Federal Claims relied substantially upon its decision in Universal Fidelity LP v. United States, 70 Fed. Cl. 310 (2006). See Dellew II, 127 Fed. Cl. at 91–92, 94–95. In Universal Fidelity, the Court of Federal Claims held that a preliminary order intending to enjoin a solicitation carried a sufficient judicial imprimatur to materially change the parties’ legal relationship and, thus, to confer prevailing party status on the plaintiff. See 70 Fed. Cl. at 314–16. The Government avers that the Court of Federal Claims improperly relied upon Universal Fidelity and failed to follow our binding precedent. See Appellant’s Br. 22–26.

The Court of Federal Claims erred in relying upon Universal Fidelity for two reasons. First, the Court of Federal Claims gave greater weight to Universal Fidelity than Buckhannon, Rice, and Brickwood. See Dellew II, 127 Fed. Cl. at 94–95 (“[T]he court concludes that there is good cause to extend the holding in Universal Fidelity [], which dealt with a written order, to the oral comments made in this case. In both cases: (1) the matter was fully briefed at the time the statements were made, (2) the court arrived at legal conclusions after considering the merits of the parties’ positions, (3) the parties were made aware of those legal conclusions, and (4) defendant took corrective action after having been made aware of the court’s position.”). We reaffirm a well-known principle that the Court of Federal Claims failed to follow here: the Court of Federal Claims must follow relevant decisions of the Supreme Court and the Federal Circuit, not the other way around. See Coltec Indus., Inc. v. United States, 454 F.3d 1340, 1353 (Fed. Cir. 2006) (“There can be no question that the Court of Federal Claims is required to follow the precedent of the Supreme Court, our court, and our predecessor court, the Court of Claims.” (citation omitted)). Second, even if it had the same authoritative weight as decisions of superior courts, Universal Fidelity is distinguishable. Unlike here, the Court of Federal Claims in Universal Fidelity reduced its views of the merits to an order. See 70 Fed. Cl. at 311. For these reasons, the Court of Federal Claims improperly relied upon Universal Fidelity to find that Dellew qualified as a prevailing party under the EAJA.

CONCLUSION

We have considered the parties’ remaining arguments and find them unpersuasive. Accordingly, the Opinion and Order of the U.S. Court of Federal Claims awarding attorney fees and costs to Dellew under the EAJA is REVERSED. (Dellew Corporation v. U. S. and Tech Systems, Inc., No. 2016-2304, May 1, 2017.)

U. S. Court of Appeals for the Federal Circuit - Listing of Decisions
For the Government For the Protester
New Dellew Corporation v. U. S. and Tech Systems, Inc., No. 2016-2304, May 1, 2017  
   
Legal

Protests

Bona Fide Needs Rule
Public Laws
Legislation
Courts & Boards


Rules & Tools
Workforce
Reading

Small Business
 

   
 
 

ABOUT  l CONTACT