BNUMBER:  B-256813.6
DATE:  October 29, 1996
TITLE:  Test Systems Associates, Inc.--Claim for Costs

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Matter of:Test Systems Associates, Inc.--Claim for Costs

File:     B-256813.6

Date:October 29, 1996

Joseph G. Lee, Esq., Carpenter, Bennett & Morrissey, for the 
protester.
Karen Gearreald, Esq., Department of the Navy, for the agency.
Andrew T. Pogany, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Claim for costs of reasonable attorneys' fees for filing and 
pursuing a successful protest is allowed for portion of fees related 
to prosecution of the bid protest at the General Accounting Office; 
fees related to other forums are not recoverable.

2.  Costs for attorneys fees incurred for defending against Freedom of 
Information Act (FOIA) request by a competitor to the contracting 
agency for protester's proprietary information are not recoverable as 
costs of filing and pursuing successful bid protest where they are not 
related to prosecution of the protest.

3.  Protester forfeited its right to recover the costs of corporate 
labor allegedly incurred as a result of filing and pursuing its 
protest at the General Accounting Office where the protester failed to 
file a proper claim concerning its corporate labor costs with the 
contracting agency detailing and certifying the time expended and 
costs incurred in connection with the protest within 60 days after 
receipt of the decision sustaining its protest.

DECISION

Test Systems Associates, Inc. (TSAI) requests that our Office 
determine the amount it is entitled to recover from the Department of 
the Navy for the costs of filing and pursuing its bid protest which we 
sustained in our decision Test Sys. Assocs., Inc., B-256813.5, Oct. 
14, 1994, 94-2 CPD  para.  153.  TSAI has filed initial and supplemental 
claims for a total of $143,728; the agency has offered to pay the firm 
$19,971.  We determine that TSAI is entitled to recover $9,762.

FACTUAL AND PROCEDURAL BACKGROUND

On October 27, 1993, the agency issued request for proposals (RFP) No. 
N00189-93-R-0378, a total small business set-aside, for operational 
test program sets (automatic test equipment) for Navy aircraft.  After 
receipt of initial proposals, discussions, and receipt of best and 
final offers (BAFO), the Navy awarded the contract to TSAI on March 
15, 1994 as the "greatest value" offeror.[1]  On March 23, Dixon filed 
a protest with our Office against the award.  On April 4, Dixon also 
filed suit in the U.S. District Court for the District of Columbia 
requesting declaratory and injunctive relief.  Basically, Dixon 
alleged that TSAI was ineligible for award because the firm had 
checked the box in the RFP's Small Business Concern Representation 
(SBCR) clause that "not all supplies" would be manufactured or 
produced by a small business concern.  On April 22, the Navy, on its 
own initiative, took "corrective action" and terminated TSAI's 
contract for the convenience of the government because of TSAI's 
miscertification in the SBCR clause; the agency notified TSAI of its 
intention to award the contract to Dixon on April 26.  On April 29, 
TSAI filed its first protest (B-256813.3) with our Office alleging 
that the SBCR clause was fatally ambiguous and did not provide the 
agency with a basis for terminating its contract and rejecting its 
offer.  In the meantime, Dixon chose not to withdraw the civil action 
in the U.S. District Court; TSAI, despite being advised by our Office 
to consider doing so, did not intervene in Dixon's court suit.

On June 3, our Office, after again notifying TSAI's counsel concerning 
the pendency of the District Court suit, dismissed TSAI's protest 
because the dispositive issue--which firm was entitled to award--was 
before the District Court, which had not requested an advisory opinion 
from our Office.  On June 6, the contracting officer awarded the 
contract to Dixon.  On June 16, TSAI filed suit in the same District 
Court which then had before it both suits concerning entitlement to 
award under the same procurement.  On that same day, TSAI again filed 
a protest with our Office (B-256813.5--the basis for the present 
claim) in which it again contended that the Navy's SBCR clause was 
fatally defective and had misled the firm into miscertifying its 
intention of furnishing items manufactured by small business.  The 
Navy issued a stop-work order to Dixon, and the District Court then 
requested our Office to furnish an advisory opinion on the matter.

By decision of October 14, 1994, our Office sustained TSAI's protest 
because we found that the Navy had used an outdated and defective SBCR 
clause which had been in general use prior to 1985, and which our 
Office had previously found  ambiguous.  See Mountaineer Leathers, 
Inc., B-218453, May 6, 1985, 85-1 CPD  para.  505.  In response to our 
decision, Federal Acquisition Circular 84-16, May 30, 1986, clarified 
the SBCR clause to provide that the representation of the SBCR 
regarding the source of manufactured supplies referred to "end items" 
being acquired rather than the materials and supplies that became part 
of the end item--as TSAI had been misled to believe.  Because the 
protest record contained allegations by Dixon and the agency that TSAI 
had proposed excessive large business effort in its technical 
proposal, we recommended in our decision that the agency refer the 
issue of TSAI's size status (including its technical proposal) to the 
SBA for a definitive determination of whether TSAI was legitimately a 
small business concern.  We also recommended that following this 
determination by the SBA, the agency proceed with the award consistent 
with SBA's determination and award the contract to TSAI if it were 
found to be small.  We also determined the firm to be entitled to the 
costs of filing and pursuing its protest, including reasonable 
attorneys' fees.  See 4 C.F.R.  sec.  21.6(d)(1) (1995).

The contracting officer then referred the question of TSAI's size 
status to the SBA regional office.  By decision dated December 14, 
1994, the regional office determined that TSAI was a small business.  
Dixon appealed this determination to the SBA's Office of Hearings and 
Appeals (OHA).  While the appeal was pending, the agency terminated 
Dixon's contract for the convenience of the government on January 17, 
1995.  By decision dated June 6, 1995, OHA denied Dixon's appeal and 
upheld the small business status of TSAI.  On June 16, the District 
Court dismissed both suits as "moot" because both awards had been 
terminated and an award to TSAI had not yet been made.  The contract 
was ultimately awarded to TSAI in December 1995, and the firm is 
currently performing the contract.

In the meantime, TSAI filed its first claim for costs with the agency 
on December 1, 1994, and its supplemental claim by letters dated April 
11 and 21, 1995.  Subsequent negotiations to settle the matter were 
unsuccessful.  TSAI, without the benefit of counsel, filed its first 
claim for costs with our Office on June 21, 1995.  We requested a 
report from the agency, which was received on September 5.  TSAI filed 
a supplemental claim with our Office on October 11, 1995, and its 
attorneys filed comments on the agency report during that same month.  
TSAI's claims consist almost entirely of a listing of hours and rates 
for attorneys and costs incurred by corporate personnel for various 
time and effort allegedly expended in this matter and for which TSAI 
claims reimbursement of costs.

ATTORNEYS' FEES

TSAI included claims for attorneys' fees for the period of April 1, 
1994 to  September 30, 1995, a period encompassing the Dixon protest, 
the Dixon court suit, the TSAI court suit, the bid protest, a Freedom 
of Information Act (FOIA) matter, the SBA proceedings both at the 
regional office and at OHA, preparation of the claim for costs and 
other matters.  The hours of services billed are listed by the 
attorneys together with a brief explanation of the subject matter.  
Since our review shows that these legal services performed can easily 
be categorized and grouped, we will first make a determination of the 
allowability of each category of services and then determine the costs 
that are allowable and payable.

District Court Litigation

The claim consists in large part of billable hours charged by the 
attorneys in defending against Dixon's suit and prosecuting TSAI's own 
suit.  We give three examples of the attorneys' summaries:

June 9, 1994 "Draft and revise Complaint and Memorandum in support of 
request for temporary restraining order and preliminary injunction and 
supporting papers; research case law on irreparable harm and 
injunctions issued for procurement regulation violations as here."  [5 
hours]

June 20, 1994 "Travel to Washington for hearing before Court on TRO 
application; attend hearing on TRO application; telephone conference 
[and] further review of motion papers, complaint and file materials on 
TRO application."  [8 hours]

June 24, 1994 "Telephone conference with U.S. Attorney's office, F. 
Haynes, regarding court's order on TRO application and other relief; 
review court's order; telephone conference with TSAI, A. Affa, 
regarding same."  [.50 hours]

The agency disallowed all hours pertaining to the court litigation 
because our Office's authority to order reimbursement of costs is 
limited to costs of pursuing a bid protest, and does not extend to the 
costs of court litigation.  We agree.  Costs incurred in seeking 
relief from another forum are not reimbursable as protest costs under 
the Competition in Contracting Act of 1984 (CICA), which limits our 
bid protest jurisdiction, as well as our corresponding authority to 
recommend the payment of costs, to protests filed with our Office.  31 
U.S.C.  sec.  3554(c)(1)(A) (1988); Diverco, Inc.--Claim for Costs, 
B-240639.5, May 21, 1992, 92-1 CPD  para.  460.  We therefore  disallow 
these costs.[2]

FOIA Costs

Dixon filed a FOIA request on May 3, 1994 to the Navy to obtain the 
statement and table of corporate experience which TSAI had submitted 
as part of its technical proposal.  TSAI vigorously opposed this 
request and the controversy continued for  3 months, independent of 
protest filings.  The matter subsequently became moot in August when 
TSAI's technical proposal was released to Dixon's counsel under a 
protective order issued by our Office.  As the agency states, this 
FOIA request was made 6 weeks before TSAI filed its protest 
(B-256813.5).  We see no connection between defending against a FOIA 
request from a competitor and the subsequent General Accounting Office 
proceedings.  In short, defending against Dixon's FOIA request was not 
necessary or reasonably incurred for the filing and pursuit of the 
protest.  See Tripp, Scott, Conklin & Smith--Claim for Costs, 72 Comp. 
Gen. 232 (1993), 93-1 CPD  para.  414.  This claim is denied in its 
entirety.  

Claimed Reimbursement for Earlier Protests

TSAI seeks reimbursement for its attorneys' fees incurred in 
connection with its protest that was dismissed and the earlier Dixon 
protests.  The short answer is that our Office sustained the bid 
protest filed by TSAI and docketed as B-256813.5 and the firm is 
entitled to be reimbursed for the cost of filing and pursuing this 
protest only--not for the costs incurred in connection with previously 
dismissed protests.  We therefore find no merit to this claim for 
costs.[3]

Calculation of Costs Allowable for Attorneys' Fees

The agency has identified, listed, and provided to TSAI all directly 
allocable hours that the agency determined were spent in connection 
with TSAI's successful bid protest.  The agency then applied the 
hourly rate claimed by the partner ($190) and the associate ($145) and 
arrived at a total of $10,544.50.  TSAI has not rebutted these 
specific findings of allocable hours.  Instead, in its comments, 
counsel for TSAI continues to argue that its claims for court 
litigation costs, costs for previously filed protests, and 
FOIA-related costs should be allowed. Based on this record, we see no 
persuasive reason to disturb the agency's basic determination that 
TSAI is only entitled to be reimbursed for attorneys' fees in the 
amount of $10,544.50.  However, we do make a minor adjustment to the 
agency's determination.  The record shows that these costs allowed by 
the agency include 5.5 hours of attorneys' time (totaling $782.50) for 
the costs of preparing and pursuing TSAI's claim with the agency after 
our decision was issued.  Under our Regulations, where a protester and 
a contracting agency cannot reach agreement concerning a claim for 
costs, our Office may determine the amount and declare the protester 
to be entitled to the costs of pursuing the claim for costs before our 
Office.  See 4 C.F.R.  sec.  21.6(f)(2) (1995).  We have no authority to 
recommend recovery of expenses incurred for pursuing the claim for 
costs at the agency level.[4]  After disallowing these costs, we 
determine that TSAI is entitled to be reimbursed for $9,762 for 
reasonable attorneys' fees for the filing and pursuing of its 
successful protest.

CORPORATE LABOR

TSAI's initial claim for its internal corporate labor costs (corporate 
executive staff) amounted to $63,744 for 1,039 labor hours for three 
individuals.  The labor hours in the claim are presented on a weekly 
basis in a lump-sum total labor hours not identified with any 
individual.  Additionally, the Navy states that the hours claimed are 
excessive and are not adequately supported.  We agree.  We give the 
following examples:

        "6/26-7/2/94   GAO to Lee [TSAI's attorney] acknowledgment of 
        protest.  Lee requests GAO to provide TSAI all Dixon 
        documents.  [Corporate hours claimed:  27 hours]

        "8/14-8/20/94  Research compromise settlement prior to GAO 
        decision.  [Corporate hours claimed:  20 hours]

        "8/28-9/3/94  8/29 fax from Navy of GAC/TSAI's prop.  Lee fax 
        of TSAI's supplementary comments (requested by GAO). 
        supplementary comments (requested by GAO).  [Corporate hours 
        claimed:  46 hours]"

We find that not only are these claimed expenses excessive on their 
face but they are also unsupported and lack any reasonable detail.[5]  
The Navy agreed to pay a very small portion of these corporate 
in-house labor rates based on its "guesstimate" of reasonable hours 
despite the absence of any breakdown by individuals of the hours 
worked or any detailed explanation of item-by-item charges. We do not 
recommend that the Navy do so.

At the time of our decision and TSAI's filing of its claim with the 
agency, our Bid Protest Regulations provided that when we found that 
an agency should reimburse a protester for its costs of filing and 
pursuing its protest:

        "[t]he protester shall file its claim for costs, detailing and 
        certifying the time expended and costs incurred, with the 
        contracting agency within 60 days after receipt of the 
        decision on the protest or the declaration of entitlement to 
        costs.  Failure to file the claim within such time shall 
        result in forfeiture of the protester's right to recover its 
        costs . . . ."       4 C.F.R.  sec.  21.6(f)(1) (1995).

Claims for the reimbursement of expenses, at a minimum, must identify 
the amounts claimed for each individual expense, the purpose for which 
that expense was incurred, and how the expense relates to the protest.  
Diverco, Inc.--Claim for Costs, supra.  In our view, TSAI's claim 
submission, with its bare general statements, without further 
explanations, breakdowns, or supporting documentation, provided 
completely insufficient detail for the agency to adequately assess the 
reasonableness of the claimed costs.
 
The Regulations are clear--a protester that fails to comply with the 
claim filing requirement "shall" forfeit its right to be reimbursed 
its costs.  TSAI fail to properly file a claim "detailing and 
certifying" its costs with the contracting agency concerning its 
corporate labor hours within 60 days after receipt of the decision 
sustaining its protest.  See Test Sys. Assocs., Inc.--Claim for Costs, 
72 Comp. Gen. 169 (1993), 93-1 CPD  para.  351.  Accordingly, TSAI forfeited 
its right to recover these costs, which, in any event, are completely 
unsupported.  Accordingly, the claim for corporate labor hours is 
denied.

CONCLUSION

TSAI is entitled to recover $9,762 for the costs of reasonable 
attorneys' fees related and allocable to the prosecution of its 
successful bid protest.

Comptroller General
of the United States
  
1. D.K. Dixon & Company, Inc., another offeror, had proposed the 
lowest price of  $2.4 million; however, the agency found TSAI to have 
submitted the technically superior proposal at a price of $2.7 
million.  The contracting officer, pursuant to a price/technical 
tradeoff decision, selected TSAI for award.

2. The agency also disallowed all expenses incurred for attorneys' 
services for the lengthy size appeal proceedings before the SBA 
following the issuance of our decision on October 14, 1994.  In its 
comments on the report, counsel for TSAI argues that the SBA costs 
should be reimbursed because "SBA review was a natural and necessary 
consequence of the GAO decision [recommending that the agency refer 
the question of TSAI's size status to the SBA]."  However, the 
question of a firm's size is solely within the jurisdiction of the 
SBA, not our Office, see 4 C.F.R.  sec.  21.3(m)(2) (1995), and, as stated 
above, we will not reimburse a firm's legal expenses incurred in 
connection with a matter in a different independent forum.  We 
therefore disallow these costs.  The agency also disallowed the cost 
of TSAI's counsel's employment of a legal "expert in the field of 
government contracts [who] was required for specific interpretation" 
of the SBCR clause.  The charge by the legal expert is for 16 hours of 
telephone consultations.  The consultant's charge does not itemize the 
amount of time or the subject matter of the conversations.  We 
disallow this cost item for the same reasons as discussed below 
concerning corporate labor costs claimed by the protester.

3. TSAI's attorneys also billed a lump-sum item entitled 
"disbursements" (in TSAI's initial claim this item amounted to 
$7,004).  The agency states that without any explanation, it is unable 
to begin to determine how much of these "disbursements" are allocable 
to an allowable charge since the great majority of attorney charges 
were disallowed.  We have reviewed the record and have confirmed that 
this record contains no breakdown or evidence of any amount of these 
disbursements allocable to TSAI's successful bid protest.  
Accordingly, for the reasons discussed below with respect to corporate 
labor (lack of documentary support), we also disallow these costs.

4. In this regard, the protester claims expenses (attorney and 
corporate labor costs) for pursuing this claim in our Office.  The 
purpose of our Regulations allowing protesters such recovery is to 
encourage agencies to expeditiously reach agreement with successful 
protesters on the quantum of recoverable costs.  See American Imaging 
Servs., Inc.--Request for Declaration of Entitlement to Costs, 
B-246124.4, Dec. 30, 1992, 92-2 CPD  para.  449.  Where the agency's 
position in a cost dispute is reasonable, as we find it to be here, 
the protester is not entitled to the costs of challenging that 
position.  See Stocker & Yale, Inc.--Claim for Costs, 72 Comp.   Gen. 
193 (1993), 93-1 CPD  para.  387.

5. Many of the hours claimed by TSAI for corporate labor concern the 
defense of Dixon's FOIA request and SBA matters.  These are disallowed 
for reasons already explained.