BNUMBER:  B-258089.7
DATE:  December 13, 1995
TITLE:  Libby Corporation--Entitlement to Costs

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Matter of:Libby Corporation--Entitlement to Costs

File:     B-258089.7

Date:     December 13, 1995

Maureen T. Kelly, Esq., Lynda Troutman O'Sullivan, Esq., and Anne B. 
Perry, Esq., Fried, Frank, Harris, Shriver & Jacobson, for the 
protester.
Craig E. Hodge, Esq., and Brian Toland, Esq., Department of the Army, 
for the agency.
Paul E. Jordan, Esq., and Paul Lieberman, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protester is not entitled to the costs of filing and pursuing its 
protest where agency did not unduly delay in taking corrective action 
on matters raised in supplemental protest.  Agency's review of matters 
raised in original protests, in order to assure a comprehensive 
review, did not constitute corrective action.

DECISION

Libby Corporation requests that our Office declare the firm entitled 
to recover the reasonable costs of filing and pursuing its protest 
concerning request for proposals (RFP) No. DAAK01-94-R-0034, issued by 
the Department of the Army, for tactical quiet generators (TQG).  The 
protest, filed January 23, 1995, and supplemented on February 2 and 
March 15, challenged the agency's evaluation, which led to the award 
of a contract to the Fermont Division of Dynamics Corporation of 
America (Fermont).

We find that the protester is not entitled to recover the costs of 
filing and pursuing its protest.  

The solicitation contemplated award of a fixed-price requirements 
contract for supply of 5 through 60 kilowatt TQG sets.  Proposals were 
to be evaluated on the basis of price, technical, and past performance 
factors.  Price was most important, carrying twice the weight of 
technical and past performance which were of equal weight.  Award was 
to be made to the offeror whose proposal represented the best overall 
value to the government.  Nine offerors, including Libby and Fermont, 
submitted proposals by the July 11, 1994, closing date.  The agency 
evaluated the proposals, conducted discussions, and obtained best and 
final offers from Libby and Fermont.  Libby's proposal was rated 
"exceptional" under the technical factor and "low risk" under the past 
performance factor.  Fermont's proposal was rated "exceptional" and 
"medium low risk" at a price approximately $5 million lower than 
Libby's.  The source selection authority (SSA) determined that Libby's 
slight technical and past performance advantages did not outweigh 
Fermont's lower price, and the agency awarded the contract to Fermont.  

In its initial protest, filed January 23, 1995, Libby alleged that 
Fermont's past performance on a contract for different sized TQGs was 
deficient and that the agency had not considered that fact in its 
evaluation of the technical and past performance factors.  Libby also 
alleged that Fermont's price was unreasonably low and that the 
combination of evaluation errors made the source selection decision 
unreasonable.  After receiving a debriefing, Libby amended its protest 
on
February 2, contending that the agency failed to consider alleged 
negative information discovered during a pre-award survey of Fermont's 
facility.  

In its March 1 combined report, the agency contended that its 
selection of Fermont for award was proper because it had considered 
Fermont's past performance in its evaluation and source selection 
decision.  The agency acknowledged that Fermont's performance of the 
other TQG contract was deficient and that performance under that 
contract had been halted.  However, the agency explained that many of 
the performance difficulties were due to government specification 
problems.  The agency also noted that Libby had a TQG contract that 
suffered from similar difficulties which had resulted in a 2-year 
production delay.  Both contracts had called for production of TQGs 
based on performance specifications which the contractors and the 
government believed could be achieved through simple assembly of 
components.  As performance progressed, it became clear that the 
specifications could not be met without research and development 
and/or relaxation of some requirements.  Because Libby was ultimately 
successful in producing its generators, its proposal received a "low" 
risk rating; Fermont's received a "medium low" rating.  The agency 
also maintained that its "exceptional" rating of Fermont's technical 
proposal was warranted, notwithstanding the awardee's lower proposed 
labor hours, in light of the data Fermont had submitted to support its 
approach.  The agency also argued that nothing in Fermont's 
satisfactory pre-award survey would have had a negative impact on the 
technical evaluation.  

On March 15, Libby filed a third protest raising new grounds based on 
its review of the evaluation documents.  Libby argued that the 
agency's award determination was unreasonable because it had not 
considered the "true status" of Fermont's other TQG contract; had 
failed to evaluate the impact of Fermont's past performance on its 
technical capability; had been inconsistent in rating Fermont's 
proposal "exceptional" given the concerns expressed by some of the 
evaluators and the
pre-award survey; had failed to evaluate the impact of Fermont's low 
labor hour proposal on Fermont's technical merit; and had improperly 
evaluated Fermont's proposed price.  Libby also contended that 
Fermont's proposal failed to comply with the required delivery 
schedule.  On April 5, Libby submitted its comments on the agency 
report and additional documents furnished by the Army between
March 14 and 28.

In its comments, Libby detailed various instances where the evaluation 
documents allegedly were inconsistent with and/or failed to take into 
account Fermont's past performance.  After reviewing Libby's third 
protest and its comments, the Army determined that there was "some 
merit to the protest."  On April 20, the due date for its agency 
report, the Army advised our Office that it was taking the corrective 
action of having Libby's and Fermont's submissions reevaluated.  A 
memo attached to the Army's letter stated that the protester had 
highlighted parts of the evaluation process which had not been 
considered before.  Specifically, the memo directed the evaluators to 
focus on seven areas:  the proper role and consistent application of 
the other TQG contract in the past performance evaluation; whether the 
current procurement required "similar engineering effort" as suggested 
in the protester's comments; whether both offerors should be evaluated 
in past performance where the firms may have been partly responsible 
for failures experienced; a review of the standards and their 
application for determining contracts relevant to past performance; 
determining the importance of and role to be played by the offerors' 
history of high capacity contracts; a review of the pre-award surveys 
to determine consistency with the evaluation and to fully explain any 
conflicts; and a review of the government's independent estimate and 
consideration of any significant offeror variations from it.  
Thereupon, our Office dismissed the protests as academic.  
Subsequently, the protester requested that we declare it entitled to 
the costs of filing and pursuing its protests.  

Pursuant to our Regulations, if the contracting agency decides to take 
corrective action in response to a clearly meritorious protest, we may 
declare the protester to be entitled to recover reasonable costs of 
filing and pursuing its protest, including attorneys' fees.  4 C.F.R.  
21.6(e) (1995); KIME Enters., Inc.--Entitlement to Costs, B-241996.5, 
Dec. 9, 1991, 91-2 CPD  523.  Our rationale for making such a 
declaration is our concern that some agencies take longer than 
necessary to initiate corrective action in the face of meritorious 
protests, thereby causing protesters to expend unnecessary time and 
resources to make further use of the protest process in order to 
obtain relief.  KIME Enters., Inc., supra.  Whether to award costs is 
based on the circumstances of each case.  We will not award protest 
costs in every case in which an agency takes corrective action.  In 
this regard, we will not award costs where, based on the circumstances 
of the case, corrective action did not result from a clearly 
meritorious protest.  ManTech Field Eng'g Corp.--Entitlement to Costs, 
B-246152.3, June 12, 1992, 92-1 CPD  514.  

The Army concedes that the corrective action it took in obtaining a 
reevaluation of the Libby and Fermont proposals was in response to the 
protest grounds, but argues that it did not unduly delay in taking 
that corrective action.  The Army maintains that it was not until it 
received the protester's March 15 protest and comments on the agency 
report, specifically identifying aspects of the evaluation which were 
flawed, that it determined that its source selection decision appeared 
to be based on inadequate analysis and/or documentation by the 
evaluation team.  By taking corrective action within 2 weeks of 
receiving Libby's report comments and on the due date for the agency 
report on the third protest, the Army maintains that it did not unduly 
delay taking corrective action.  Libby argues that the corrective 
action was based on matters of which the agency was aware from the 
time of its first two protests.

Based on our review of the protest filings and the specific areas of 
reevaluation encompassed by the agency's corrective action, we agree 
with the Army that it did not unduly delay in responding to four areas 
which were first identified in Libby's third protest and its comments 
on the agency report:  the review of how the agency determined which 
contracts were relevant to past performance; its consideration of the 
importance of offerors' history of high capacity contracts; the review 
of the government's independent estimate and consideration of any 
significant offeror variations from it; and consideration of whether 
the current effort required "similar engineering effort."  It was not 
until Libby's third protest and comments, identifying the deficiencies 
in the evaluation documentation, that the agency determined that 
corrective action was warranted.  We find that the agency did not 
unduly delay in taking corrective action on these matters. 

It is true that, at the same time the agency had its evaluators 
consider the newly identified matters, it also had them review the 
other three matters which were apparent from the first two protests:  
proper review of Fermont's other TQG contract; the effect of partial 
contractor responsibility on past performance; and proper 
consideration of pre-award surveys in the evaluation.  However, the 
agency has consistently maintained that it did not err with regard to 
these matters, and its decision to include them in the reevaluation, 
essentially in order to assure a comprehensive review, did not 
constitute corrective action. 

The agency's position is supported by the results of the reevaluation.  
The evaluators found that none of the matters raised by Libby in its 
original protests had any effect on their award recommendation.  
Further, in a supplemental source selection decision, the SSA 
considered the findings of the reevaluation and concluded that the 
award to Fermont was fully justified.  

For example, with regard to the failure to consider allegedly 
inconsistent findings between the pre-award survey and the evaluation, 
the agency found that there was no inconsistency.  The negative items 
on the survey on which the protester relied were viewed by the agency 
as minor matters which did not contradict the agency's evaluation.  
With regard to the past performance review, the evaluators determined 
that some of Fermont's prior contracts that had originally been 
considered relevant were not.  They further considered Fermont's other 
TQG contract and concluded that it had a neutral effect on the past 
performance score since the agency shared responsibility for the 
performance difficulties.  Overall, the evaluators concluded that 
Fermont's truly relevant contracts supported the original rating of 
"medium low risk."  While the SSA determined that the past performance 
score should have been "medium to medium low," instead of "medium 
low," he states that this minor score change did not affect his 
selection decision.  Finally, we note that after receiving the SSA's 
supplemental decision, Libby withdrew its renewed protest of the 
agency's decision to keep the award with Fermont.

Under the circumstances, we find no delay associated with the taking 
of any corrective action in this case and accordingly we deny the 
request for declaration of entitlement to costs.

Comptroller General 
of the United States