BNUMBER:  B-265646.4
DATE:  November 20, 1995
TITLE:  Holiday Inn-Laurel--Entitlement to Costs

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Matter of:Holiday Inn-Laurel--Entitlement to Costs

File:     B-265646.4

Date:   November 20, 1995     

James H. Roberts III, Esq., and Beverly K. Carmichael, Esq., Manatt, 
Phelps & Phillips, for the protester.
Col. Nicholas P. Reston, and Capt. Philip T. McCaffrey, Department of 
the Army, for the agency.
Tania L. Calhoun, Esq., and Christine S. Melody, 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 when the agency took corrective action after comments were 
filed where the comments raised new allegations; the corrective action 
was clearly linked to these new allegations and not to the initial 
protest allegation, which was not clearly meritorious; and the 
corrective action was taken 5 working days after the comments were 
filed. 

DECISION

Holiday Inn-Laurel requests that we declare it entitled to 
reimbursement of its costs of filing and pursuing a protest 
challenging the exclusion of its proposal from the competitive range 
under request for proposals (RFP) No. DAHC36-95-R-0012, issued by the 
Department of the Army for the provision of meals, lodging, and 
transportation to support the Baltimore Military Entrance and 
Processing Station in Baltimore, Maryland.  Holiday Inn contends that 
the Army unduly delayed taking corrective action in response to its 
protest.

We deny the request.

The RFP, issued on May 26, 1995, set forth various technical factors 
and price as evaluation criteria and advised that award would be made 
to the offeror submitting the lowest-priced, technically acceptable 
offer.  The Army evaluated the offers it received, conducted 
discussions, reevaluated the offers, and excluded Holiday Inn's 
proposal from the competitive range as technically unacceptable.  

On August 17, Holiday Inn filed a protest with our Office challenging 
the Army's action and specifically argued that the Army improperly 
concluded that its proposal did not comply with the RFP's overflow 
housing requirements.[1]  Holiday Inn pointed out that its proposal 
stated that it would comply with these requirements.

On September 22, the Army submitted its report to our Office in which 
it asserted that Holiday Inn's "blanket assurances" were not 
sufficient to show compliance with the RFP's requirements.  The agency 
stated that its actions were proper, and provided evaluation documents 
to support its position.  Three days later, in response to the 
protester's request for additional documents, the Army provided its 
competitive range determination.  That document listed the point 
spread demarcating the Army's competitive range, and stated that 
Holiday Inn's proposal was found technically unacceptable for two 
previously undisclosed reasons:  the firm had very little past 
experience and had not submitted past performance evaluations, and its 
training plans for employee orientation and customer service were 
unacceptable.  

On September 29, Holiday Inn filed its comments on the agency report.  
In addition to addressing the Army's response concerning its overflow 
housing procedures, Holiday Inn raised several new issues derived from 
the agency report.  Specifically, Holiday Inn argued that the Army 
improperly failed to consider price in its competitive range 
determination and used a predetermined cutoff score; improperly failed 
to reevaluate its proposal under the site visit factor; improperly 
determined that it, the incumbent contractor, had little past 
experience; improperly required it to submit past performance 
evaluations when the Army possessed such evaluations; and improperly 
evaluated its orientation plan.

On October 3, our Office asked the Army to respond to Holiday Inn's 
allegations concerning the site visit and past performance 
evaluations.  On October 6, in lieu of filing a response to our 
request, the Army advised our Office that it was taking corrective 
action by reopening discussions and including the protester's proposal 
in the competitive range.  In light of the corrective action, we 
dismissed the protest as academic on October 11.  Holiday Inn now 
requests that we find it entitled to the costs of filing and pursuing 
its protest.  

Where an agency takes corrective action prior to our issuing a 
decision on the merits, we may declare the protester entitled to 
recover the reasonable costs of filing and pursuing the protest.  4 
C.F.R.  21.6(e) (1995).  We will find a protester so entitled, 
however, only where the agency unduly delayed taking corrective action 
in the face of a clearly meritorious protest.  Oklahoma Indian 
Corp.--Claim for Costs, 70 Comp. Gen. 558 (1991), 91-1 CPD  558.  A 
protester is not entitled to costs where, under the facts and 
circumstances of a given case, the agency has taken reasonably prompt 
corrective action.  Id.  In deciding whether an agency's corrective 
action was so delayed as to warrant the award of costs, the 
determination of the appropriate date from which the promptness of the 
corrective action is measured is critical.  CSL Birmingham Assocs.; 
IRS Partners-Birmingham--Entitlement to Costs, B-251931.4; B-251931.5, 
Aug. 29, 1994, 94-2 CPD  82.  

Holiday Inn argues that the Army had two opportunities to take earlier 
corrective action--its agency report and its response to the 
protester's request for additional documents--and that its failure to 
do so was an undue delay which caused Holiday Inn to expend 
significant time and resources in filing and pursuing the protest.  
The protester argues that the reason now given for the Army's having 
taken corrective action--its allegation that the Army failed to 
consider price in its competitive range determination--was put before 
the Army in the August 17 protest, to the extent it raised the basic 
issue of whether the competitive range was properly formed.

Holiday Inn's August 17 protest was specifically limited to a 
challenge of the Army's evaluation of its overflow housing procedures.  
It was not until September 29 that Holiday Inn raised the additional 
allegations described above.  Where a protester raises different 
protest grounds in multiple submissions to our Office, the filing of 
the initial protest establishes the appropriate date for determining 
the promptness of the agency's subsequent corrective action only where 
there is a nexus between the protest grounds set forth at that time 
and the corrective action.  See GVC Cos.--Entitlement to Costs, 
B-254670.4, May 3, 1994, 94-1 CPD  292.  Here, the corrective action 
was not clearly related to the allegation concerning Holiday Inn's 
overflow procedures; rather, the agency's decision to take corrective 
action was based on its failure to consider price in the competitive 
range determination, an issue that was not raised by the protester 
until its September 29 comments. 

Contrary to the protester's view, its initial challenge to the 
competitive range determination on the basis that its proposal was 
improperly evaluated under one specific subfactor did not obligate the 
Army to review its entire competitive range determination in an effort 
to identify any errors that may have occurred.  While an agency should 
be aware of such errors and take corrective action when necessary, 
when it is not so aware, the bid protest process is an effective tool 
for identifying and seeking correction of such errors.  The mere 
existence of an error of which an agency arguably should be aware and 
take action to correct does not mean that the agency has unduly 
delayed by not taking corrective action until after the alleged error 
is identified in a bid protest.  Id.  

In our view, there was nothing in Holiday Inn's August 17 protest that 
would justify using that date to measure whether the Army unduly 
delayed taking corrective action in the face of a clearly meritorious 
protest.[2]  Instead, the relevant date for measuring the promptness 
of the Army's response to Holiday Inn's protest is September 29, when 
that firm's comments raised the specific challenges identified above 
concerning the evaluation of its offer.  Even assuming that those 
issues were clearly meritorious, the Army's notification of corrective 
action on October 6, 5 working days after Holiday Inn's comments were 
filed, did not constitute undue delay.  Id.

The request for a declaration of entitlement to costs is denied.

Comptroller General 
of the United States

1. We dismissed Holiday Inn's earlier protest of the Army's action 
because the firm had not yet requested or received a debriefing to 
learn the Army's reasons for excluding its proposal from the 
competitive range.  During the debriefing, Holiday Inn was told only 
that its proposal was technically unacceptable because it had not 
complied with the RFP's overflow housing requirements. 

2. In addition to lacking a sufficient nexus to the corrective action, 
the initial allegation as to the agency's evaluation of Holiday Inn's 
plan for overflow housing is not clearly meritorious, also a 
prerequisite for determining that the agency unduly delayed taking 
corrective action.  Specifically, the record shows that the agency 
concluded that Holiday Inn's general responses did not satisfy the 
RFP's requirement for a plan to deal with overflow needs.  While the 
protester disagrees with the agency's conclusion, we see no basis to 
conclude that the agency's evaluation was clearly unreasonable in this 
area.