BNUMBER:  B-265649.4 
DATE:  September 9, 1997
TITLE: Tri Tool, Inc.--Entitlement to Costs, B-265649.4, September
9, 1997
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Matter of:Tri Tool, Inc.--Entitlement to Costs

File:     B-265649.4

Date:September 9, 1997

Paul C. Bingaman for the protester.
Granette Trent, Esq., Department of Justice, for the agency.
Robert C. Arsenoff, Esq., and Paul I. Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Reasonable bid preparation costs incurred prior to issuance of 
solicitation may be recovered where record shows that they were 
incurred directly in anticipation of competing for the specific 
contract eventually awarded under the solicitation.

DECISION

This Office has been requested by the parties to recommend the amount 
that the Department of Justice should pay Tri Tool, Inc. for the costs 
of preparing its bid under invitation for bids (IFB) No. 1PI-B-1498-95 
and for the cost of filing and pursuing its sustained protest, Tri 
Tool, Inc., B-265649.2, Jan. 22, 1996, 96-1 CPD  para.  14.  The IFB covered 
the acquisition of pipe cutting components to be assembled by Federal 
Prison Industries, Inc., Department of Justice, for the Department of 
the Army.

BACKGROUND

Our Office sustained Tri Tool's protest against the award of a 
contract to E.H. Wachs Company because the protester's low bid was 
rejected for failure to meet salient characteristics which were not 
set forth in the IFB.  Based on status advice provided by the agency, 
our decision recommended termination of Wachs's contract, 
resolicitation of the requirements under revised specifications, and 
reimbursement of Tri Tool's costs of filing and pursuing its protest.  
Because we were later informed by the agency that its earlier advice 
was in error and that performance had, in fact, been completed prior 
to the issuance of our initial decision, we modified the recommended 
remedy to include bid preparation costs. Tri Tool, Inc.--Modification 
of Remedy, B-265649.3, Oct. 9, 1996, 96-2 CPD  para.  139      at 2. 

The parties have exchanged correspondence concerning Tri Tool's claim 
and report that they are unable to reach an agreement regarding the 
amount to which the protester is entitled.  Tri Tool claims a total of 
$44,176, broken down as follows: legal fees of $679; lost anticipated 
profits of $21,890; bid preparation costs of $17,495; and bid protest 
costs of $4,112.  The agency has accepted without question the claimed 
$679 for legal fees and has completely disallowed the claim for 
anticipated profits.  Further, the agency has adjusted the claimed 
costs for bid preparation and filing and pursuing the protest downward 
from $17,495 to $6,186 and $4,112 to $2,357, respectively.  As a 
result of its analysis, the Department of Justice reports that it is 
prepared to pay Tri Tool $9,222.  As discussed below, we recommend 
that Justice reimburse Tri Tool a total of $14,233.

LEGAL FEES AND ANTICIPATED PROFITS

In light of the agreement between the parties regarding the 
protester's documented legal fees, we need not discuss that aspect of 
the claim further.  With respect to the $21,890 claim for anticipated 
profits, the agency correctly disallowed it entirely because lost 
anticipated profits may not be recovered as part of protest costs, 
even in the presence of wrongful agency action.  Gulf Elec. Constr. 
Co., Inc.--Claim for Costs, B-235635.2, Jan. 5, 1990, 90-1 CPD  para.  19 at 
2.

BID PREPARATION COSTS

With respect to bid preparation costs, Tri Tool claimed 186.0 burdened 
labor hours for eight individuals in engineering, sales and management 
capacities (with the amount claimed for each position reflecting 
undisputed burdened rates), as follows:

    Position    Hours Claimed Total Amount Claimed

   Engineer 1        43.0     $  2,566

   Engineer 2        13.5     $  1,258

   Engineer 3         5.5     $    307 (not in  dispute)

     Sales 1         86.0     $10,728

     Sales 2         10.0     $    524 (not in dispute)

    Manager 1        20.0     $  1,169

    Manager 2         6.0     $    735

    Manager 3         2.0     $    208

      Total         186.0     $17,495
In support of the number of hours claimed, the protester submitted a 
"Chronology of Events," indicating the date various tasks were 
performed, the nature of the tasks, and the number of hours spent 
performing the tasks for each employee position.

A protester seeking recovery of its bid preparation costs must submit 
sufficient evidence to support its claim that those costs were 
incurred and are properly attributable to bid preparation.  The amount 
claimed may be recovered to the extent it is adequately documented and 
reasonable.  See Stocker & Yale, Inc.--Claim for Costs, 72 Comp. Gen. 
193, 196 (1993), 93-1 CPD  para.  387 at 4.

With respect to Engineer 1, the agency reduced the number of hours 
claimed from 43.0 to 29.0 because the chronology showed that 14 hours 
represented activities performed prior to the issuance of the 
solicitation.  We have never adopted a "bright line" test which 
necessarily renders all costs incurred prior to the issuance of a 
solicitation unrecoverable.  Rather, we look to see whether, under the 
circumstances of an individual procurement, the claimed costs were 
incurred in anticipation of competing for the specific contract at 
issue.  See Stocker & Yale, Inc.--Claim for Costs, supra, at 4-5 (QPL 
qualification costs, although necessary for competing on the contract 
at issue, were not allowed as proposal preparation costs because the 
record did not show that they were incurred solely for the purpose of 
competing for the contract).

Here, the record supports the protester's position that the disputed 
costs were incurred after it learned of the upcoming procurement and 
that they were principally related to traveling to an Army facility in 
Virginia to obtain specifications for the items eventually purchased 
under the IFB and to study existing equipment and accessories in order 
to understand how to design equipment that would meet the Army's 
needs.  Accordingly, the 14 hours disallowed by the Department of 
Justice are properly attributable to bid preparation for the protested 
procurement,  and we therefore recommend that Tri Tool be reimbursed 
an additional $828 for the full $2,566 claimed for Engineer 1.

With respect to Engineer 2, the agency denied recovery for all 13.5 
hours claimed, stating that the documentation did not support the 
conclusion that the individual's activities were related to bid 
preparation.  We disagree.  The chronology submitted by Tri Tool 
includes handwritten footnotes regarding the activities of the 
engineer detailing 9 hours spent prior to the submission of the bid 
performing design and bid review functions.  Accordingly, we recommend 
that Tri Tool be reimbursed $839 reflecting 9 of the hours disallowed 
by the agency for Engineer 2.  With respect to the remaining 4.5 hours 
the agency disallowed, although it appears that this engineer 
performed some of them following the submission of the bid, there is 
nothing in the record reflecting his participation in the bid 
preparation process.

With respect to the 86 hours claimed for Salesperson 1, the agency 
allowed 29 hours, but denied recovery for 26 hours incurred prior to 
the issuance of the solicitation and 31 hours of costs incurred after 
the bid was submitted.  The 26 pre-issuance hours are appropriately 
recoverable because the record shows they were incurred for 
principally the same activities as those discussed above relating to 
Engineer 1.  Thus, we recommend that Tri Tool be reimbursed for 55 
hours (i.e., $5,861, $2244 more than the amount allowed by the agency) 
for Salesperson 1.  The remaining 31 hours are not appropriately 
recoverable as bid preparation costs because they were incurred after 
the submission of the bid.

With respect to Manager 1 (the Engineering Manager) the agency denied 
recovery for all 20 hours claimed, stating that the record did not 
support the conclusion that the individual's activities were related 
to bid preparation.  On the contrary, the record shows that Manager 1 
spent 18 hours prior to the submission of the bid reviewing design 
parameters needed to comply with the Army's needs and working on the 
bid package.  These 18 hours amount to $1,052 for Manager 1.  With 
respect to the 2 hours disallowed by the agency, the record reflects 
that these were incurred following the submission of the bid and are 
therefore not recoverable as bid preparation costs.

With respect to Managers 2 and 3, the agency disallowed the entire 
amount claimed on the basis that the chronology does not adequately 
support that their activities were related to bid preparation.  The 
chronology does not list any hours for Manager 2 prior to the 
submission of the bid.  The description of the 2 hours claimed for 
Manager 3--the Chief Financial Officer--is confusing insofar as the 
chronology indicates that these hours involved the Engineering and 
Sales departments (rather than the Chief Financial Officer) working on 
the bid package.  Accordingly, we agree with the agency regarding the 
costs claim for these individuals, since it is unclear that they are 
related to preparing Tri Tool's bid.

The amounts discussed above, when added to the amounts not in dispute, 
total $11,149, for Tri Tool's recoverable costs for its bid 
preparation expenses.

PROTEST COSTS

With respect to protest costs, Tri Tool claimed 42.5 burdened hours as 
follows:

    Position   Hours Claimed  Total Amount Claimed

   Engineer 1            1 .0   $     59

   Engineer 2              .5   $     47

   Engineer 3              .5   $     28

     Sales 1            19.0    $ 2,370

     Sales 2              1.0   $     52Manager 1           2.0  $   
                              117

    Manager 2             2.0   $   245

    Manager 3             2.0   $   208

    Manager 4           14.5    $   986 (not in dispute)

      Total             42.5    $ 4,112
The amount claimed for the costs of filing and pursuing a protest may 
be recovered to the extent that the claim is adequately documented and 
is shown to be reasonable.  At a minimum, claims for reimbursement of 
expenses must identify and support the amounts claimed for each 
expense, the purpose for which the expense was incurred and how the 
expense relates to the protest filed with this Office. Aztec Dev. 
Co.--Claim for Costs, B-270275.2, Feb. 13, 1997, 97-1 CPD  para.  73 at 2.  
Costs incurred filing and pursuing agency-level protests are not 
allowable, Diverco, Inc.--Claim for Costs, B-240639.5, May 21, 1992, 
92-1 CPD  para.  460 at 4-5, and the costs of pursuing claims before this 
Office are not allowable where, as here, the agency has expeditiously 
attempted to resolve the claim.  See Manekin Corp.--Claim for Costs, 
B-249040.2, Dec. 12, 1994, 94-2 CPD  para.  237 at 6-7. 

With the exception of Manager 4, the agency has fully or partially 
disallowed the hours claimed for each individual, stating that the 
record does not support a conclusion that they related to 
participation in the General Accounting Office protest process.  We 
have carefully examined the chronology submitted by the protester and 
generally agree with the agency.  Except as discussed below, the 
chronology does not show that the activities for which costs are 
claimed related to the protest process here.  (As explained above, to 
the extent that the claimed costs may arguably relate to Tri Tool's 
agency-level protest or its claim here, they are not allowable.)

We disagree with the agency with respect to Engineer 2 and restore the 
$47 claimed because the record supports his participation in the 
drafting of the protest.  With respect to Salesperson 1, the agency 
disallowed 8 hours of the 19 claimed, stating that the record only 
supported the conclusion that 11 hours were related to the protest 
before this Office.  We agree.[1]  These amounts, when added to the 
$986 not in dispute for Manager 4, total $2,405 for Tri Tool's 
reimbursable protest costs.

SUMMARY 

We recommend that Tri-Tool's claim be paid in the amount of $679 for 
legal fees, $11,149 for bid preparation expenses and $2,405 for 
protest costs for a total of $14,233.

Comptroller General
of the United States

1. We note, however, that the agency apparently erred in calculating 
the protester's entitlement for this individual to be $1,371, instead 
of $1,372.