BNUMBER:  B-271034.2 
DATE:  November 20, 1997
TITLE: CNA Industrial Engineering, Inc.--Costs, B-271034.2, November
20, 1997
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Matter of:CNA Industrial Engineering, Inc.--Costs

File:     B-271034.2

Date:November 20, 1997

Richard L. Hames, Esq., Davis Wright Tremaine, for the protester.
Steven W. Feldman, Esq., Department of the Army, for the agency.
Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Costs of filing and pursuing a protest are not limited to costs 
associated with the sustained issue alone where it was not necessary 
to resolve the other issues raised by the protester in view of the 
fact that the General Accounting Office (GAO) recommended that the 
agency reopen discussions.  

2.  GAO recommends that successful protester be reimbursed costs 
related to the time spent in pursuit of the protest by its own 
employee and its subcontractors' employees to the extent that such 
costs are reasonable; the protester and the subcontractors acted in 
concert in filing and pursuing the protest, and the protester is 
obligated to reimburse its subcontractors for employees' time.

3.  Hours charged by an employee of the successful protester's 
subcontractor as part of its claim for pursuing its protest are 
unreasonable where they exceed the time spent by the protester's 
attorney, they are not adequately supported, and they are duplicative 
of hours claimed by the protester's employee.

DECISION

CNA Industrial Engineering, Inc. requests that our Office recommend 
the amount that it should be reimbursed by the United States Army 
Corps of Engineers for the costs of filing and pursuing its protest 
under request for proposals (RFP) No. DACA87-95-R-0092.  The RFP was 
for installation and testing of an automated storage and retrieval 
system for use at the Brooke Army Medical Center, San Antonio, Texas, 
and for associated maintenance and training services.  We sustained 
CNA's protest against the award to GeneSys, Inc. because GeneSys had 
no interface experience with the Army's information software system, 
the so-called TAMMIS system, as required by the RFP, and, therefore, 
the award to GeneSys amounted to an improper relaxation of the RFP's 
minimum requirements.[1]

CNA initially submitted its claim for costs, totaling $72,682 directly 
to the Corps of Engineers.  After an exchange of correspondence 
between the parties regarding, among other things, allowability of 
certain costs, severability of costs for issues that were sustained 
from those that were not, reasonableness of the hours claimed, and 
sufficiency of the evidence to support the claim, CNA revised its 
claim downward to a total of $62,732.[2]  The Corps rejected the bulk 
of the claim and offered CNA partial reimbursement totaling $12,081.  
CNA rejected the agency's offer and submitted the claim to our Office.

The Corps contends that CNA's entire claim should be rejected because 
the original protest was untimely.  According to the Corps, CNA should 
have known that GeneSys did not have the required TAMMIS experience 
and therefore should have filed its initial protest on that basis 
within 14 days after CNA was notified on December 28, 1995, that the 
contract had been awarded to GeneSys.[3]  The Corps asserts that CNA 
knew at that time that the TAMMIS system was deployed at just one 
site, the Madigan Army Medical Center, and that CNA, not GeneSys, had 
a contract with the Army at that site which would give it the required 
TAMMIS interface experience.  As CNA waited until after it was 
debriefed by the Corps on February 1, 1996, to file its original 
protest in our Office, the Corps asserts that the original protest 
(filed on February 5) was untimely.  

The Corps's contention provides no reason to reject CNA's claim for 
the costs of pursuing its successful protest.  The facts that the 
Corps now believes establish the untimeliness of CNA's protest--that 
CNA, by virtue of its one Army contract, must have known that it was 
the only firm with TAMMIS experience and that the awardee could not 
have the required experience--was known or should have been known to 
the Army at the time CNA filed its protest.  We will not now, in the 
context of considering a claim for costs, consider arguments that 
could and should have been raised in the original protest.  See Tony 
Western--Recon., B-241169.3, May 21, 1991, 91-1 CPD  para.  489 at 3.  
    
In addition to the TAMMIS interface experience issue, CNA protested 
that the Corps's evaluation of CNA's proposal was unreasonable because 
the Corps had downgraded its proposal regarding the proposed source 
site license, software maintenance, and temporary shelving.  The Corps 
contends that CNA's reimbursement should be limited to the costs 
incurred in pursuing the TAMMIS interface experience issue that we 
sustained, but not the other issues.  The Corps asserts that the other 
issues are severable because they were not sustained and because they 
concerned the evaluation of CNA's proposal, not whether GeneSys met 
the experience requirement.  The Corps estimates that only about 
one-third of the total protest costs were related to the TAMMIS 
experience issue and, therefore, asserts that CNA's reimbursement 
should be limited to just one-third of the total allowable costs.   

As a general rule, we consider a successful protester entitled to 
costs incurred with respect to all issues pursued, not merely those 
upon which it prevails.  Omni Analysis; Department of the 
Navy--Recon., 68 Comp. Gen. 559, 562 (1989), 89-2 CPD  para.  73 at 3-4, 
except for costs allocable to a losing protest issue that is so 
clearly severable as to essentially constitute a separate protest.  
Price Waterhouse--Claim for Costs, B-254492.3, July 20, 1995, 95-2 CPD  para.  
38 at 3.  

All of the issues raised by CNA were intertwined parts of CNA's 
objection to the agency's evaluation of proposals and its decision to 
award the contract to GeneSys.  All issues raised and arguments made 
by CNA were directed at the reasonableness of the agency's evaluation 
and whether that evaluation was consistent with the RFP's stated 
scheme.  In this regard, the RFP required the Corps to evaluate 
experience as part of the management evaluation and specifically 
stated that TAMMIS interface experience was required.  Accordingly, 
CNA argued not only that the evaluation of its own proposal was 
unreasonable, but that the evaluation of GeneSys's proposal was 
unreasonable as well, and, in pursuing the protest, CNA's attorney was 
required to examine the record of both its own and the awardee's 
evaluation.  When we sustained the protest on the TAMMIS requirement 
issue, we recommended that the Corps reopen discussions and allow 
offerors to submit revised proposals in response to the relaxed 
experience requirement.  While we did not need to resolve the other 
issues concerning the Corps's downgrading CNA's proposal, we noted 
that the Corps had never discussed those alleged deficiencies with CNA 
and suggested that the Corps do so during the reopened discussions.  
Therefore, the other issues raised by CNA are not so distinct from the 
TAMMIS experience issue as to constitute different protests, and we 
recommend that CNA be reimbursed the costs of pursuing all protest 
issues.  Fritz Cos., Inc.--Claim for Costs, 73 Comp. Gen. 250, 252 n.1 
(1994), 94-2 CPD  para.  58 at 3 n.1.  

We next examine the components of CNA's claim for the costs of filing 
and pursuing the protest.  The legal expenses billed to CNA by its 
attorney, totaling $28,029, were comprised of $1,155 for miscellaneous 
expenses (charges for such items as photocopying, telecopying, on-line 
legal research services, and Federal Express delivery services) and 
$26,874 in legal fees.[4]  The remainder of the claim, totaling 
$34,703, represents the time expended by CNA's and its subcontractors' 
employees, and by a consultant (a former employee of CNA), allegedly 
incurred in pursuit of the protest.[5]

We recommend CNA be reimbursed $1,069 for miscellaneous expenses.  
From the total amount claimed ($1,155), we have deducted $62.50 for 
Westlaw Dun & Bradstreet usage charges on January 4, 1996; presumably, 
a Dun & Bradstreet report would have been useful to CNA in connection 
with the size status protest it was pursuing before the SBA at that 
time, but obtaining such a report would not appear to have been part 
of pursuit of a protest filed with our Office.  We have also deducted 
$23.50 for unknown expenditures made in June for which no invoice or 
other documentation has been submitted.  All other charges for 
miscellaneous expenses are allowed because CNA's attorney has 
certified that his firm incurred the expenses and has provided 
invoices showing that these expenditures were related to the protest 
and were, in fact, charged to CNA, and because we have no basis to 
question the reasonableness of the claimed amounts.  

We recommend that CNA be reimbursed $26,079 for legal fees.[6]  From 
the total amount claimed ($26,874), we have deducted $795 as follows:

     1.  The attorney billed CNA for 2 hours of his time on January 22 
     to review the RFP and "prepare letter regarding requirements for 
     debriefing."  We disallow this portion of the claim because 
     preparation for the debriefing conference, which was held on 
     February 1, was not time expended in pursuit of the protest.  We 
     therefore deduct $520 (2 hours at the attorney's rate of $260 per 
     hour).

     2.  The attorney billed CNA for 4 hours of his time on January 31 
     for work on a variety of matters, including reviewing the SBA 
     decision on CNA's size protest; the time spent on each matter is 
     not delineated.  We disallow 1 hour of this claim because time 
     spent reviewing the SBA decision cannot reasonably be construed 
     as time spent in pursuit of the protest.  We therefore deduct 
     $260 (1 hour at the attorney's rate of $260 per hour).

     3.  The attorney billed CNA for 0.3 hours on February 2 for time 
     spent by a paralegal assistant doing research on the SBA matter.  
     This was not time spent in pursuit of the protest.  We therefore 
     deduct $15 (0.3 hours at the paralegal's rate of $50 per hour).

Regarding the $34,703 claim for 274.5 hours allegedly spent by CNA's 
own employees, its subcontractors' employees, and the consultant, the 
Corps argues generally that the hours claimed are excessive and that 
they are not adequately documented.  

A protester seeking to recover the costs of pursuing its protest must 
submit sufficient evidence to support its monetary claim.  JAFIT 
Enters., Inc.--Claim for Costs, B-266326.2, B-266327.2, Mar. 31, 1997, 
97-1 CPD  para.  125 at 2.  The amount claimed may be recovered to the 
extent that the claim is adequately documented and is shown to be 
reasonable; a claim is reasonable if, in its nature and amount, it 
does not exceed that which would be incurred by a prudent person in 
pursuit of the protest.  Id. 

In view of our recommendation that CNA be reimbursed for only about 
102 hours of its attorney's time spent in filing and pursuing the 
protest, we agree with the Corps that CNA's claim for 274.5 additional 
hours spent by its own employees and those of its subcontractors and a 
consultant is excessive.  We note that the protected protest documents 
were releasable only to individuals admitted to the protective order 
issued by our Office, and thus the in-house employees (who were not 
admitted to the protective order) had no access to significant 
portions of the record.  Moreover, CNA has provided very little 
documentation to support this portion of its claim.  In fact, the sole 
supporting document consists of a matrix showing only the employees' 
names, terse and very general descriptions of the type of work that 
each employee was doing over time periods of a week or two, and the 
total number of hours that the employees allegedly worked during those 
time periods.  The matrix contains no detailed descriptions showing 
how the work related to the protest, and the matrix aggregates the 
hours worked on several different tasks for each employee within each 
time period.  Also, there are no timesheets or statements from any of 
the employees showing the amount of time or what they were doing in 
pursuit of the protest.  

Nonetheless, reviewing the protester's documentation in light of its 
attorney's invoices and the record compiled during development of the 
protest, we recommend that CNA be reimbursed $9,654.50 for time 
expended by its own employees, its subcontractors' employees, and the 
consultant in pursuing the protest.[7]  Specifically, from the total 
amount claimed ($34,703), we recommend deducting a total of $25,048.50 
as follows:

     1.  CNA claimed a total of 118 hours for work that was done in 
     preparation for and during the debriefing conference.  We 
     recommend disallowing these hours because they were not 
     reasonably incurred in pursuit of the protest.  See Princeton 
     Gamma-Tech, Inc.,--Claim for Costs, 68 Comp. Gen. 400, 403-404 
     (1989), 89-1 CPD  para.  401 at 5.  In fact, CNA's initial protest 
     letter, which was filed shortly after the debriefing conference 
     was held, specifically stated that CNA learned its protest bases 
     during the debriefing conference.  Thus, the debriefing 
     conference was a reasonable starting point for work on the 
     protest.  We therefore recommend disallowing $14,057.70 
     representing these 118 hours.    

     2.  CNA claimed a total of 156.5 hours for work that was done 
     subsequent to the filing of the protest.  With the exception of 
     time claimed by one subcontractor employee, these hours appear to 
     be reasonable.  However, that one employee claimed that he spent 
     106 hours on protest-related work (such as responding to the 
     attorney's requests for information, reviewing briefs submitted 
     by the agency and the intervenor, reviewing the agency's report, 
     and reviewing CNA's attorney's work products).  While these tasks 
     relate to the protest, we consider the amount of time claimed to 
     be excessive, especially in view of the fact that the hours 
     claimed exceed those allowed for the attorney and because an 
     employee of the protester was doing this same work and had 
     claimed 38 hours for doing so.  Furthermore, as much of the 
     record was covered by a protective order, most of this work 
     should have been accomplished by the attorney.  Since we believe 
     that a prudent person would have relied on the protester's 
     attorney to do this work, and because this work duplicates work 
     claimed by the protester's employee, we recommend that only a 
     fraction of this time be allowed.  See Fritz Cos., Inc.--Claim 
     for Costs, supra, at 7.  After reexamining the various dismissal 
     requests, briefs, and other documents in the original protest 
     record, we consider 20 hours to be a more reasonable estimate of 
     the time necessary to do the work claimed.  See JAFIT Enters., 
     Inc.--Claim for Costs, supra, at 3-4.  We, therefore, recommend 
     disallowing $10,990.80, representing 86 hours claimed by this 
     employee.

We also recommend that CNA be reimbursed an additional $1,170 
representing the attorney's fees (4.5 hours at a rate of $260 per 
hour) for pursuing this claim for protest costs before our Office.  4 
C.F.R.  sec.  21.8(f)(2) (1997).

Accordingly, we recommend that CNA be reimbursed $37,972.50 as the 
reasonable costs of filing and pursuing the protest and the cost of 
pursuing this claim.  This sum includes:

     1.  $1,069 for its miscellaneous expenses;

     2.  $26,079 for legal fees; 

     3.  $9,654.50 for time spent by employees and a consultant; and

     4.  $1,170 for the cost of pursuing this claim for protest costs.  

Comptroller General 
of the United States

1. For a full discussion of the facts and our rationale in sustaining 
CNA's protest, see CNA Indus. Eng'g, Inc., B-271034, June 7, 1996, 
96-1 CPD  para.  279. 

2. The reduction represented costs associated with a size status 
protest brought by CNA before the Small Business Administration (SBA) 
in connection with the award to GeneSys and improperly included in the 
initial claim for protest-related costs.

3. Under the Bid Protest Regulations in effect at that time, 4 C.F.R.  sec.  
21.2(a)(2) (1996), a protester had to file its protest within 14 days 
after it knew or should have known its protest basis.

4. The legal fees represented 105.7 hours spent by the attorney and 
two paralegal assistants; the billing rate for the attorney's hours 
was $260 per hour and the billing rate for the paralegal assistants 
was either $45 or $50 per hour.  Of the hours claimed, we find, as 
discussed below, that 102.4 hours were spent in pursuit of the 
protest.

5. The claim represents a total of hours 274.5 hours allegedly spent 
by CNA's employees and its subcontractors' employees and a consultant 
at hourly rates ranging from $15 to $67.50 per hour.  CNA and its 
subcontractors have added between 150 and 200 percent overhead to the 
hourly rates.  While the Corps contends that the overhead is 
excessive, CNA has provided documentation supporting the overhead 
rates, and we have no basis for finding them unreasonable.

6. The Corps argues that $260-per-hour attorney's fee is excessive.  
Since the protester's attorney's office is located in Richland, 
Washington, the Corps argues that the attorney's fees should be 
limited to the prevailing rate of law firms in that area.  The Corps 
states that it contacted a lawyer from a town adjacent to Richland, 
discussed CNA's protest issues with that lawyer, and ascertained that 
the prevailing rate should be no more than $165 per hour.  CNA's 
attorney points out that his law firm, Davis Wright Tremaine, has a 
national practice, with offices in a number of cities throughout the 
United States, and he contends that his fee is typical of other 
national law practices specializing in government contracts; he has 
sworn that he charged CNA his customary rate of $260 per hour, which 
is the rate established by the executive committee of his firm.  We do 
not think that the $260-per-hour rate is unreasonable, since it is 
well within the normal range charged by large law firms practicing 
before our Office.  Moreover, because CNA is a small business, it is 
not subject to the general statutory limit of $150 per hour for 
attorneys' fees.  31 U.S.C.  sec.  3554(c)(2) (1994).

7. The Corps argues that the time expended by the subcontractors 
employees is not reimbursable.  However, the record shows that the 
subcontractors were acting in concert with CNA in pursuing the 
protest, and CNA has stated that it is obligated to reimburse the 
subcontractors if it receives reimbursement from the government.  A 
protester may properly be reimbursed for such costs if otherwise 
payable.  TMC, Inc.--Claim for Costs, 69 Comp. Gen. 199, 201 (1990), 
90-1 CPD  para.  111 at 3.