BNUMBER:  B-275798.3 
DATE:  July 9, 1997
TITLE: Custom Printing Company--Request for Costs, B-275798.3, July
9, 1997
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Matter of:Custom Printing Company--Request for Costs

File:     B-275798.3

Date:July 9, 1997

Raymond Fioravanti, Esq., and Daniel B. Abrahams, Esq., Epstein Becker 
& Green, P.C., for the protester.
Kerry L. Miller, Esq., Government Printing Office, for the agency.
Behn Miller, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protester's request to recover the costs of filing and pursuing its 
protest challenging an agency's evaluation of bid prices is granted 
where the agency failed to promptly or adequately investigate the 
clearly meritorious protest allegations questioning the propriety of 
the agency's calculations, and only took corrective action 3 weeks 
before the decision due date.

DECISION

Custom Printing Company (CPC) requests that we recommend it recover 
the costs of filing and pursuing its protest challenging the 
evaluation of bid prices under invitation for bids (IFB) No. 1513-P, 
issued by the Government Printing Office (GPO) for the production and 
distribution of various Army publications.

We grant the request.

The IFB was issued on October 9, 1996, and contemplated the award of a 
1-year contract to the responsible bidder submitting the 
lowest-priced, responsive bid.  The IFB advised bidders that GPO would 
determine the lowest bid by applying the unit prices submitted in each 
bidder's itemized pricing schedule to a corresponding list of 
estimated production quantities set forth at page 18 of the IFB.  The 
solicitation also advised bidders that "[t]ransportation charges"--the 
cost of shipping the publications from the contractor's production 
facility to the designated delivery site--"are a factor in determining 
award" and required bidders to "state the location of the plant from 
which [the publications] will be shipped."

By the November 8 bid opening date, five bids were received.  On 
November 13, the contracting officer asked the agency's transportation 
management section (TMS) to calculate the transportation charges to be 
added to each bidder's total price.  Using 50 delivery orders issued 
under the predecessor contract for this requirement--which were 
randomly selected by TMS--TMS provided the contracting officer with a 
list of "estimated shipping charges" for each bidder.  After adding 
each bidder's estimated transportation charges to its bid, the 
contracting officer determined that Braceland Brothers was the 
apparent low bidder, and CPC was the second lowest-priced bidder.  

Most of the publications required under this contract (approximately 
90 percent) are to be delivered to St. Louis, Missouri.  CPC's 
production facility is located in Owensville, Missouri, and in its bid 
CPC stated that "all shipments will be made to St. Louis at no 
additional cost to the government."  In contrast, Braceland Brothers's 
bid did not offer any transportation rate discounts; moreover, 
Braceland Brothers's bid stated that all shipments would be made from 
an Atlanta, Georgia facility.

On November 20, after learning that GPO intended to award the contract 
to Braceland Brothers, CPC--which was the incumbent for this 
requirement--filed an agency-level protest with the contracting 
officer.  CPC contended that "[a] review of the print orders which we 
have produced over the past two years indicates to us that Braceland 
Brothers' freight assessment should be much larger than ours."  CPC 
also provided a detailed breakdown of its transportation charge 
calculations and, relying on this breakdown, argued that the agency's 
apparently different pricing evaluation results "seem[] to be skewed."

On November 27, in exchange for the contracting officer's promise that 
the agency would reassess its evaluated transportation costs, CPC 
withdrew its protest.  The contracting officer then forwarded a copy 
of CPC's withdrawn agency-level protest to TMS and asked for a 
recalculation of the bidders' transportation costs.  Using the 
estimated quantities and destination sites set forth in 107 purchase 
orders from the predecessor contract, TMS provided a second set of 
"estimated shipping charges" for each bidder.  After reviewing this 
list, the contracting officer once again determined that Braceland 
Brothers was the low bidder, and that CPC was the second lowest-priced 
bidder.  On December 11, the agency awarded the contract to Braceland 
Brothers.

On December 6 and 11, CPC filed a second agency-level protest which 
set forth a pricing "breakdown of the shipments on a per destination 
basis" and requested additional details from the agency regarding its 
pricing evaluation.  In its protest, CPC asked to "find out exactly 
how the [freight] rates were calculated for the shipments."  On 
December 19, CPC filed a protest at our Office which essentially 
reiterated its agency-level protest grounds.  CPC's protest stated 
that "[d]espite CPC's best efforts, it has not been able to learn the 
basis for the GPO's estimated shipping cost computations."

GPO submitted its report on the protest to our Office on January 21, 
1997.  In its report, GPO explained that TMS based its transportation 
charge estimates on quantities and destinations set forth in 157 
delivery orders issued under the predecessor contract, and further 
maintained that the contracting officer was entitled to rely on the 
TMS calculation.[1]  The agency also stated:

     "We believe the evaluation method used in the instant 
     solicitation was as realistic and accurate a method as possible.  
     [Citation omitted.]  The [c]ontracting [o]fficer's analysis used 
     actual weights and destinations from 157 orders under the 
     contract the previous year.  The TMS analysis also used actual 
     transportation costs derived from tariffs on file.  If the 
     protester knows of another, more accurate method of estimating 
     transportation costs, it has yet to proffer it."

In its report, GPO also asserted that "Custom has presented no 
evidence which would challenge either the method or result of the 
[pricing] evaluation."

On February 3, CPC filed a supplemental protest based upon the 
explanation set forth in the agency report.  CPC contended that the 
agency had deviated from the pricing evaluation scheme in the IFB by 
using delivery orders issued under the predecessor contract instead of 
the estimates set forth at page 18 of the IFB to calculate each 
bidder's transportation costs.

On February 6, this Office held a telephone conference with the 
parties and issued a written request for the agency to respond to 
several questions.  First, we asked GPO to explain the computation 
used by TMS to calculate each bidder's transportation costs; although 
GPO had explained the TMS  methodology, no supporting analysis--for 
example, the actual quantity estimates or delivery destination points 
culled from the randomly selected delivery orders--was provided.  
Additionally, our Office asked:

     ". . . if the current shipping charges are applied to the 
     estimates set forth in the current solicitation, is Braceland 
     still the low bidder?  In this regard, why doesn't the GPO agree 
     with the protester's argument that the freight/shipping costs 
     should be calculated based on the current solicitation 
     estimates?"

On February 12, GPO responded with a supplemental agency report which 
stated, in part:

     "[i]t is impossible to take the estimates contained in the 
     current solicitation at page 18 and use them to directly estimate 
     freight costs.  The estimates in the solicitation are stated in 
     the aggregate for a 12 month period.  Actual shipments under 
     Program 1513-S are of much smaller quantities to many different 
     destinations.  Therefore, using the past year's actual shipments 
     for weight and destinations, is the most accurate way to predict 
     the 1996-1997 weights and destinations for purposes of estimating 
     transportation costs."

On February 14, CPC filed its comments on GPO's supplemental report.  
CPC reiterated its position that the agency's pricing evaluation 
deviated from the evaluation scheme set forth in the IFB--which 
required the agency to evaluate each bidder's proposed pricing using 
the estimates set forth at page 18 of the IFB.  On February 19, this 
Office advised the parties that we required a hearing to address this 
issue.  On February 25, the eve of the scheduled hearing, GPO advised 
that it was contemplating corrective action and that it was 
reevaluating CPC's and Braceland Brothers's pricing.  On March 13, a 
little more than 2 weeks before the  statutory due date (March 31) for 
a decision on the protest, GPO terminated Braceland Brothers's 
contract and made award to CPC.  That same day, CPC filed this request 
for reimbursement of its protest costs.

When an agency takes corrective action prior to our issuing a decision 
on the merits, we may recommend that the protester recover the 
reasonable costs of filing and pursing the protest.  Bid Protest 
Regulations, 4 C.F.R.  sec.  21.8(e) (1997).  We will make such a 
recommendation where, based on the circumstances of the case, we 
determine that the agency unduly delayed taking corrective action in 
the face of a clearly meritorious protest.  Holiday 
Inn-Laurel--Protest and Request for Costs, B-270860.3; B-270860.4, May 
30, 1996, 96-1 CPD  para.  259 at 4.

In this case, GPO does not dispute that its corrective action was 
taken in response to CPC's meritorious protest.  Instead, GPO argues 
that its corrective action was not unduly delayed because "it was not 
until the filing of the protester's comments on the agency report that 
the protester first clearly articulated its position."  GPO also 
asserts that the contracting officer's decision to "reconsider his 
position" was not unduly delayed because the protest "was not a simple 
matter, as it involved reviewing 157 prior [delivery] orders, each 
with multiple delivery destinations and bills of lading."

In considering a protester's request for reimbursement of its protest 
fees and costs by the contracting agency, the determinative question 
for this Office is whether the agency's corrective action was prompt 
under the circumstances.  Ostrom Painting & Sandblasting, 
Inc.--Entitlement to Costs, 72 Comp. Gen. 207, 210 (1993), 93-1 CPD  para.  
390 at 4.  In this case, we conclude that GPO unduly delayed taking 
corrective action.

CPC's December 19 protest to this Office clearly called into question 
"the basis for the GPO's estimated shipping cost computations."  CPC's 
February 6 supplemental protest--filed after it received the first 
detailed explanation of the evaluation method used, set out in the 
agency report on the initial protest--clearly challenged the agency's 
reliance on orders from the predecessor contract rather than the 
estimates in the IFB.  Similarly, the questions to the agency issued 
by our Office raised this issue.  In fact, the excerpts from the 
initial and supplemental agency reports, quoted above, themselves 
indicate that the agency was aware that the protester was challenging 
its decision to calculate transportation costs based on actual orders 
under the prior contract rather than on the IFB estimates.  Thus, 
contrary to the agency's assertion that it was unable to ascertain any 
basis for corrective action until after it received CPC's comments on 
the agency report on the supplemental protest, the record clearly 
shows that the issue which prompted the agency's corrective action was 
squarely presented early in the protest process.[2]

GPO also asserts that the complexity of reviewing the 157 delivery 
orders from which the agency's evaluation results were initially 
derived prevented a more prompt response.  We find this argument 
unpersuasive since it was not the detailed calculations derived from 
the agency's methodology but the methodology itself--that is, using 
orders under the prior contract instead of the IFB estimates--that was 
inconsistent with the IFB and thus was the source of the impropriety 
on which the corrective action was based.

In sum, we conclude that by waiting until March 13--almost 1 month 
after receiving CPC's February 14 comments on the agency's 
supplemental report--the agency unduly delayed taking corrective 
action.  Accordingly, we recommend that CPC recover the costs of 
filing and pursuing the protest, including reasonable attorneys' fees.  
CPC should submit its claim for costs, detailing and certifying the 
time expended and costs incurred, directly to the agency within 60 
days of receipt of this decision.  4 C.F.R.  sec.  21.8(f)(1).

The request is granted.

Comptroller General
of the United States

1. The protester received its copy of the agency report on January 23, 
and at that time first learned how TMS calculated the challenged 
transportation charge estimates.

2. As noted above, CPC first raised its concerns about the 
transportation charge calculations in its November 19 agency-level 
protest.  While the fact that an issue is brought to the agency's 
attention before the protest is filed at our Office is not dispositive 
of the promptness of subsequent corrective action, we think the 
agency's apparent failure to confirm in response to a detailed 
agency-level protest that it had followed the solicitation's 
evaluation scheme supports our conclusion that the agency did not act 
promptly here.  See Griner's-A-One Pipeline Servs., Inc.--Entitlement 
to Costs, B-255078.3, July 22, 1994, 94-2 CPD  para.  41 at 6, n. 3.