BNUMBER:  B-278051.2 
DATE:  April 27, 1998
TITLE: Browning-Ferris Industries of Hawaii, Inc.--Costs, B-
278051.2, April 27, 1998
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Matter of:Browning-Ferris Industries of Hawaii, Inc.--Costs

File:     B-278051.2

Date:April 27, 1998

Kenneth D. Brody, Esq., McMahon, David & Brody, for the protester.
Marian E. Sullivan, Esq., Department of the Air Force, for the agency.
C. Douglas McArthur, Esq., and Christine S. Melody, Esq., Office of 
the General Counsel, GAO, participated in the preparation of the 
decision.

DIGEST

General Accounting Office recommends that protester be reimbursed the 
costs of filing and pursuing its protest where agency unduly delayed 
taking corrective action in the face of a clearly meritorious protest; 
protest is clearly meritorious when a reasonable agency inquiry into 
the protester's allegations would have revealed that estimates in the 
solicitation had no reasonable basis.

DECISION

Browning-Ferris Industries of Hawaii, Inc. (BFI) requests that we 
recommend that it be reimbursed the costs of filing and pursuing its 
protest challenging the terms of request for proposals (RFP) No. 
F64605-97-R-0017, issued by the Department of the Air Force for waste 
disposal services at Hickam Air Force Base in Hawaii.

We grant the request.

The agency issued the solicitation on July 16, 1997, for a fixed-price 
contract for collection, transportation, and disposal of waste from 
industrial/medical (IND/MED) facilities and military family housing 
(MFH) at Hickam for a 1-year base period, with four 1-year option 
periods.  The solicitation provided for a selection decision based on 
price and technical factors, with technical factors "significantly 
more important" than price.

The RFP provided a schedule for pickups from the MFH areas and 
provided for the contractor to submit a frequency schedule for pickup 
of IND/MED refuse.  RFP at 50-51.  In addition, page 53 of the RFP 
contained an "Unscheduled and/or Special Events" provision, advising 
offerors of a requirement to make certain unscheduled collections, 
upon notification from the agency's quality assurance evaluator.  
Services would include relocation and return of containers to and from 
"special events areas," supply and removal of additional containers, 
and the collection and disposal of contents.  Id.  The solicitation 
did not provide a list of "special events"; it contained estimates of 
total work load, based on historical records, but no breakdown showing 
how much of the total the regular pickups generated, as opposed to the 
proportion generated during unscheduled or special events.  See RFP at 
54.

The RFP contained two contract line item numbers (CLIN) for 
unscheduled/special event services, CLIN 0006, with seven sub-CLINs 
(0006AA-0006AG), for the IND/MED areas, and CLIN 0016, with three 
sub-CLINs (0016AA-0016AC), for the MFH areas.[1]  These CLINs 
contained estimated quantities for various sizes of containers.[2]

The solicitation required submission of offers by August 1.  The 
agency issued two amendments to the solicitation; the first, 
responding to questions from potential offerors, was issued on July 
25, on which date the agency also conducted a site visit.  The record 
contains no evidence that any offeror questioned the requirement for 
"special events" or the estimates for CLINs 0006 and 0016, or objected 
to the August 1 date for submission of proposals prior to that date.

On that date, five firms submitted offers under the RFP; the incumbent 
contractor, Technology Services International, Inc. (TSI), submitted 
the lowest price, with BFI's price second high.  In her selection 
decision, the contracting officer essentially concluded that BFI's 
proposal was technically equivalent to a third offeror's proposal, 
which was lower priced; she concluded, however, that the third 
offeror's higher rating relative to TSI's rating did not present an 
advantage justifying the payment of a premium over TSI's low price.  
She therefore selected TSI for award, and BFI filed a protest with our 
Office.

BFI first contended that the agency had selected the lowest-priced, 
acceptable offer, contrary to the terms of the RFP, which provided for 
a price/technical tradeoff.  Protest at 1, 6-7.  BFI also challenged 
the agency's evaluation of its proposal.  Id. at 1-2, 7-8.  In 
addition, BFI contended that TSI, as the incumbent, had special 
knowledge of the government's requirements, in particular those under 
CLINs 0006 and 0016, which TSI had offered to perform at "no cost."  
Id. at 2, 8-9.  As part of its argument that TSI had an unfair 
competitive advantage, BFI also complained that the short, 16-day 
period between the issuance of the RFP and the date set for receipt of 
initial offers deprived offerors other than TSI of the opportunity to 
gather enough information to be competitive.  Id. at 9.

On September 17, 5 days after the protest was filed, the agency filed 
a request for partial dismissal of this last ground of protest as 
untimely, based on BFI's failure to object to the schedule for 
submitting proposals, or to any unfair competitive advantage by the 
awardee, prior to the August 1 due date.  See 4 C.F.R.  sec.  21.2(a)(1) 
(1997) (protests based upon alleged improprieties in a solicitation 
which are apparent prior to the time set for receipt of initial 
proposals shall be filed prior to that time).  In response, BFI 
asserted that, until it learned of TSI's "no cost" offer for CLINs 
0006 AND 0016, it had no reason to suspect that the estimates for 
unscheduled/special events were inaccurate.  BFI letter dated 
September 22, 1997 at 2.  Therefore, BFI argued, its ground for 
protest was not apparent from the face of the RFP and in fact did not 
arise until after it had been allowed to review TSI's price.  Our 
Office denied the agency's request for dismissal.

The agency subsequently advised our Office that it had decided to 
reevaluate proposals, conduct discussions as necessary, and make a new 
selection decision based on the reevaluation.  Air Force letter dated 
September 26, 1997.  The Air Force requested that our Office dismiss 
BFI's protest as academic.  See East West Research, Inc.--Recon., 
B-233623.2, Apr. 14, 1989, 89-1 CPD  para.  379 at 1-2; Steel Circle Bldg. 
Co., B-233055, B-233056, Feb. 10, 1989, 89-1 CPD  para.  139 at 2 n.1 (our 
Office will not consider academic questions, such as where the agency 
has taken the requested corrective action).  BFI's response indicated 
that its concerns over the estimates for unscheduled/special events 
remained unresolved.  BFI letter dated October 1, 1997.  Although we 
dismissed as academic those portions of the protest pertaining to 
BFI's challenge to the evaluation and selection decision, we denied 
the agency's request to dismiss the protest in its entirety.

On October 16, the agency filed a third "renewed" request for summary 
dismissal, providing its first substantive response to BFI's challenge 
to the estimates in CLINs 0006 and 0016.  The agency stated that 
Hickam personnel had estimated approximately one special event per 
week and had developed the specific container estimates for the CLIN 
0006 and 0016 sub-CLINs on the basis of how many of each kind of 
container these special events would involve.  With regard to how the 
number of special events was calculated, the agency stated only that 
it had used its "best estimate and technical expertise," without 
further explanation.  Contracting officer's statement dated October 
15, 1997.  The agency stated that it had no further information 
regarding its requirements apart from the estimates provided in the 
RFP, but contended that any challenge to the validity of the estimates 
or the methodology for generating them would be untimely.  See 4 
C.F.R.  sec.  21.2(a)(1).  The protester responded, defending the 
timeliness of its challenge to the agency's estimates and raising a 
series of specific questions regarding the basis for the agency's 
estimates.

We again denied the agency's request to dismiss the protest and asked 
the Air Force to provide specific information on how many 
unscheduled/special events had been held under the prior contract, 
with a list of those events, as well as an explanation of any 
discrepancy between its prior experience and the current estimates.  
After several attempts to locate and question the individuals at 
Hickam who had prepared the estimates, the Air Force concluded that it 
lacked historical data to support the estimates and advised our Office 
of its decision to revise the solicitation by eliminating CLINs 0006 
and 0016.  By decision of December 10, we dismissed BFI's protest as 
academic in light of the agency's planned corrective action.  In that 
decision, we also denied an October 7 request for costs from the 
protester, which was based on the Air Force's earlier decision to take 
corrective action responsive to the two other issues in the protest 
regarding the evaluation and selection decision.  Also on December 10, 
BFI filed this request for reimbursement of its protest costs based on 
the agency's decision to take corrective action in response to its 
third ground of protest, regarding the estimates for the 
unscheduled/special events services.

Our Bid Protest Regulations provide that where the contracting agency 
decides to take corrective action in response to a protest, we may 
recommend that the protester be reimbursed the costs of filing and 
pursuing its protest, including reasonable attorneys' fees.  4 C.F.R.  sec.  
21.8(e).  As a prerequisite to our recommending that costs be 
reimbursed where a protest has been settled by corrective action, not 
only must the protest have been meritorious, but it also must have 
been "clearly meritorious," i.e., not a close question.  The Real 
Estate Ctr.--Costs, B-274081.7, Mar. 30, 1998, 98-1 CPD  para.      at 3.  A 
protest is "clearly meritorious" when a reasonable agency inquiry into 
the protester's allegations would show facts disclosing the absence of 
a defensible legal position.  Id.  Our rule is intended to prevent 
inordinate delay in investigating the merits of a protest and taking 
corrective action once an error is evident, so that a protester will 
not incur unnecessary effort and expense in pursuing its remedies 
before our Office.  David Weisberg--Entitlement to Costs, 71 Comp. 
Gen. 498, 501 (1992), 92-2 CPD  para.  91 at 4.

In opposing BFI's request, the Air Force asserts that it was our 
Office, not BFI, that raised questions regarding the accuracy of the 
Air Force's estimates for unscheduled/special events, and thus that 
the decision to take corrective action was not made in response to a 
meritorious protest.  Second, the Air Force essentially argues that 
our Office has already denied BFI's request for costs, in our December 
10 decision, and that the protester provides no basis for 
reconsideration of that decision.  See 4 C.F.R.  sec.  21.14(a) (to be 
considered, request for reconsideration must specify an error of law 
or information not previously considered in the initial decision).

The record here does not support the Air Force's arguments.  BFI's 
initial protest and its response to the Air Force's initial requests 
for dismissal were specifically based on BFI's assertion that TSI must 
have had information not provided to the other offerors regarding the 
agency's actual requirements for CLINs 0006 and 0016, for 
unscheduled/special events.  By letter dated October 1, the protester 
suggested a method of calculating better estimates for CLINs 0006 and 
0016--the use of "weight tickets" generated during unscheduled/special 
events.[3]  The agency's October 16 request for dismissal specifically 
responded to the protester's concerns about the accuracy of the 
estimates, explaining the agency's methodology for producing the 
estimates; in that letter, the agency recognized the weakness of those 
estimates, essentially defending its position on the ground that BFI's 
challenge was untimely filed after the receipt of initial proposals.  
Nor does the agency deny that its decision to take corrective action 
came in response to the query from our Office which, rather than 
raising a new issue, reiterated the concern about the estimates which 
had been raised by BFI.  The record therefore clearly demonstrates 
that the protester directed the agency's attention to the precise flaw 
that later led to the agency's corrective action.  Holiday 
Inn-Laurel--Protest and Request for Costs, B-270860.3, B-270860.4, May 
30, 1996, 96-1 CPD  para.  259 at 4, recon. denied, B-270860.5, July 18, 
1996, 96-2 CPD  para.  23 (protest costs may be recovered where corrective 
action was taken in response to queries from our Office bearing 
directly on issues raised in the protest).

Further, it is clear that here there are circumstances not considered 
in our initial decision, denying BFI's request for costs.  That 
decision was clearly limited to BFI's initial request, which was based 
on the Air Force's initial September 26 corrective action, taken 2 
weeks after the protest was filed in response to BFI's challenge to 
the evaluation and selection decision.  Since the Air Force had taken 
corrective action promptly in response to those two issues, there was 
no basis to recommend that BFI recover its protest costs at that time.  
See CDIC, Inc.--Entitlement to Costs, B-277526.2, Aug. 18, 1997, 97-2 
CPD  para.  52 at 1-2.  At the time of our initial decision, neither party 
had addressed the circumstances surrounding the Air Force's December 1 
decision to take further corrective action in response to the 
remaining issue in the protest, the challenge to the 
unscheduled/special events estimates in the RFP; BFI did not, in fact, 
make its request for costs until the day of our decision dismissing 
the protest on the basis of the agency's decision to cancel CLINs 0006 
and 0016.  These circumstances make it appropriate to consider BFI's 
December 10 request separately from its initial request for costs.

Although arguing that BFI did not raise the issue, the agency does not 
deny that there was merit to the contention that the solicitation 
estimates were inaccurate; given the agency's admission that there 
were no historical records to support the estimates in the 
solicitation, we find that BFI's protest was clearly meritorious.  
See, e.g., Beldon Roofing & Remodeling Co., B-277651, Nov. 7, 1997, 
97-2 CPD  para.  131 (sustaining protest where the agency was unable to 
establish that quantity estimates reflected anticipated requirements).  
The record here shows that the agency filed three requests for 
dismissal, two of them after we had already informed the Air Force 
that we were treating BFI's challenge to the estimates as timely.  
Despite the acknowledged validity of the protester's questions and the 
agency's own professed concerns about the estimates, the agency made 
no reasonable factual investigation of the basis for the estimates for 
more than 2 months after the filing of the protest.  That 
investigation occurred only in response to our questions, which 
essentially repeated those asked by the protester in its response to 
the agency's third motion to dismiss.  This delay frustrated the 
intent of the Competition in Contracting Act of 1984, 31 U.S.C.A.  sec.  
3554(a)(1) (West Supp. 1997), by impeding the economic and expeditious 
resolution of the protest.[4]  Griner's-A-One Pipeline Servs., 
Inc.--Entitlement to Costs, B-255078.3, July 22, 1994, 94-2 CPD  para.  41 
at 5-6.

We recommend that BFI be reimbursed its protest costs which relate to 
the issue of the unscheduled/special events services estimates in the 
RFP.[5]  BFI should submit its certified 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).

Comptroller General
of the United States

1. The RFP also contained "special event" CLINS for the option years.

2. For example, CLINs 0006AA-0006AD, for collection and disposal from 
the IND/MED areas of 4-, 6-, 8-, and 40-cubic yard containers, 
contained estimates of 52, 52, 200, and 200 containers each, 
respectively. 

3. It was the position of the agency, and later of the intervenor, 
that the unscheduled pickups would merely be additional stops on the 
regularly scheduled routes, so that the weight tickets--showing the 
amount of waste collected during the day--would shed no light on the 
proportion of refuse generated by unscheduled, as opposed to 
scheduled, pickups.

4. Our conclusion here does not change our view that an agency, in 
defending protests, is permitted to vigorously assert procedural and 
substantive defenses in good faith without having to risk the 
assessment of costs.  Carlson Wagonlit Travel--Entitlement to Costs, 
B-266337.3 et al., July 3, 1996, 96-2 CPD  para.  99 at 4.  An agency's 
pursuit of a reasonable procedural litigation strategy before our 
office does not constitute undue delay.  Id.

5. Since the corrective action at issue here was taken solely in 
response to this ground of protest--which is entirely severable from 
the two issues which prompted the earlier corrective action and for 
which we found that BFI may not recover its costs--our recommendation 
that BFI recover its costs is limited to the estimates issue.  See 
Holiday Inn-Laurel--Protest and Request for Costs, supra, at 3 n.2.