TITLE:   TRW, Inc.--Costs, B-282459.3, August 4, 1999
BNUMBER:  B-282459.3
DATE:  August 4, 1999
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TRW, Inc.--Costs, B-282459.3, August 4, 1999

Matter of: TRW, Inc.--Costs

File: B-282459.3

Date: August 4, 1999

John W. Chierichella, Esq., Anne B. Perry, Esq., and Timothy W. Staley,
Esq., Fried, Frank, Harris, Shriver & Jacobson, for the protester.

Raymond M. Saunders, Esq., Department of the Army, for the agency.

Christine Davis, Esq., and James Spangenberg, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Where General Accounting Office (GAO) attorney, in conducting
outcome-prediction alternative dispute resolution, advised parties that
protest issue related to agency's price evaluation would likely be sustained
(which led agency to take corrective action that rendered the entire protest
academic), but GAO attorney did not address other, separate issues involving
the technical evaluation, GAO does not recommend reimbursement of costs
associated with the technical evaluation issues.

DECISION

TRW, Inc. requests that our Office recommend that it be reimbursed the costs
of filing and pursuing an initial and supplemental protest challenging the
award of a contract to BTG, Inc. under request for proposals (RFP) No.
DASC01-98-R-0005, issued by the Department of the Army, for linguist
services. Because the agency has agreed to pay the costs associated with the
supplemental protest, only the costs of the initial protest are at issue
here.

We deny the request.

BACKGROUND

After learning of the award to BTG and receiving a debriefing, TRW protested
various aspects of the technical evaluation of proposals, which allegedly
undermined the price/technical tradeoff. [1] TRW received an agency report
in response to its protest, which disclosed the Army's price evaluation
methodology to TRW for the first time. Three days later, TRW filed a
supplemental protest claiming that, by using that methodology, the Army
failed to consider price as a significant evaluation factor, contrary to the
Competition in Contracting Act of 1984 (CICA), 10 U.S.C. sect.sect. 2305(a)(2)(A),
2305(a)(3)(A)(ii) (1994 & Supp. III 1997), and the RFP evaluation scheme.
The Army defended its price evaluation in a supplemental agency report.

Because TRW's supplemental protest appeared to be clearly meritorious, our
Office held what we refer to as an "outcome prediction" alternative dispute
resolution (ADR) conference, in which our attorney told the parties that it
was her view that the protest was likely to be sustained. At the conference,
our attorney expressed her view that the agency had failed to reasonably
calculate the prices of the competing proposals, because it applied no
estimated quantities to offerors' proposed labor rates, which were simply
added together as if each labor category would be used equally during
contract performance. The parties were advised that similar price
evaluations had been held improper by our Office. See Lockheed, IMS,
B-248686, Sept. 15, 1992, 92-2 CPD para. 180; Professional Carpet Serv.,
B-220913, Feb. 13, 1986, 86-1 CPD para. 158. Technical evaluation issues were
not discussed at the ADR conference because, unlike the price evaluation
issue, these issues did not fit squarely within established precedent and
because it was anticipated that corrective action taken with regard to the
price evaluation issue would render the technical evaluation issues
academic.

After the ADR conference, the Army offered to take corrective action.
Because the proposed corrective action sparked objections from TRW and
appeared to be unreasonable, our Office held a second ADR conference, after
which the Army proposed corrective action acceptable to the parties. First,
the Army proposed to determine each proposal's price by projecting offerors'
proposed labor rates based on reasonable, internal quantity estimates
reflecting its expected contract requirements; the Army did not offer to
amend the solicitation and accept revised proposals unless it was unable to
develop such reasonable, internal quantity estimates. Second, the Army
proposed to perform a new price/technical tradeoff considering the results
of the corrected price evaluation. Agency's Second Corrective Action Letter,
June 16, 1999, at 1. Based on the proposed corrective action, we dismissed
TRW's initial and supplemental protests as academic.

In dismissing TRW's initial protest as academic, our Office denied the
Army's request to issue a separate decision resolving the technical
evaluation issues before the agency performed a new price/technical
tradeoff. Agency's First Corrective Action Letter, June 7, 1999, at 2-3.
While we acknowledged the possibility that TRW might protest the same
technical evaluation issues if the agency ultimately confirmed BTG's award,
we stated that we would not resolve the technical evaluation issues prior to
the agency's corrective action. [2] We expressed no opinion as to the merit
of the technical evaluation issues, apart from encouraging the Army to
correct any technical evaluation errors it identified while implementing its
proposed corrective action.

REQUEST FOR COSTS AND RESPONSE

In its request for costs, TRW has asked our Office to recommend that the
Army pay the costs associated with both its initial and its supplemental
protests. In response, the Army has agreed to pay the costs associated with
the supplemental protest, but argues that TRW should bear the costs
associated with the initial protest. The Army contends that the two protests
are severable, that the clearly meritorious issue appears only in the
supplemental protest, and that the agency's proposed corrective action
pertains only to the improper price evaluation challenged in the
supplemental protest.

ANALYSIS

As a general rule, we recommend that a prevailing protester be reimbursed
the costs incurred with respect to all issues pursued, not merely those upon
which it prevails. Omni Analysis; Department of the Navy--Recon.,
B-233372.2, B-233372.3, July 24, 1989, 89-2 CPD para. 73 at 3-4. However, our
Office will limit its recommendation regarding a successful protester's
recovery of protest costs when a part of the costs is allocable to a losing
protest issue that is so clearly severable as to constitute a separate
protest. Price Waterhouse--Claim for Costs, B-254492.3, July 20, 1995, 95-2
CPD para. 38 at 3-4.

In our view, the protests here are clearly severable. In its supplemental
protest, TRW challenged the agency's price evaluation vis-ï¿½-vis the RFP
price evaluation scheme, CICA's price evaluation requirements, and precedent
from our Office analyzing price evaluation methodologies. TRW's initial
protest of the technical evaluation shared none of the facts or legal
theories forming the basis for the supplemental protest, but was essentially
based upon the agency's interpretation and scoring of offerors' technical
proposals vis-ï¿½-vis the RFP technical evaluation scheme.

TRW argues that its initial and supplemental protests are intertwined
because our Office declined to issue a separate decision on the technical
evaluation issues after the Army offered to take corrective action with
respect to the price evaluation issue. We disagree. The only feature common
to the initial and supplemental protests was that they both challenged the
award to BTG. This feature, while insufficient to intertwine the protests
for purposes of recovering protest costs, see id., rendered both protests
academic in light of the agency's proposed corrective action.

Specifically, any protest concerning the technical evaluation was, and
remains, academic unless the agency decides that the award should go to BTG
and the same technical evaluation issues remain and have a prejudicial
effect on TRW. If that occurs, it is possible that TRW will protest the same
technical evaluation issues raised in its initial protest. As noted above,
the agency has not committed to amend the solicitation, accept revised
proposals, or reevaluate technical proposals, but only to reevaluate price
and to incorporate the new price evaluation results into a new
price/technical tradeoff. If the agency confirms BTG's award without
revising the underlying technical evaluation, TRW might again protest the
same technical evaluation issues--and, if successful, might again request
protest costs. Such a prospect underscores the divisibility of TRW's initial
protest from its supplemental protest in this case.

For these reasons, we do not recommend that the agency reimburse TRW for
costs incurred in filing and pursuing its initial protest.

The request is denied.

Comptroller General
of the United States

Notes

1. The initial protest also challenged BTG's award eligibility on grounds of
an alleged conflict of interest, but TRW withdrew this allegation in its
comments responding to the initial agency report. Protester's Initial
Comments at 2.

2. We recognize that this case highlights a characteristic of our
outcome-prediction ADR: in predicting the outcome of the case, our attorney
may be able to address an issue where the outcome appears very clear (such
as the price evaluation challenge here), but will not be able to express an
opinion on an issue that is a closer call. Faced with that limited
prediction, the party who learns it will probably lose the protest may elect
to take action (withdrawing the protest, in the case of a predicted denial
of the protest, or taking corrective action, in the case of a predicted
sustain, as here) or it may decline to do so, in order to obtain a written
decision (which, in this case, would presumably have addressed both price
evaluation and technical evaluation issues).