TITLE:  Inter-Con Security Systems, Inc.; CASS, a Joint Venture--Costs, B-284534.7; B-284534.8, March 14, 2001
BNUMBER:  B-284534.7; B-284534.8
DATE:  March 14, 2001
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Inter-Con Security Systems, Inc.; CASS, a Joint Venture--Costs, B-284534.7;
B-284534.8, March 14, 2001

Decision

Matter of: Inter-Con Security Systems, Inc.; CASS, a Joint Venture--Costs

File: B-284534.7; B-284534.8

Date: March 14, 2001

James J. Regan, Esq., Thomas P. Humphrey, Esq., John E. McCarthy, Esq.,
Daniel R. Forman, Esq., and Jennifer L Pomeranz, Esq., Crowell & Moring, and
Neil H. O'Donnell, Esq., and Allen Samelson, Esq., Rogers, Joseph, O'Donnell
& Quinn, for Inter-Con Security Systems, Inc.; Joseph J. Petrillo, Esq., and
Karen D. Powell, Esq., Petrillo & Powell, for CASS, a Joint Venture.

Richard J. Webber, Esq., Matthew S. Perlman, Esq., and David A. Vogel, Esq.,
Arent Fox Kintner Plotkin & Kahn, for Wackenhut Services, Inc.
Dennis J. Gallagher, Esq., Department of the State, for the agency.

Guy R. Pietrovito, Esq., and James A. Spangenberg, Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

  1. General Accounting Office (GAO) recommends that protesters be
     reimbursed the reasonable costs of filing and pursuing their protests
     challenging the evaluation and selection process where the contracting
     agency unduly delayed taking corrective action in response to the
     protests, which were clearly meritorious; corrective action was taken
     only after a GAO attorney conducted "outcome prediction" alternative
     dispute resolution.
  2. The Federal Acquisition Streamlining Act of 1994 provides the head of
     an executive agency with the authority to pay protest costs and
     proposal preparation costs where, in connection with a protest, the
     head of the agency determines that a solicitation, proposed award, or
     award does not comply with the requirements of law or regulation.

DECISION

Inter-Con Security Systems, Inc. and CASS, a Joint Venture, request that we
recommend that the firms be reimbursed the costs of filing and pursuing
their protests challenging the award of a contract to Wackenhut Services,
Inc. by the Department of State (DOS) under request for proposals No.
S-OPRAQ-99-R-0001 for uniformed protective services for domestic DOS
facilities.

We recommend that DOS reimburse Inter-Con and CASS their protest costs.

The RFP provided for the award of an indefinite-delivery/indefinite-quantity
contract to provide uniformed protective services at various locations for a
base year with
4 option years. A cost/technical tradeoff basis for award was provided, and
the RFP listed the following evaluation factors in descending order of
importance: technical/management; relevant experience/past performance; and
cost/price. With respect to cost/price, offerors were informed that
cost/price would be evaluated for reasonableness and cost realism.

Proposals were received from a number of firms, including Inter-Con, CASS,
and Wackenhut, whose proposals were included in the competitive range.
Discussions were conducted, and revised proposals received. Wackenhut's
proposal was selected to receive award, and Inter-Con and CASS protested to
our Office (B-284534.3, B-284534.4, B-284534.5, B-284534.6).

Inter-Con and CASS challenged the technical evaluation, cost realism
evaluation, conduct of discussions, and source selection decision. The
agency filed a report responsive to the protests, and the protesters and
intervenor filed comments on the agency's report.

On January 19, 2001, after receipt of the comments, the General Accounting
Office (GAO) attorney handling the protests conducted an "outcome
prediction" alternative dispute resolution (ADR) conference with the
parties. [1] The parties were informed that from our review of the record,
including the parties' arguments, it was clear that there was a core problem
with the agency's procurement actions relating to the agency's price
evaluation that infected the agency's selection decision. [2] We also
expressed significant concern with the agency's conduct of discussions in
this respect. In sum, the parties were informed that the likely outcome of
the protests was that the protests would be sustained. They were also
informed that the likely protest recommendation would be to reopen the
competition, conduct new discussions that would inform offerors of the basis
upon which their price proposals would be considered and that would obtain
sufficient information to allow a reasonable assessment of cost realism, and
make a new source selection decision.

On January 23, the DOS informed us and the parties that the agency had
decided to take corrective action in response to the protests by reopening
the competition and amending the solicitation. On January 26, we dismissed
Inter-Con's and CASS's protests as academic.

Inter-Con and CASS now request that we recommend pursuant to section 21.8(e)
of our Bid Protest Regulations the reimbursement of their costs of filing
and pursuing the protests. 4 C.F.R. sect. 21.8(e) (2000). In response to our
request for a response from the agency, DOS does not contend that Inter-Con
and CASS should not be reimbursed for the firms' protest costs but states
that:

we do not feel that we can safely proceed as a matter of appropriations law
to pay protest cost in the absence of a recommendation by GAO that protest
costs be paid in these specific cases. Accordingly, the Department of State
requests that the GAO issue a recommendation as to whether the protesters
should be paid their costs of filing and pursuing their protests.

Letter from DOS to GAO (Feb. 22, 2001).

Where a procuring agency takes corrective action in response to a protest,
our Office may recommend that the agency reimburse the protester its protest
costs 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, thereby causing protesters to expend unnecessary time
and resources to make further use of the protest process in order to obtain
relief. Pemco Aeroplex, Inc.--Recon. and Costs, B-275587.5, B-275587.6, Oct.
14, 1997, 97-2 CPD para. 102 at 5. A protest is clearly meritorious when a
reasonable agency inquiry into the protest allegations would show facts
disclosing the absence of a defensible legal position. The Real Estate
Ctr.--Costs, B-274081.7, Mar. 30, 1998, 98-1 CPD para. 105 at 3. As noted above,
a GAO attorney will inform the parties through outcome prediction ADR that a
protest is likely to be sustained only where there is a high degree of
confidence regarding the outcome, such that the willingness to provide an
outcome prediction is generally an indication that the protest is viewed as
clearly meritorious. See York Bldg. Servs., Inc.; Olympus Bldg. Servs.,
Inc.--Costs, B-282887.10, B-282887.11, Aug. 29, 2000, 2000 CPD para. 141 at 4;
Millar Elevator Servs. Co.--Costs, B-284870.3, Aug. 3, 2000, 2000 CPD para. 126
at 3.

There is no dispute here that the protests were clearly meritorious and that
the agency unduly delayed taking corrective action. Accordingly, we
recommend that Inter-Con and CASS be reimbursed the reasonable costs of
filing and pursuing their protests, including those costs incurred here for
requesting a recommendation for costs. York Bldg. Servs., Inc.; Olympus
Bldg. Servs.--Costs, supra, at 6. The protesters should file their certified
claims for costs with DOS within 60 days after receipt of this decision. 4
C.F.R. sect. 21.8(f)(1).

With respect to DOS's concern with their authority to reimburse protesters
for the costs of filing and pursuing protests at GAO in the absence of a
recommendation from our Office, the Federal Acquisition Streamlining Act of
1994, sect. 1066, 41 U.S.C. sect. 253b(l) (Supp. IV 1998), provides that if, in
connection with a protest, the head of an executive agency determines that a
solicitation, proposed award, or award does not comply with the requirements
of law or regulation, the agency head may pay the costs described within
section 3554(c)(1) of title 31 of the United States Code (protest costs and
proposal preparation costs) within the limits stated in section 3554(c)(2).
See also Federal Acquisition Regulation sect. 33.102(b). This provides the
agency with authority for the payment of costs in connection with a protest
even in the absence of a recommendation from our Office.

Anthony H. Gamboa

General Counsel

Notes

1. In outcome prediction ADR, the GAO attorney handling a protest convenes
the parties, at their request or at GAO's initiative, and informs the
parties what the GAO attorney believes the likely outcome will be, and the
reasons for that belief. A GAO attorney will engage in this form of ADR only
if she or he has a high degree of confidence regarding the outcome. Where
the party predicted to lose the protest takes action obviating the need for
a written decision (either the agency taking corrective action or the
protester withdrawing the protest), our Office closes the case. Although the
outcome prediction reflects the view of the GAO attorney, and generally that
of a supervisor as well, it is not an opinion of our Office, and it does not
bind our Office, should issuance of a written decision remain appropriate.

2. During the ADR conference, the GAO attorney identified specific facts
supporting the outcome prediction. This information was subject to a
protective order issued in connection with these protests. Given that and
that this procurement is subject to further competition, this decision is
necessarily general.