TITLE:  Sodexho Management, Inc.--Costs, B-289605.3, August 6, 2003
BNUMBER:  B-289605.3
DATE:  August 6, 2003
**********************************************************************
Sodexho Management, Inc.--Costs, B-289605.3, August 6, 2003

   Decision
    
    
Matter of:    Sodexho Management, Inc.--Costs
    
File:             B-289605.3
    
Date:              August 6, 2003
    
Lars E. Anderson, Esq., Venable, Baetjer & Howard, for the protester.
David H. Turner, Esq., Naval Supply Systems Command, for the agency.
Tania Calhoun, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
1.  Request that agency reimburse protester for the costs it incurred in
pursuing an administrative appeal of the agency's cost comparison decision
under Office of Management and Budget Circular No. A-76 is denied because
such costs are not, as protester argues, part of its proposal preparation
costs; administrative appeals costs are tantamount to agency-level protest
costs, and GAO's authority to recommend reimbursement of protest costs
does not extend to costs incurred by a protester in litigating in another
forum.
    
2.  Protester should not be paid costs incurred in filing and pursuing
unsuccessful protest issues where those issues are readily severable from
a successful protest issue, which rested upon a different set of facts and
relied upon unrelated legal theories.
    
3.  Protester claiming reimbursement of the costs of preparing its
proposal and the costs of filing and pursuing its protest must submit
evidence sufficient to support its claim that those costs were incurred
and are reasonable and properly attributable to either proposal
preparation or the filing and pursuit of the protest; GAO recommends that
costs which are not adequately documented not be reimbursed, and that
claimed allowable costs which are aggregated with unallowable costs in a
way that does not permit segregation of allowable costs be disallowed in
their entirety.
    
4.  Request that Comptroller General recommend that an increase in the
cost of living justifies a fee higher than the statutory cap of $150 per
hour for attorneys' fees is granted where the protester alleges that the
cost of living has increased, as measured by the Department of Labor's
Consumer Price Index (CPI), and has presented a reasonable basis upon
which the adjustment should be calculated.
DECISION
    
Sodexho Management, Inc. requests that we determine the amount it should
recover from the Department of the Navy for the costs of preparing its
proposal and for the costs of filing and pursuing its protest of the
Navy's determination, pursuant to Office of Management and Budget (OMB)
Circular A-76, that it would be more economical to perform various
community services in-house at the Pensacola Naval Regional Complex in
Pensacola, Florida, rather than contract for these services with Sodexho
under request for proposals (RFP) No. N00140-00-R-G513. 
    

   We recommend that Sodexho be reimbursed $96,069.85 for the costs of
preparing its proposal and $31,943.52 for the costs of filing and pursuing
its protest, for a total of $128,013.37 out of its total claim of
$687,614. 
    
BACKGROUND        
    
The Navy issued the RFP on February 4, 2000, as part of a Circular A-76
commercial activities study, to determine whether it would be more
economical to perform various community support services in-house, using
government employees, or under contract with a private-sector firm.[1] 
After a private-sector competition, the Navy concluded that Sodexho's
proposal, the only acceptable private-sector proposal, represented the
best value to the government among the offers received from the private
sector.  The contracting officer, acting as the source selection authority
(SSA), ultimately concluded that the in-house management plan met the
requirements established by the PWS and offered the same level of
performance and performance quality as did the Sodexho proposal.  After
adjustments, Sodexho's total cost to contract for services was $82,641,457
as compared with the in-house plan's cost of $54,460,369, a difference of
$26,181,108.  Because the in-house plan's costs were more than $26 million
lower than Sodexho's adjusted costs, the agency made a tentative decision
to perform the requirements in-house.
    
Sodexho filed an administrative appeal on October 9, 2001.  The agency's
administrative appeal authority found merit in the appeal to the extent
that the MEO's pricing was found to be understated by approximately $1.6
million, but otherwise ratified the determination to perform the
requirements in-house.  The appeal was denied on December 10.  On December
27, Sodexho filed a protest in our Office challenging the administrative
appeal decision.  In view of the extensive number of protest allegations,
and the challenges faced by the Navy in responding to all of them within
the 30-day timeframe required by our regulations, the parties agreed to
handle the protest as a timely agency-level protest pursuant to Federal
Acquisition Regulation (FAR) S: 33.103, and Sodexho withdrew its GAO
protest.  The agency provided Sodexho with additional documents, and
Sodexho filed a supplemental agency-level protest on February 25, 2002. 
After the agency submitted its response to Sodexho's agency-level
protests, in which it found that the MEO's pricing was understated by a
negligible amount but otherwise rejected Sodexho's allegations, Sodexho
filed its protest with GAO on April 4.
    
Sodexho's protest allegations fell into three categories.  Sodexho first
argued that the Navy's overall process was flawed and unfair because the
cost comparison was based on an MEO that proposed to perform the
requirements using non-appropriated funds instrumentality (NAFI) employees
as 82 percent of its in-house workforce.  Sodexho next argued that the MEO
failed to meet numerous PWS requirements, and that the certification of
the MEO was inadequately documented and *directed* by external Navy
forces.  Sodexho finally argued that the Navy improperly failed to adjust
the in-house offer to equal the level of performance and performance
quality offered by Sodexho.  We sustained the protest in conjunction with
Sodexho's first allegation because, although we could not conclude that
the A-76 procedures prohibited the Navy from including NAFI employees in
its MEO, we found that the Navy's wholesale use of NAFI employees in the
MEO in the circumstances of the case resulted in an unfair competition. 
Sodexho Mgmt., Inc., B-289605.2, July 5, 2002, 2002 CPD P: 111.  We denied
the remainder of Sodexho's protest allegations.  We recommended that
Sodexho be reimbursed the costs of preparing its proposal to participate
in this competition, 4 C.F.R. 21.8(d)(2) (2003), and that Sodexho be
reimbursed its costs of filing and pursuing the protest, including
reasonable attorneys' fees.  4 C.F.R. 21.8(d)(1).  We advised Sodexho to
file its certified claim for costs, detailing the time expended and costs
incurred, directly to the contracting agency within 60 days after receipt
of our decision.  4 C.F.R. S: 21.8(f)(1).
    
On August 30, Sodexho filed with the Navy what it characterized as its
*initial claim* for cost reimbursement in connection with the protest. 
Sodexho requested reimbursement of $396,723 for preparing its proposal,
$140,980 for filing its administrative appeal, and $203,203 for filing its
agency/GAO protest,[2] for a total of $740,906.  Sodexho's Aug. 30, 2002
Initial Claim for Costs at 2, 6.  The first component of the claim was
direct labor for the efforts of Sodexho employees, inclusive of fringe
benefits.  The second component concerned the costs of subcontractors,
consultants, outside counsel, and other vendors.  As discussed below,
Sodexho limited or *capped* its attorneys' fees by applying a cost of
living adjustment (COLA) factor to the statutory cap on such fees.  The
third component concerned out-of-pocket expenses for such things as
travel, reproduction, printing, and communications.  Sodexho's claim was
accompanied by two binders of supporting documentation as well as
calculations and summary schedules prepared by an independent accounting
firm.
    
On September 13, the Navy informed Sodexho of its view that the firm's
initial claim included unallowable costs, provided insufficient support
for numerous other costs, and included overstated costs in other areas. 
The Navy stated that the costs of Sodexho's administrative appeal were
unallowable, that any increase in the statutory cap on attorneys' fees was
dependent upon a recommendation from the Comptroller General, which the
Navy would oppose,[3] and that the proposal preparation costs appeared to
be excessive and unreasonable.  Among other things, the Navy stated that
the proposal preparation costs associated with consultants and
out-of-pocket expenses included substantial costs without explaining the
relationship between the consultants and Sodexho or their role in the
proposal preparation process and were inadequately supported; the claimed
amount for pursuing the protests appeared to be excessive and inadequately
documented; and the explanation of various attorneys' fees was inadequate
to show the reasonableness and allocability of many costs and included
unallowable costs.  The Navy also took the position that Sodexho was not
entitled to recover the costs it incurred pursuing unsuccessful protest
issues.  The Navy concluded by stating that the 60-day deadline for filing
a claim had passed, but extended to Sodexho an additional opportunity to
remove unallowable costs and present the necessary level of documentation
for the claim.
    
In its September 27 response to the Navy, Sodexho took issue with most of
the agency's objections, provided limited additional documentation, and
made certain adjustments to its claim.  Sodexho offered to accept $605,658
as a settlement of its claim if the Navy agreed to a prompt payment of
that amount.  On November 21, the Navy stated that information provided by
Sodexho during the course of the claim process led it to conclude that the
firm's proposal should have been found technically unacceptable because it
appeared that Sodexho's proposal was *largely written* by consultants and
that Sodexho failed to comply with the RFP's requirement to certify
whether any portion of the technical proposal was written by anyone not a
bona fide employee of the firm submitting the proposal.  As a result, the
Navy stated, it would be proper to deny the cost claim in its entirety. 
Navy's Letter of Nov. 21, 2002, at 2-3.  The Navy also restated its
previous objections to the claim, supported by extensive analytical data,
and found that Sodexho's August 30 initial claim and its September 27
supplement were inadequately documented.  To facilitate settlement,
however, the Navy offered to settle the claim for $79,989.  On December
30, Sodexho informed the Navy that its consultants did not write its
technical proposal and that it was not required to submit the
certification of concern to the Navy.  Sodexho also took the position that
it submitted a legally sufficient cost claim within the requisite time
period, and reiterated its positions regarding the other issues in
controversy.  For the purposes of settlement, however, Sodexho offered to
settle the claim for $550,000.  On January 28, 2003, the Navy reiterated
its prior positions in their entirety and reasserted its $79,989
settlement offer.
    
Sodexho filed the instant request on February 10, asking GAO to recommend
that the Navy pay the firm the amount of $687,614.  This amount represents
adjustments made as a result of the Navy's prior comments and objections
associated with the claim, as well as the full, uncapped fees of its
outside counsel.  For the reasons discussed below, we recommend that
Sodexho be reimbursed $128,013.37.
    
THRESHOLD ISSUES
    
Entitlement to Costs
    
The Navy contends that Sodexho has not demonstrated entitlement to any of
its costs because it failed to acknowledge and certify the role of
non-employees in writing its technical proposal submissions.  According to
the Navy, Sodexho's failure to provide the requisite certification and
description of the roles of non-employees in the proposal preparation
process was an affirmative exception to the RFP's requirements that
*invalidates the overall evaluated acceptability of Sodexho's proposal
and, accordingly, the entire evaluation process that resulted in Sodexho's
inclusion in the A-76 cost comparison.*  Agency Report (AR) Legal
Memorandum
at 53.  The Navy argues that the *inclusion of Sodexho's unacceptable
proposal in the cost comparison led the Navy to erroneously permit Sodexho
the right to an Administrative Appeal*; the appeal decision, *to which
Sodexho was not entitled, was a prerequisite to Sodexho's GAO protest*;
and *Sodexho did not have proper standing to raise the issues that led GAO
to recommend the protest and proposal preparation costs that are the
subject of Sodexho's cost claim.*  Id.  As a result, the Navy requests
that GAO deny Sodexho's cost claim in its entirety.
We view the Navy's request as a request for reconsideration of our prior
decision and/or as a request for modification of the recommendation set
forth in that decision.  The record is clear that the request, however
characterized, is untimely.
    
Under our Bid Protest Regulations, a request for reconsideration must be
filed with our Office within 10 days after the requesting party knows or
should know the basis for reconsideration.  4 C.F.R. S: 21.14(b).  This
rule also applies to a request for modification of the recommendation. 
Tripp, Scott, Conklin & Smith--Claim for Costs, B-243142.4, Nov. 16, 1992,
92-2 CPD P: 345 at 3.  Here, the Navy states that it learned the basis for
its request on August 30, 2002, when Sodexho submitted its initial cost
claim and supporting documentation.  AR Legal Memorandum at 22, 48.  As a
result, the agency was required to file its request no later than 10 days
after its receipt of Sodexho's initial cost claim, but failed to do so
until March 12, 2003, when it filed its response to Sodexho's request that
our Office determine the amount it should recover for the costs of
preparing its proposal and filing and pursuing its GAO protest.  We find
that this delay was unreasonable and that the Navy's request is
untimely.[4]   
    
Administrative Appeal Costs
    
Sodexho argues that it is entitled to recover the costs it incurred in
filing the administrative appeal of the agency's tentative decision to
retain in-house performance of these services.[5]  Sodexho acknowledges
that we have previously held that our statutory authority to recommend
reimbursement of costs does not extend to the costs associated with
administrative appeals, Rice Servs., Ltd.--Costs, B-284997.2, May 18,
2001, 2001 CPD P: 88, but asserts that the Rice decision was limited to
the question whether such costs can be considered part of the costs of
filing and pursuing a GAO protest.  In contrast, Sodexho argues, it claims
entitlement to these costs as part of its proposal preparation costs.
    
Sodexho argues that the administrative appeal is an integral phase of the
process before a final award decision is reached in an A-76 procurement,
and that the decision as to the winner as between the MEO and the private
contractor is only a *tentative decision* until after the administrative
appeals process is completed.     See RSH Part I, ch. 3, P:P: J, K. 
Sodexho contends that the *tentative* nature of this decision makes the
administrative appeals authority the ultimate agency decisionmaker on the
source selection.  According to Sodexho, by pursuing its appeal rights,
Sodexho was merely *supporting its proposal* to the ultimate agency
decisionmaker just as it would have by participating in negotiations in a
FAR Part 15 procurement.  Since Sodexho views its efforts in the
administrative appeals process as *supporting its proposal,* and since the
FAR defines bid and proposal costs as *costs incurred in preparing,
submitting, and supporting bids and proposals (whether or not solicited)
on potential government or non-government contracts,* FAR S: 31.205-18(a),
the firm argues that the costs it incurred in filing its administrative
appeal are properly considered proposal costs.  Sodexho asserts, without
elaboration, that the administrative appeal process is not the equivalent
of an agency-level protest. 
    
The Navy correctly notes that our recommendation was that Sodexho be
*reimbursed the costs of preparing its proposal to participate in this
competition,* Sodexho Mgmt., Inc., supra, at 29, and we agree with the
Navy that the proposal preparation process does not extend to the
administrative appeals process.  Expenses compensable as proposal costs
are those in the nature of researching the requirements or specifications,
examining cost or price factors, and preparing draft and actual proposals
and proposal revisions.  See Lion Raisins, Inc. v. U.S., 52 Fed. Cl. 629,
630-631 (June 10, 2001); Power Sys.--Claim for Costs, B-210032.2, Mar. 26,
1984, 84-1 CPD P: 344 at 2 (recovery is limited *only to those expenses
incurred in the preparation of the [proposal] itself*).  The proposal
preparation process in this case ended with the submission of Sodexho's
final proposal.  After that time, Sodexho was given no opportunity to
amend or change--to *support*--its proposal, and Sodexho had already
expended any costs it incurred in preparing its proposal to participate in
this competition.
    
This is true even though the SSA's decision is considered to be
*tentative* pending the completion of the administrative appeals process. 
Sodexho's attempt to draw an analogy between the administrative appeals
process and the FAR Part 15 negotiations process is unpersuasive.  Those
negotiations are exchanges that are undertaken *with the intent of
allowing the offeror to revise its proposal.*             FAR S:
15.306(d).  A private-sector appellant, such as Sodexho, is afforded no
such opportunity in an administrative appeal.  See RSH part I, ch. 3, P:
K.  While Sodexho *supported* its proposal during the administrative
appeals process by arguing that it was cheaper to perform the services by
contracting out, this is the same type of *support* any commercial
contractor offers its proposal when it files an agency-level protest
outside of the A-76 context.  Sodexho's attempt to recharacterize the
nature of the A-76 administrative appeals process cannot disguise the fact
that it is simply a variant of the agency-level protest process.   
    
Since we view administrative appeals costs as tantamount to agency-level
protest costs, our decision in Rice is directly controlling.  As we stated
in that decision, our authority to recommend reimbursement of protest
costs is based on the statutory provisions of the Competition in
Contracting Act of 1984, 31 U.S.C. S: 3554(c)(1) (2000).  Those provisions
limit our bid protest jurisdiction as well as our corresponding authority
to recommend the payment of costs to those incurred in filing and pursuing
protests filed with our Office.  Id.; Rice Servs., Ltd.--Costs, supra, at
2.  We have consistently rejected assertions that our cost reimbursement
authority under CICA is properly applied to litigation costs incurred in
connection with matters brought in another forum, since we do not view
those costs as having been incurred in filing and pursuing a protest with
our Office.  Rice Servs., Ltd.--Costs, supra, at 3; Diverco, Inc., --Claim
for Costs, B-240639.5, May 21, 1992, 92-1 CPD P: 460 at 5.  The
administrative appeals process established by the FAR and OMB Circular
A-76 is separate from GAO's bid protest process.  Accordingly, our
statutory authority to recommend reimbursement of costs does not extend to
the costs associated with Sodexho's administrative appeal of the initial
A-76 cost comparison.  Sodexho's assertion that it is inequitable for it
to have to absorb these costs given that the Navy conducted an unfair
procurement does not alter the reach of our statutory authority. 
    
PROPOSAL PREPARATION COSTS
    
Sodexho asks to be reimbursed $351,214 for the costs of preparing its
proposal.  Sodexho's Feb. 10, 2003 GAO Claim, Basis of Estimate
Memorandum, Table 1.  The firm has supported its claim with several inches
of documentation such as employee calendars, timesheets, travel expense
reports, consultant and vendor invoices, and law firm billing statements.
    
The Navy asserts that, the quantity of documentation notwithstanding,
Sodexho has failed to provide evidence sufficient to support its claim
that these costs were incurred, are properly attributable to proposal
preparation, and are reasonable.  The Navy's November 21, 2002 letter to
Sodexho reiterating this position attached more
than 55 pages of spreadsheets analyzing each expense Sodexho claimed for
the costs of preparing its proposal.  For the numerous line items the Navy
found unallowable, the spreadsheet included one or more codes under the
heading *reasons disallowed*; the key to these codes shows that the Navy's
primary reasons for disallowing costs were Sodexho's failure to provide
sufficient detail to show the purpose for which the expense was incurred
and/or the reasonableness of the expense. 
    
With limited exception, Sodexho has not provided additional information in
support of its claim.  Instead, Sodexho has accused the Navy of holding it
to an *unreasonably stringent standard for documentation* of its employee
costs, Sodexho's Letter of Dec. 30, 2002 at 19; imposing an *unreasonably
high burden* on Sodexho to provide *extraordinary details* in regard to
its consultant costs, id. at 10, and improperly *substituting its own
legal judgment* regarding whether certain costs were warranted in regard
to the billing statements of its outside counsel.  Sodexho's Feb. 10, 2003
GAO Claim at 51.  A review of the record shows that these standards are
neither unreasonable nor unique to the Navy but are, rather, long-standing
prerequisites to reimbursement that are well-known to the government
contracts bar.
    
A recommendation from our Office that an agency reimburse a protester the
costs of preparing its proposal, or filing and pursuing its protest, is
not a blank check.  A protester seeking to recover its proposal
preparation costs must submit evidence sufficient to support its claim
that those costs were incurred and are properly attributable to proposal
preparation.  Stocker & Yale, Inc.--Claim for Costs,       
          B-242568.3, May 18, 1993, 93-1 CPD P: 387 at 4; Patio Pools of
Sierra Vista, Inc.--Claim for Costs, B-228187.4, B-228188.3, Apr. 12,
1989, 89-1 CPD P: 374 at 3.  The amount claimed may be recovered to the
extent that it is adequately documented and is shown to be reasonable; a
cost is reasonable if, in its nature and amount, it does not exceed that
which would be incurred by a prudent person in the preparation of his or
her proposal.  Patio Pools of Sierra Vista, Inc.--Claim for Costs, supra;
see also FAR S: 31.201-3(a).  Where a protester has aggregated allowable
and unallowable costs in a single claim, such that our Office cannot tell
from the record what portion is unallowable, we will recommend that the
entire amount be disallowed even though some portion of the claim may be
properly payable.  TRESP
Assocs., Inc.--Costs, B-258322.8, Nov. 3, 1998, 98-2 CPD P: 108 at 4. 
Although we recognize that the requirement for documentation may sometimes
entail certain practical difficulties, we do not consider it unreasonable
to require a protester to document in some detail the amount and purposes
of its employees' claimed efforts and to establish that the claimed hourly
rates reflect the employees' actual rates of compensation plus reasonable
overhead and fringe benefits.  W.S. Spotswood & Sons, Inc.--Claim for
Costs, B-236713.3, July 19, 1990, 90-2 CPD P: 50 at 3.  The mere
submission of voluminous documentation in support of a claim is not enough
to meet these standards.
    
It is our obligation, as it was the Navy's before us, to ensure that any
protester seeking to recover its costs meets these minimum standards.  We
have conducted our own expense-by-expense review of Sodexho's claim and
agree with the Navy that Sodexho did not meet these standards with respect
to the majority of its claimed costs for proposal preparation.  Instead of
providing the additional explanations reasonably requested by the Navy,
Sodexho opted to file vituperative pleadings that characterize these
minimum standards as unreasonably stringent and burdensome, to disregard
most of the Navy's concerns, and to bring the matter to this Office for
resolution.  Our review of Sodexho's claim leads us to recommend the
reimbursement of $96,069.85 for its proposal preparation costs.  
    
Sodexho Employees
    
Sodexho asks to be reimbursed $167,014.43 in direct labor, travel
expenses, and other out-of-pocket expenses incurred by 19 different
employees in the preparation of its proposal.[6]  Sodexho's Feb. 10 GAO
Claim, Bid and Proposal (B&P) Cost Spreadsheets.  Sodexho states that it
identified all employees involved with the claim and had each one estimate
his or her labor hours using detailed time reports, calendars, and/or
estimates for proposal tasks.  According to Sodexho, this documentation
included *detailed descriptions of work performed and the amount of time
spent each day or period.*  Sodexho's Aug. 30, 2002 Claim at 3.  Along
with the documentation for direct labor expenses, Sodexho included
documentation of out-of-pocket expenses associated with its employees, the
majority of which were related to travel.  According to Sodexho, *[a]ll
travel costs were verified to relate specifically to the [c]laim through a
detailed examination of each invoice.*  Id. at 5.    
    
The Navy informed Sodexho that the documentation of its employee costs was
*grossly inadequate* and *extremely limited.*  Navy's Letter of Nov. 21,
2003 at 19, 20.  The Navy asserted that the documentation either failed to
explain the purpose of many employee costs or failed to show that the
costs were reasonable and necessary to the proposal preparation process,
and attached its analytical spreadsheets in support of its position.  The
Navy also stated that Sodexho had failed to explain the necessity for the
*tremendous amount of travel* included in the claim.  Id. at 20.  The Navy
found that Sodexho had adequately supported a total of $26,936.91 for the
expenses of its employees, inclusive of direct labor with fringe benefits,
travel, and out-of-pocket expenses.  Sodexho objected that the Navy was
holding it to an *unreasonably stringent standard for documentation* of
its employee costs, especially for those associated with the efforts of
the employee who was primarily responsible for writing and preparing
Sodexho's proposal.  Sodexho's Letter of    Dec. 30, 2003 at 19.  Sodexho
specifically challenged only a very small number of the employee expenses
disallowed by the Navy; most of these were associated with this employee. 
    
Again, although we recognize that the requirement for documentation may
sometimes entail certain difficulties, we do not consider it unreasonable
to require a protester to document in some manner the amount and purposes
of its employees' claimed efforts and to establish that the claimed hourly
rates reflect the employees' actual rates of compensation plus reasonable
overhead and fringe benefits.  W.S. Spotswood & Sons, Inc.--Claim for
Costs, supra.  We agree with the Navy that Sodexho has failed to
adequately document the purposes of most of its employees' claimed
efforts, and we therefore recommend that the firm be reimbursed $43,766.64
for the direct labor of its employees, including Sodexho's fringe rate,
and $11,994.21 for their travel and other out-of-pocket expenses, for a
total of $55,760.85.  Our discussion begins with the expenses associated
with the employee responsible for leading the proposal effort.
    
Sodexho asks to be reimbursed for 1,640 hours of direct labor expended by
this employee over the 1999-2001 period.  Sodexho's Feb. 10, 2003 GAO
Claim, B&P Costs Spreadsheets.  For the years 1999 and 2001, Sodexho has
supported its claim with pages from the calendar this employee used to
track the proposal effort.  For each day a proposal task was performed,
the calendar pages include a brief description of the task(s) and the
amount of time spent on the effort, for a total of 328 hours in 1999 and
392 hours in 2001.[7]  We have considered the fact that these tasks appear
in the context of a calendar used to track this proposal effort, and
reviewed both the descriptions of each day's task(s) and the calendar
entries as a whole in deciding whether the documentation of this
employee's efforts meets the requisite standard.  We find allowable 225.6
of the 328 hours he claimed for 1999, and 273.6 of the 392 hours he
claimed for 2001.
    
Specifically, in addition to tasks the Navy found allowable, we found
sufficient information in the documentation to support expenses incurred
for such tasks as Pensacola operational overviews; reviews of procurement
targets; discussions with or about other members of the proposal team;
site visits; office preparations for temporary proposal team space;
discussions with or about subcontractors; activities related to project
status and finance requirements; requests for proposal extensions;
status updates; cost pricing rationale studies; and the development of
organization charts.[8]  B&P 1999 ref. K, B&P 2001 ref. E2.  We do not
share the Navy's view that the time this employee spent managing a
consultant Sodexho engaged to assist it in the preparation of the proposal
is unallowable.  Sodexho engaged this consultant to, among other things,
*utilize his knowledge, expertise and independent judgment in developing
strategies and proposals for acquiring the U.S. Navy's Community Support
Services Contract,* and the agreement between the parties stated that this
employee was to provide the consultant's day-to-day work assignments. 
Consulting Agreement at 1.  Since these tasks would not have occurred but
for Sodexho's preparation of the proposal, as long as this employee's
managerial tasks can be linked to this procurement, we conclude that they
were reasonably related to the preparation of the proposal.[9]   
    
On the other hand, we agree with the Navy that Sodexho has failed to
establish a linkage between the preparation of its proposal and numerous
tasks described in this employee's calendar.  For example, this employee
spent time reviewing an unidentified matter with persons whose name we
could not associate with the effort; identifying and reviewing the resume
of a person whose name we could not

   associate with the effort; preparing to submit a Freedom of Information
Act request whose purpose we could not associate with the effort; and
performing *Gold Review* tasks whose purpose we could not associate with
the effort.  Despite the fact that the Navy's spreadsheets clearly flagged
each of these items as unallowable, and provided a basis for this
conclusion, Sodexho failed to provide any explanation of the relationship
between these and other similarly flagged tasks and the preparation of the
proposal.  In addition, there are tasks associated with pre-proposal
submission presentations that, as the Navy has repeatedly argued, have no
clear connection to the preparation of Sodexho's proposal.  Since there is
evidence that Sodexho was also engaged in general business development
with the Navy at this time, in the absence of an explanation of these
presentations from Sodexho, we recommend that all of these expenses be
disallowed.  We also found numerous examples where the task description
mingled allowable tasks with tasks whose purpose was either unallowable or
unclear, and where Sodexho failed to segregate the costs.  Where a
protester has aggregated allowable and unallowable costs in a single
claim, such that we cannot tell from the record what portion is
unallowable, the entire amount should be disallowed even though some
portion of the claim may be properly payable.  TRESP Assocs., Inc.--Costs,
supra.  In cases where the calendar described the occurrence of an
external event, such as the release of the draft RFP, but did not describe
any tasks this employee performed, we do not recommend reimbursement of
the expense.  Finally, we do not recommend reimbursement for labor hours
associated with travel to and from a business destination since there is
no evidence that any work was performed relating to the proposal
preparation process during the hours of travel.  See Armour of Am.,
Inc.--Claim for Costs,
B-237690.2, Mar. 4, 1992, 92-1 CPD P: 257 at 8.
    
Sodexho also asks to be reimbursed $42,296.62 in travel expenses and
$1,157.38 in out-of-pocket expenses associated with this employee's
efforts.  Sodexho's Feb. 10, 2003 GAO Claim, B&P Cost Spreadsheets.  We
have carefully reviewed the same travel expense information analyzed by
the Navy, which consists principally of travel expense reports and
Sodexho's internal company-paid *airfare reports,* and conclude that
Sodexho has failed to provide adequate information to show that most of
these travel expenses are both connected to the preparation of its
proposal and reasonable.  This employee's travel expense reports for all 3
years contain very little information to connect the associated expenses
with the preparation of the proposal--generally *Pensacola bid costs* or
*Pensacola meetings* or *leading proposal team for Navy Base/Pensacola.* 
We have read the expense reports for 1999 and 2001 together with this
employee's calendar in an effort to ascertain the purpose of the travel.
    
We found a sufficient nexus between his 1999 travel expenses and allowable
tasks in his calendar to allow a $256.53 expense and a $364.95 expense,
both documented by expense reports.  One component of these expenses is
the cost of meals incurred during this employee's business travel away
from his normal duty station and to the Pensacola area for the purpose of
proposal preparation.  Under these circumstances, we conclude that such
costs, provided they are reasonable, are allowable.[10]  Boines Constr. &
Equip. Co., Inc., supra, at 6; Armour of Am., Inc.--Claim for Costs,
supra,
at 9.  We next turned to Sodexho's internal airfare report for 1999. 
These reports are simply lists of airline tickets issued to various
Sodexho employees, along with the date of issuance, the travel points, and
the cost of the ticket.  This employee's 1999 airfare report listed
several flights that had no apparent connection with the preparation of
the proposal, such as flights from San Francisco to Guam and to San
Diego.  B&P 1999 ref. J.  By reviewing the information in the calendar, we
could ascertain a nexus between two flights and allowable tasks this
individual performed to allow the costs of those two flights, in the
amount of $2,575.82.  We do not recommend the reimbursement of any of the
report's remaining airfares. 
    
We found a sufficient nexus between this employee's 2001 travel expenses
and allowable tasks as described in another employee's calendar to allow
$39.69 in business meals, B&P 2001 ref. D, but disallowed other travel
expenses because we could not link the purpose of the travel to any
proposal preparation effort.  B&P 2001 ref. A.  Moreover, we disallowed
the $17,390.87 in airfare supported by a Sodexho internal airfare report
because none of the flights, including those between Oakland and Las
Vegas, San Francisco and Anchorage, San Francisco and Honolulu, and
Honolulu and Guam, had any apparent connection to proposal preparation. 
We also disallowed most of this employee's travel expenses for 2000.  As
noted above, since Sodexho did not provide any information to substantiate
the nature of his efforts in 2000, and since the information on the
expense reports was too general for us to ascertain that his efforts were
reasonably related to proposal preparation, the only allowable expense in
the expense reports was $44.44 in business meals that were consumed away
from the employee's normal duty station and that could be linked to an
allowable task based upon information in another employee's calendar.  B&P
2000 refs. GG, FF2.  We recommend against reimbursement of the $11,464.98
in airfare documented by a Sodexho internal airfare report because we
could not establish that the flights were related to proposal preparation.
    
In conclusion, we recommend reimbursement of $23,260.01 for this
employee's labor, inclusive of Sodexho's fringe benefit rate, and
$3,281.43 for his travel expenses.[11]
    
A second Sodexho employee claimed to have spent 212.8 labor hours
performing tasks associated with proposal preparation in 1999 and 2000,
and supported this claim with detailed task information in a daily
calendar.  Based on our review of this information, we recommend
reimbursement for 8 of the 22.4 hours claimed in 1999 and for 168 of the
190.4 hours claimed in 2000, having disallowed hours associated with
travel to and from business since there was no evidence that any work was
performed relating to the proposal preparation process during the hours of
travel.  See Armour of Am., Inc.--Claim for Costs, supra.  This employee's
associated travel expenses are in the form of expense reports and
Sodexho's internal airfare reports.  For 1999, we found allowable a
$265.11 expense report because we could connect the travel with an
allowable task in his calendar.  B&P 1999 ref. I.  However, our review of
1999's airfare report showed that Sodexho had included in the claim
several airfares for tickets issued to another employee not associated
with the proposal and another airfare for a ticket whose travel points we
could not connect with the proposal preparation process.  Id.  As a
result, we allow only the $806.88 airfare that can be connected with an
allowable task.  This employee's 2000 travel expenses and phone expenses
include several expense reports that can be linked to allowable tasks by
reviewing his calendar, in the amount of $5,992.30.[12]  However, the
claim also includes an airfare report that double-counts airfares already
included in this employee's expense reports and includes flights with no
apparent relationship to the preparation of this proposal.  We have
disallowed all of these airfares except one for $863.70 that can be linked
to allowable tasks noted in his calendar.  Accordingly, for this Sodexho
employee, we recommend the reimbursement of $6,346.22 for his labor and
$7,927.91 for his associated travel and out-of-pocket expenses.
    
The documentation Sodexho submitted to support the 177.6 hours associated
with four employees was limited to the number of labor hours spent, with
no indication of the purpose for which that labor was expended.  See B&P
1999 refs. K2, B&P 2000 refs. W2, JJ2.  We do not recommend reimbursement
of any of these hours because they have not met the minimum
standards.[13]  One of these employees supported his claimed 32 hours in
1999 with no more detailed information than that found in accompanying
expense reports.  B&P 1999 ref. B.  The e-mail message requesting
information about this employee's proposal preparation efforts included a
series of dates during which proposal preparation efforts were to have
occurred.  One of this employee's expense reports predates the date
established for commencement of these efforts, id., and two more are
associated with pre-proposal presentations that we have determined to be
unallowable.  B&P 1999 ref. G.  As a result, we recommend the
reimbursement of neither his labor nor his travel.[14]
    
Another employee claimed 536 hours in direct labor in 2000, and supported
this claim with biweekly time records listing the number of regular and
overtime hours she worked.  B&P 2000 refs. I, P, T, W, BB.  For most of
these timesheets, the only narrative information indicates that the
overtime was to be split or transferred to the Pensacola Navy base, but
does not indicate the purpose or nature of the work.  As a result, we view
all of these hours as unallowable.  However, one biweekly time record
noted that *all overtime transfer to SC Pensacola bid after hour layout
design for bid.*  B&P 2000 ref. T.  Since this timesheet links the amount
of overtime hours to a purpose that is associated with proposal
preparation, we recommend the reimbursement of these 24.5 hours of
overtime[15] in the amount of $427.42. 
    
An employee who claimed 34.85 hours in 2000 supported his efforts with a
typed list of tasks he performed.  While a note at the top of this list
states that all of the hours are for work performed for this proposal, as
the Navy notes, some of the entries are so vague that we cannot ascertain
their purpose.  B&P 2000 ref. DD.  There is no indication, for example,
that such tasks as *Florida Medical Center,* *Gram,* *IBM,* *SRCUTZ,*
*Safety,* *Troy State,* or *Nana draft,* have any connection to the
proposal preparation process.  As a result, we have disallowed his labor
for such cryptically described tasks and recommend reimbursement for only
10.35 of his hours.  Given their very general described purposes, such as
*Navy contract meeting Pensacola,* and their proximity in time to
unallowable tasks, his associated expense reports cannot be connected to
any allowable tasks and we do not recommend reimbursement of any of his
claimed travel or telephone calls.  B&P 2000 ref. N.  We recommend
reimbursement of $602.48 for his labor.
    
Our review of the claim's documentation showed areas where we disagree
with the Navy.  First, when all of the claim's documentation is
considered, the information underlying the 55 hours in labor claimed by
three employees in connection with a sales tax issue, B&P 2000 ref. A, was
sufficiently documented to show the amount, purpose, and reasonableness of
the expense, for a total of $953.75.  Second, another employee accounted
for her claimed 6.5 hours of labor with a detailed task-by-task memorandum
that, with the exception of 1.5 hours providing legal comments on a
subcontract we could not link to the proposal, was sufficient to show
their purpose and relationship to the proposal preparation efforts.  B&P
2000 ref. D.  We recommend reimbursement of her labor in the amount of
$306.35.  Third, another employee claimed 27 hours of labor for various
bid team meetings and telephone calls.  While the information he submitted
to describe his tasks was limited, when viewed along with information in
another employee's calendar, we found sufficient information to link all
but 2 hours of undescribed telephone calls to the proposal preparation
effort.  B&P 2000 ref. M.  We also find that his travel expense report
contains sufficient information to be linked to allowable tasks based upon
the calendar information of other employees.  B&P 2000 ref. FF.  As a
result, we recommend the reimbursement of $1,1211.23 for his labor and
$735.62 for his travel expenses.  Fourth, another employee claimed 30.40
hours in 2001 that was supported by his detailed daily calendar.  B&P 2001
ref. E.  Although the Navy found that several entries were insufficiently
specific and failed to indicate that this employee had performed the
listed tasks--the calendar entries are identical to those for another
employee--given the fact that this employee's name is on the calendar with
limited notations attributed to his effort, we find these hours allowable
and recommend reimbursement in the amount of $2,886.82.    
    
Finally, the Navy allowed the 40 hours for an employee who worked on the
housing component of the RFP, B&P 2000 ref. B, in the amount of $1,725.41;
the 2.5 hours for an employee who worked on an overview meeting, B&P 2000
ref. F, in the amount of $133.21; the 4 hours for an employee who worked
gathering past performance materials, B&P 2000 ref. AA, in the amount of
$212.10; the 40 hours for an employee who worked on various charts, B&P
2000 ref. HH, in the amount of $1,113.74; the    56 hours for an employee
who worked on Sodexho's *red team review* and other tasks, B&P 2000 ref.
FF2, B&P 2001 ref. C, in the amount of $2,400.79 for her direct labor and
$49.25 for her associated out-of-pocket expenses; and the 34 hours for an
employee who worked on the firm's cost submissions, B&P 2001 ref. B, in
the amount of $2,187.11.  We have reviewed Sodexho's claim and agree with
the Navy's view that all of these costs are allowable.
    
Subcontractors
    
Sodexho asks to be reimbursed $18,417.95 for proposal preparation costs
incurred by two of its *team members,* or subcontractors, that would have
performed specific contract requirements if the contract had been awarded
to Sodexho.  Sodexho's Feb. 10, 2003 GAO Claim, B&P Cost Spreadsheets. 
    
We have allowed a protester to recover the proposal preparation costs
incurred by its potential subcontractors in only one limited
circumstance--where the costs were incurred by the contractor as part of a
joint effort with the protester, participating fully in the proposal
preparation process, and not limiting its role to merely providing a
quotation for certain work under the solicitation.  TMC, Inc.--Claim for
Costs, B-230078.2, B-230079.2, Jan. 26, 1990, 90-1 CPD P: 111 at 2-3. 
Moreover, consistent with CICA, before recommending that the protester
recover proposal preparation costs incurred by its potential subcontractor
from the contracting agency, we will require evidence of an obligation by
the protester to repay such costs regardless of whether or not they are
recovered from the government.  In this regard, under 31 U.S.C. S:
3554(c)(1), we are authorized to recommend that the contracting agency pay
proposal preparation costs to an *appropriate interested party.*  In our
view, it is implicit in this provision that the costs to be recovered be
the costs of the
*interested party.*  Boines Constr. & Equip. Co., Inc.--Costs, B-279575.4,
Apr. 5, 2000, 2000 CPD P: 56 at 4-5.  As defined in 31 U.S.C. S: 3551(2),
an *interested party* is an *actual or prospective bidder or offeror.* 
Under this definition, the interested party is the protester, not its
potential subcontractor, even if it participates in preparing the
protester's proposal.  Accordingly, only if there is evidence of an
obligation by the protester to repay the subcontractor for its proposal
preparation costs regardless of whether the protester ultimately recovers
those costs from the government can we conclude that the costs are those
of an interested party, as required by CICA.  Boines Construction & Equip.
Co., Inc.--Costs, supra, at 5.  There is no evidence of any such
obligation here.  Instead, the evidence shows that Sodexho did not even
ask these firms for information concerning the costs of their efforts
until it was preparing to file its claim for costs with the Navy.  As a
consequence, we do not recommend that Sodexho recover these costs.
    
Consultants
    
Sodexho asks to be reimbursed $114,793.86 for the services of five
consultants who assisted it in preparing its proposal.  Sodexho's Feb. 10,
2003 GAO Claim, B&P Cost Spreadsheets.  Sodexho supported its claim with
invoices from these consultants as well as, in various cases, timesheets,
travel expense reports, and mileage reports. 
    
After reviewing the information in Sodexho's August 30 claim, the Navy
informed the firm that its proposal preparation costs included substantial
consultant costs without adequately explaining the relationship between
those consultants and Sodexho or their role in the proposal preparation
process.  The Navy advised Sodexho that, in order for it to determine the
reasonableness, allowability, and allocability of the costs included for
these consultants, Sodexho must provide its consultant agreements and
detailed explanations of the specific costs and their relationship to the
proposal preparation effort.  Navy's Letter of Sept. 13, 2002, at 6.  In
its September 27 response, Sodexho provided these consultant agreements
and stated
    
that they *further describe[d] the work performed* with respect to the
proposal effort.  The firm did not submit further explanation.  Sodexho's
Letter of Sept. 27, 2002, at 4 n.6.  The Navy conducted a detailed
analysis of Sodexho's claim, expense by expense, and advised the firm that
its supplemental submission *did nothing more to explain how the specific
costs claimed relate to the [proposal] preparation effort.*  Navy's Letter
of Nov. 21, 2002 at 10.  As a result, the Navy denied all but $14,858.14
of Sodexho's claimed consultant expenses.  Id. at 20.  The Navy's decision
was supported by a detailed spreadsheet analysis of each expense.
    
Sodexho responded by arguing that the Navy had imposed an *unreasonably
high burden* on Sodexho to provide *extraordinary details* in regard to
its consultant costs.  Sodexho's Letter of Dec. 30, 2002 at 10.  Sodexho
stated that it had adequately documented the amount and purposes of its
claimed consultant effort.  The firm also attached a declaration from the
Sodexho employee responsible for leading the proposal effort in which he
provided a general description of the efforts of each consultant.  The
Navy rejected Sodexho's argument and the dispute has come for resolution
to our Office.  We have conducted an extensive review of the documentation
submitted by Sodexho and agree that the firm has failed to submit
sufficient evidence for us to determine that many of its costs were
reasonably necessary to the proposal preparation effort.  We recommend
Sodexho be reimbursed $29,128.29 for the efforts of its consultants in
preparing its proposal. 
    
Sodexho asks to be reimbursed $83,110.55 for the services of the
consultant who played a major role in assisting with the preparation of
the firm's proposal.  Sodexho's Feb. 10, 2003 GAO Claim, B&P Cost
Spreadsheets.  The documentation submitted in support of these expenses is
in the form of 22 invoices over the 1999-2001 period, many of which
include both labor and travel or other out-of-pocket expenses.  With some
exceptions, we agree with the Navy that Sodexho has provided the minimum
documentation required to identify the amounts for this consultant's
services, but not to properly identify the purpose for which the expense
was incurred and how that expense relates to proposal preparation. 
Sodexho has also done little or nothing to respond to the Navy's concern
that this consultant's expenses, including 165 days of labor, are grossly
overstated given the limited role Sodexho now ascribes to him.  Our
analysis shows that this consultant's 22 invoices can be sorted into three
general categories.
    
The first category encompasses a sequential series of invoices beginning
with the period ending January 21, 2000 and ending with the period ending
August 26, 2000.  On the first invoice, for 9 days of labor, the listed
business purpose is *Continued work towards preparation of SMS Proposal
for the U.S. Navy Pensacola Community Support Services Competition. 
Request for Proposal (RFP) release date is scheduled for February 1,
2000.*  B&P 2000 ref. LL.  The purpose listed on each succeeding invoice,
covering an additional 80 days of labor, begins with the same language but
continues with ongoing milestones in the procurement, such as when various
amendments were issued.  B&P 2000 refs. QQ, SS, VV, XX, BC, FF, HJ, MN,
QR, ST.  No actual task is listed as the business purpose.  
    
The Navy argues, and we agree, that this complete lack of specificity
makes it impossible to determine the nature of the consultant's effort in
the proposal preparation process, whether the task or tasks were
reasonably related to proposal preparation, or whether the costs were
duplicative and excessive, particularly in light of the substantial amount
of direct labor claimed by Sodexho employees for preparing the proposal
over the same time period.
    
Sodexho is under the apparent, but erroneous, impression that a
description such as *work towards preparation of a proposal,* *preparing
the proposal,* or *work in support of proposal preparation* is sufficient
to meet the requisite standards.  Although it seems self-evident,
Sodexho's attempt to support its claim that an expense was incurred for
*preparation of the proposal* by describing the purpose of the expense as
*preparation of the proposal* means that it has provided no description at
all.  At a minimum, it precludes a determination that the cost was
reasonable based on a review of whether, in its nature and amount, it does
not exceed that which would be incurred by a prudent person in the
preparation of a proposal.  Patio Pools of Sierra Vista, Inc.--Claim for
Costs, supra.   
    
We scrutinized every piece of paper associated with these invoices to
ascertain whether Sodexho had provided sufficient documentation for us to
determine that any of these costs were allowable.  We could not do so. 
While a number of these invoices contained no additional detail at all,
see B&P 2000 refs. LL, BC, MN, QR, and ST, others contained hints of
information that were still insufficient.  One invoice included a travel
expense report that listed the purpose, *Work at Sodexho's Mobile office
in support of the CSS proposal preparation*; again, this is not a
sufficient description of the nature of the task.  The invoice also
included a mileage report showing that, on a certain date, the consultant
visited sites relevant to this procurement.  This task is allowable but,
since neither the mileage report nor any other information in the invoice
associated any amount of time with this task, there was no way for us to
segregate an allowable amount.  Where a protester has aggregated allowable
and unallowable costs in a single claim, such that we cannot tell from the
record before us what portion is unallowable, the entire amount must be
disallowed even though some portion of the claim may be properly payable. 
TRESP Assocs., Inc.--Costs, supra.  Other invoices contained similarly
aggregated tasks.  See B&P 2000 refs. VV, SS, XX, EF.  We do not recommend
reimbursement of any of these invoices.
    
The second category encompasses invoices whose listed purposes include
both allowable and unallowable costs, but provide no reasonable way to
segregate the two.  Again, where a protester has aggregated allowable and
unallowable costs in a single claim, such that we cannot tell from the
record before us what portion is unallowable, the entire amount must be
disallowed even though some portion of the claim may be properly payable. 
TRESP Assocs., Inc.--Costs, supra.  For example, the invoice submitted for
the period ending November 12, 1999 lists as its business purpose the
following:
    
During this period I met two times with Sodexho Marriott Services Staff in
Pensacola and provided information concerning Navy Pensacola Organization
and forthcoming business opportunities in the local area.  Assisted in
developing Sodexho Services *Lessons Learned* presentation outline,
reviewed the presentation and was a member of the team that gave the
presentation to the U.S. Navy.  Also, during this period, I met with the
Navy's Outsourcing Technical Director three times, and provided
information concerning Sodexho's Organization and Capabilities. 
    
B&P 1999 ref. M; see also the aggregated tasks in B&P 1999 refs. N and O. 
The first task is clearly related to general business opportunities
extending beyond this procurement.  Moreover, the Navy argues that the
solicitation process did not include any provision for a *lessons learned*
presentation as part of the proposal process and asserts that this task,
too, represents an unallowable cost associated with general business
development.  Sodexho has failed to rebut the Navy's argument, which we
find reasonable. 
    
Two additional invoices in this category are for 5 days of labor with the
listed purpose, *collection of information concerning the acquisition
schedule for Pensacola Community Support Services.  Participated in the
personnel interview process of five individuals for potential employment
with SMS.  Continued developing Capture Plan Procedures and Information
for Navy competitions.*  B&P 2001 Refs. F, G.  The Navy argues, without
rebuttal from Sodexho, that very little time should have been needed for
the first task; that it cannot ascertain that the interview process was
related to this procurement; and that the third task is not limited to the
capture plan for this procurement but extends to various *Navy
competitions.*  The Navy asserts that Sodexho provided no way to segregate
any allowable costs from those not associated with preparing its
proposal.  While Sodexho argues that the fact several days are crossed out
on each invoice indicates the segregation has been accomplished, as the
Navy points out, none of the tasks have been similarly crossed out.  As a
result, there is no way to ascertain whether this crossing out is, in
fact, the proper segregation of allowable costs or whether the consultant
simply revised the number of days he billed Sodexho for all of these
tasks.  This incomplete effort at segregating costs, if that is what it
is, precludes the payment of any of the costs for either of these
invoices.  See also B&P 2001 ref. L.
    
The final category encompasses invoices that include allowable costs
either in total or in ways that sufficiently segregated the allowable
costs.  First, the invoice for the period ending December 24, 1999, for 9
days of labor, lists as the business purpose the following:
    
During this period I meet with [another Sodexho consultant].  Coordinated
the development of questions concerning the Draft RFP for Community
Support Services (CSS) Pensacola Regional Complex.  Submitted draft
questions to SMS, San Ramon for finalization and submittal to the U.S.
Navy.  Reviewed and updated draft CSS Capture Plan in preparation of SMS
management meeting held December 21, in SMS building, Mobile, AL. 
Scheduled and participated in Business Meetings with SMS management and
representatives from . . . candidates for CSS contract work.  Commenced
work preparing for corporate meeting scheduled for January 5 and 6, 2000. 
    
B&P 1999 ref. P.  The invoice was accompanied by two travel expense
reports, one for the trip to the consultant's facility, referenced in the
first listed task, and one for the trip to Mobile.
    
We do not agree with the Navy that Sodexho's claim is insufficient to show
the amount and purpose of this expense.  The submissions as a whole
confirm these meetings and their purposes.  The *corporate meeting,* for
example, is identified as a multi-day Pensacola project overview meeting
in the calendar of another Sodexho employee, B&P 2000 ref. E, B&P 1999
ref. K, and the remaining tasks are clearly related to proposal
preparation.  In addition, given the number of tasks, we have no basis to
find the expense to be excessive or unreasonable.  As a result, we
recommend reimbursement of this expense for his 9 days of labor, as well
as associated travel and out-of-pocket expenses, in the amount of
$4,687.69.
    
In a related invoice, also for 9 days of labor, the purpose is listed as
*[c]ontinued work preparing for corporate meeting which was held January
5, 6, 2000 in Gaithersburg, MD.*  B&P 2000 ref. KK.  While we find these
expenses allowable as to the 2 days of the meeting, and to 2 days of
meeting preparation based on another employee's calendar, B&P 1999 ref. K,
Sodexho has failed to provide sufficient information to identify the
nature of the consultant's activities in other days before and after the
meeting.  As a result, we find these expenses allowable to the extent of 4
days of labor (two in 1999 and two in 2000), in addition to his travel
expenses, in the amount of $2,826.37.[16] 
    
Several 2001 invoices listed both allowable tasks and tasks that were not
associated with proposal preparation.  In our view, however, the fact that
Sodexho has crossed off both days and tasks from these invoices is
sufficient evidence that the allowable tasks have been segregated.  As a
result, we recommend the reimbursement of          6 days of labor and
associated travel for *review of the final proposal* in May in the amount
of $4,808.21 (B&P 2001 refs. J, K); 12 days of labor and associated travel
for *preparing final proposal submission* in July in the amount of
$4,268.94 (B&P 2001 refs. Q, O); and 9 days of labor and associated travel
for *preparing second final proposal submission* in August in the amount
of $5,232.66 (B&P 2001 refs. W, T).  We have no basis to share the Navy's
view that this amount of labor is excessive, considering the complexity of
this procurement and the commensurate complexity of proposals submitted in
response to the solicitation.
    
In sum, we recommend that Sodexho be reimbursed $21,823.87 for the labor
and associated expenses claimed for this consultant.[17]
    
Sodexho asks to be reimbursed $18,896.30 for the services of a second
consultant in the preparation of its proposal.  The documentation
submitted to support this claim is a series of four invoices, several of
which include travel expenses.  The first invoice is for 108 hours for
*Proposal Services for Pensacola RFP* over 2 weeks in December 1999.  The
attached time sheet for the first week, showing 45 hours, contains the
description, *Pensacola RFP review* and lists the names of two
individuals.  B&P 2000 ref. KK2.  The attached time sheet for the second
week, showing 63 hours, contains the description, *Meeting with [the
primary consultant]* and the names of three individuals.  The accompanying
letter indicates that the invoice *covers the time [this consultant] spent
prior to the meeting with [the primary consultant] and the three days [the
primary consultant] was here at our site.*  Id.  The remaining three
invoices, for 187.5 hours of *Proposal Services Pensacola RFP* and travel
expenses, include only as a further purpose the name of an individual and
*Pensacola Proposal.*  B&P 2000 refs. NN, OO, TT.
    
The Navy argues that none of these services should be reimbursed because
there is no explanation regarding this consultant's role in the
preparation of the proposal.  In response to the Navy's position in this
regard, Sodexho provided the consulting agreement but no further detail. 
As the Navy points out, the agreement is very general; the firm is
retained to provide *proposal and bid support services including proposal
management, technical writing, and costing support for the Pensacola NAS
RFP.*  Agreement P: 1.1.  Absent further detail regarding the services the
consultant provided, the Navy asserts that it cannot assess the
reasonableness or relevance of these costs.  Sodexho's argument that the
Navy has imposed an *overly burdensome and stringent test* to determine
the relevance of the firm's services is another example of the firm's
unconstructive approach to pursuing this claim.  Given such a general
consulting agreement, the mere fact that this firm billed Sodexho more
than $18,000 to *review the RFP* and perform other unspecified tasks is
insufficient to meet the required documentation standards.  At a minimum,
the absence of more specific information precludes a determination that
the cost was reasonable based on a review of whether, in its nature and
amount, it does not exceed that which would be incurred by a prudent
person in the preparation of a proposal.  Patio Pools of Sierra Vista,
Inc.--Claim for Costs, supra.   
    
In its August 30 claim with the Navy, Sodexho submitted a $4,972.20
invoice for a consultant for *professional services* rendered over 5 days
in May and June 2001, inclusive of travel expenses.  The invoice contains
no information as to the purpose of these services or how they are related
to the preparation of the proposal.  In response to the Navy's request for
more substantiation of its consultant expenses, Sodexho's September 27
letter provided its agreement with this consultant and no other details. 
The agreement, which does not reference this procurement, lists as its
purpose the setting forth of terms and conditions upon which Sodexho
retains this consultant to *assist in the government RFP response efforts
and other RFP activities,* and describes the particular consulting
services as to *be determined by [Sodexho's] designated representative.* 
Agreement P:P: 1, 7.  On December 30, nearly 6 months after our decision
was issued, Sodexho gave the Navy a declaration from the Sodexho employee
responsible for leading the proposal effort that included a more detailed
explanation of the nature of this consultant's services.  The Navy objects
to Sodexho's claim for these costs, arguing that Sodexho failed to file a
timely, adequately supported claim and has, as a consequence, forfeited
its right to recover these costs.  We agree.
    
Our Bid Protest Regulations, 4 C.F.R. S: 21.8(f)(1), provide that when we
find that an agency should reimburse a protester for its appropriate
costs:
    
[t]he protester shall file its claim for costs, detailing and certifying
the time expended and costs incurred, with the contracting agency within
60 days after receipt of GAO's recommendation that the agency pay the
protester its costs.  Failure to file the claim within that time may
result in forfeiture of the protester's right to recover its costs.
    
Consistent with the intent of our Regulations to have protest matters
resolved efficiently and quickly, the 60-day timeframe for filing claims
with the contracting agency was specifically designed to avoid the
piecemeal presentation of claims and to prevent unwarranted delays in
resolving such claims.  That timeframe affords protesters ample
opportunity to submit adequately substantiated, certified claims.  HG
Props. A, L.P.--Costs, B-277572.8, Sept. 9, 1998, 98-2 CPD P: 62 at 2;
Test Sys. Assocs., Inc.--Claim for Costs, B-244007.7, May 3, 1993, 93-1
CPD P: 351 at 4.  Failure to initially file an adequately supported claim
in a timely manner results in forfeiture of a protester's right to recover
costs, irrespective of whether the parties may have continued to negotiate
after the 60-day period expired.  Wind Gap Knitwear, Inc.--Claim for
Costs, B-251411.2, B-251413.2, Aug. 30, 1995, 95-2 CPD P: 94 at 3. 
    
The record clearly shows that Sodexho failed to file a legally sufficient
cost claim within the time required for this expense.[18]  The claim
initially submitted to the Navy did not identify in any way the purpose
for which this expense was incurred and despite the Navy's advice to this
effect, Sodexho did not submit any sufficiently detailed information until
its piecemeal effort nearly 6 months after our decision was issued, well
beyond the required 60-day timeframe.  Sodexho has not offered any
justification for its dilatory actions, and we find none.  See Aalco
Forwarding, Inc.,  et al.--Costs, B-277241.30, July 30, 1999, 99-2 CPD P:
36 at 5.
    
As a final matter, the Navy accepted as allowable the expenses associated
with the services of two consultants, one that provided technical writing
services and one that provided support in pricing Sodexho's proposal.  Our
review of Sodexho's claim leads us to recommend the payments of these
costs, in the total amount of $7,304.42.  When this amount is combined
with the reimbursable costs of the first consultant discussed above,
Sodexho is entitled to recover a total of $29,128.29 for the efforts of
its consultants in the preparation of its proposal.        
    
Outside Counsel
    
Sodexho asks to be reimbursed $19,210.27 for the costs of two outside law
firms retained to assist it in its proposal preparation efforts. 
Sodexho's Feb. 10, 2003 GAO Claim, B&P Cost Spreadsheets.  We find the
firm entitled to recover $11,469.37 for these expenses, inclusive of
attorneys' fees and expenses.
    
The $5,003.19 in claimed expenses for the first law firm is supported by
that firm's billing statement that lists, as its purpose, *Sales/use tax;
Pensacola Naval Regional Complex.*  B&P 2000 ref. PP.  The invoice
documents 34.9 hours of attorney time, as well as $3.19 in photocopying
and long-distance telephone expenses.  The invoice notes that the time
spent preparing the firm's opinion on the issue exceeded the agreed cap of
$5,000, and only billed the amount of $5,000 plus expenses.  The Navy has
disallowed 19.2 of these hours, claiming that there is insufficient
information in the billing statement to ascertain the purpose of the task
or a nexus between the task and proposal preparation.  We do not agree. 
When read as a whole, and in conjunction with other documentation in the
claim, all of these hours are associated with providing legal advice on a
tax issue relevant to proposal preparation.  As a result, we recommend the
reimbursement of this $5,003.19 invoice.[19]
    
The $14,207.08 in claimed expenses for the second law firm are supported
by two of that firm's billing statements.  The first statement groups
tasks under various headings, the first of which is *Pensacola Procurement
- FOCI - RFP Review - Questions.*  B&P 2000 ref. AB.  Under this heading
are tasks performed by two attorneys over 34.1 hours, with $567.58 charged
for expenses.  The Navy has disallowed .2 of these hours, for a task
described as *Telephone B. Fuller regarding FOCI* because it is not clear
to what *FOCI* refers.  The second statement grouped two tasks under the
heading, *Pensacola - FOCI,* B&P 2000 ref. PQ, and billed Sodexho for 6.4
hours with no further description.  Sodexho has rejected the Navy's
statement that it does not understand how *FOCI* relates to proposal
preparation, arguing that the Navy is questioning its legal judgment. 
While this acronym presumably refers to issues associated with *foreign
ownership, control, or influence,* Sodexho's failure to clarify the matter
precludes us from ascertaining whether these tasks are related to the
preparation of this proposal.  We therefore recommend that all hours
related to these tasks be disallowed.  We find that Sodexho is entitled to
recover its expenses for 33.9 hours in attorneys' fees.  The statutory
attorneys' fee cap of $150 per hour is applicable here but, as discussed
below, we have concluded that it is appropriate to adjust that fee cap for
the cost of living.  Using the methodology discussed in detail below, we
have established that the adjusted fee cap for these services is $165 per
hour.[20]  Accordingly, we recommend that Sodexho be reimbursed $5,593.50
in legal fees and expenses of $567.58, for a total of $6,161.08.
    
Out-of-Pocket Expenses
    
Sodexho asks to be reimbursed $4,687.21 in out-of-pocket expenses to 12
vendors for such things as telecommunications services, office supplies,
courier services, and publications services associated with the
preparation of its proposal.  The Navy concluded that Sodexho was entitled
to recover only $16.44 of the claimed amount because, for most of the
claimed expenses, Sodexho failed to identify the purpose for which the
expense was incurred and how it was related to proposal preparation.  The
Navy concluded that the evidence for the remaining expenses showed that
they were incurred in contravention of the RFP's explicit admonition
against the preparation of an unnecessarily elaborate proposal.  We
recommend the reimbursement of $16.44 in out-of-pocket expenses.
    
Claims for out-of-pocket expenses must be supported by documentation that
identifies the amount claimed, the purpose for which the expense was
incurred, and how the expense relates to the proposal preparation
process.  See Komatsu Dresser  Co.--Claim for Costs, B-246121.2, Aug. 23,
1993, 93-2 CPD P: 112 at 8.  Sodexho's support for most of its claimed
out-of-pocket expenses consists of vendor invoices that contain no
evidence of the purpose of the expense or how the expense was related to
the proposal preparation process.  For example, Sodexho has presented a
$495.95 invoice from a firm for *re-stocking & flight cancellation* with
no explanation; an internal office transmittal indicating a vendor's bill
of $481.27 for unspecified office supplies; a $485.19 invoice from Kinko's
for unspecified services; and a $281.07 invoice from a delivery service
for unspecified deliveries.  There is no explanation in the record for any
of these invoices.  Since we cannot ascertain the purpose for which any of
these expenses were incurred or how, if at all, they relate to the
proposal preparation process, we find that Sodexho has failed to
adequately document these expenses.  The only out-of-pocket expense that
is adequately documented is a $16.44 delivery on a Federal Express invoice
indicating a shipment to the Navy.[21]   
    
Sodexho has also submitted invoices from three vendors for various
publication services.  The first is a $200 invoice for the delivery of two
stock photographs, one of a laundry lady and one of a window washer, for
use in Sodexho's proposal.  The second is a $322.04 invoice for seven
posters, and the third set of invoices, totaling $1,604.67, are for custom
color tabs.  The Navy declined to reimburse Sodexho for any of these
expenses, arguing that the costs incurred unreasonably violated the RFP's
prohibition against excessively elaborate proposals.  We agree.
    
Section L.III. of the RFP informed offerors that:
    
Unnecessary elaboration or other presentations beyond that sufficient to
present a complete and effective proposal are not desired and may be
construed as an indication of the offeror's lack of understanding of cost
consciousness.  Elaborate art work, expensive paper or bindings, and
expensive visual or other presentation aids are neither necessary nor
desired.
    
The Navy argues that expensive photographs, color posters, and color
proposal tabs, such as those at issue here, are encompassed by this
description of items that were *neither necessary nor desired.*  In view
of the explicit RFP admonition against the use of elaborate artwork and
expensive visual aids, and in the absence of any reasonable rebuttal from
Sodexho, we can only conclude that these costs are unreasonable because
they exceed those which would be incurred by a prudent person in preparing
a proposal.  See Ervin & Assocs., Inc.--Costs, B-278850.2, Aug. 1, 1999,
99-2 CPD P: 23 at 4.   
    
PROTEST COSTS
    
Sodexho requests the reimbursement of $233,678 for the costs of filing and
pursuing its protest.  Sodexho's Feb. 10, 2003 GAO Claim, Basis of
Estimate Memorandum, Table 1.  Most of these costs are in the form of fees
for outside counsel, which are supported by the law firm's billing
statements.  The remaining costs are associated with the efforts of
consultants and Sodexho employees, and are documented by invoices,
calendars, and other information. 
    
The Navy advised Sodexho that its initial claim was excessive and
insufficiently supported, and asked for additional documentation.  Among
other things, the Navy stated that Sodexho's claimed costs for outside
counsel must be identified with specific tasks performed in pursuing the
protest and, to the greatest extent possible, should be broken down by
specific protest issues.  In this regard, the Navy stated that Sodexho was
only entitled to recover the costs associated with its successful protest
issue, which it believed represented a relatively small portion of the
overall protest submissions.  In its reply, Sodexho denied that its costs
were excessive and unreasonable.  The firm noted that the legal fees and
invoices in the claim reflected the law firm's customary detailed account
of legal services rendered to a client; stated that the record contained
numerous indications as to the primary legal issues upon which attorneys,
consultants, and Sodexho employees were focused at various times; and
generally described the role played by its consultants and employees. 
Sodexho also disputed the Navy's assertion that it was only entitled to
recover the costs associated with its successful protest issue and
rejected the Navy's arguments that its efforts in this regard were
minimal.  In its November 21 response to Sodexho, which contained analyses
of the allowability of each discrete expense, the Navy did not alter its
position.  The Navy stated that, even if properly documented, Sodexho was
entitled to no more than 5 percent of its claimed protest costs. 
    
As with proposal preparation costs, a protester seeking to recover the
costs of pursuing its protest must submit sufficient evidence to support
its monetary claim.  Innovative Refrigeration Concepts--Claim for Costs,
B-258655.2, July 16, 1997, 97-2 CPD 19 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, the costs do not exceed those that would be incurred by a prudent
person in pursuit of a protest.  Galen Med. Assocs., Inc.--Costs,
B-288661.6, July 22, 2002, 2002 CPD P: 114 at 2.  Our Office will
recommend that protesters recover costs attributable to hours spent in
pursuit of a protest only if those costs were reasonably necessary to the
protest effort.  See JAFIT Enters., Inc.---Claim for Costs, B-266326.2,
B-266327.2, Mar. 31, 1997, 97-1 CPD P: 125 at 2-4.  The claim for
reimbursement must, at a minimum, identify the amount claimed for each
individual expense, the purpose for which the expense was incurred, and
how the expense relates to the protest.  Aalco Forwarding, Inc., et
al.--Costs, supra, at 4.  Where, as here, attorneys' fees are sought to be
recovered, evidence from the attorneys involved must be submitted,
including, for instance, copies of bills from the attorneys listing the
dates the services were performed and the hours billed to the protester. 
Id.  As a threshold matter, we address the question whether Sodexho's
recovery should be limited to the costs incurred with respect to its one
successful protest issue.
    
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.  Price Waterhouse--Claim for Costs, B-254492.3, July 20,
1995, 95-2 CPD P: 38 at 3.  Nevertheless, we will limit a successful
protester's recovery of protest costs where a part of its costs is
allocable to a losing protest issue that is so clearly severable as to
essentially constitute a separate protest.  Id.; Department of the
Navy--Request for Recon. and for Modification of Remedy, B-246784.4, Feb.
17, 1993, 93-1 CPD P: 147 at 6; Interface Flooring Sys., Inc.--Claim for
Attorneys' Fees, B-225439.5, July 29, 1987, 87-2 CPD P: 106 at 3.  The
mere fact that all protest allegations challenge the agency's conduct of
an A-76 procurement does not intertwine the issues.  Issues are
intertwined where they share a common core of facts, are based upon
related legal theories, and are otherwise not readily severable.  Price
Waterhouse--Claim for Costs, supra, at 4.  
    
Sodexho argues that all of its protest allegations arose from a common
core of facts flowing from its basic assertion that the use of NAFI
employees in the agency's MEO resulted in a flawed and unfair
procurement.  We agree with the Navy, however, that Sodexho's successful
protest allegation relied on different sets of facts and legal theories
than its unsuccessful protest allegations.  Sodexho's allegation that the
Navy's overall process was flawed and unfair because most of the MEO was
comprised of NAFI employees focused both on the Navy's failure to so
notify offerors and on the legality of including NAFI employees at all,
and relied on arguments such as whether NAFI employees are federal
employees and whether NAFI employees should be included in A-76 studies at
all.  In contrast, Sodexho's challenge to the adequacy of the review by
the Navy's independent reviewing official (IRO) relied on such arguments
as the alleged failure to give the IRO supporting documentation for key
MEO assumptions, and alleged inadequacies in the IRO's own documentation. 
Each of Sodexho's two remaining protest allegations was grounded in its
own distinct set of unrelated facts with different underlying legal
theories to challenge the in-house cost proposal.  Sodexho's argument that
the MEO failed to meet all of the PWS requirements compared the details of
the in-house plan with the PWS requirements, and Sodexho's argument that
the agency failed to ensure that the in-house plan equaled the level of
performance and performance quality offered by Sodexho--the *leveling*
argument--compared alleged strengths in Sodexho's proposal with the
contents of the in-house plan. 
    
Sodexho's argument that the MEO's use of NAFI employees was intertwined in
each of these allegations is unavailing.  A review of Sodexho's pleadings
shows that the references to the Navy's use of NAFI flextime employees in
the context of its IRO allegation are merely illustrative of its
substantive arguments; that those same references in the context of its
*leveling* allegation are merely incidental to its substantive arguments;
and that Sodexho's allegation that the MEO did not meet the requirements
of the PWS contain no such references at all.  To the extent that there
are shared facts between these allegations, we do not find them to
constitute a core set of facts; moreover, we find that the legal theories
underpinning each allegation are distinct and readily severable.  As a
result, we find that Sodexho is entitled to recover only those costs
incurred in pursuit of its successful protest issue. [22]
    
The Navy maintains that Sodexho's claim is structured in such a way that
it is hard to break out the expenses associated with its successful
protest issue from those associated with the unsuccessful protest issues. 
The Navy takes the position that, in any event, Sodexho's costs associated
with the NAFI issue are minimal.  The Navy's spreadsheets analyzing each
expense in Sodexho's claim reveal that the Navy found many of these
expenses to be insufficiently detailed to show they were related to
pursuing the protest; as a result, the Navy found them to be entirely
unallowable.
    
In Interface Flooring Sys., Inc.--Claim for Attorneys' Fees, supra, the
first case in which we limited a firm's recovery of bid protest costs to
the issues on which the protester had prevailed, we stated that, in order
for the protester to recover its costs, its attorneys were responsible for
*allocating and certifying to [the agency] the time charged among the
issues in the protest.*  Id. at 3-4.  We also have recognized, however,
that it is not the practice of the legal profession generally to delineate
the specific amount of time spent on a specific issue during the course of
a legal proceeding.  ViON Corp.--Claim for Costs, B-256363.3, Apr. 25,
1995, 95-1 CPD P: 219 at 4; Komatsu Dresser Co.--Claim for Costs, supra,
at 5; CBIS Fed., Inc.--Claim for Costs, B-245844.5, May 18, 1993, 93-1 CPD
P: 388 at 4.  Thus, while a firm which has been given a partial award of
attorneys' fees, and other costs runs the risk of a lower award than might
be justified had the firm segregated its costs according to the issues
presented, it will not be barred from recovery of some part of the
unsegregated costs.  ViON Corp.--Claim for Costs, supra.
    
We now turn to the question of an appropriate amount of recovery.  The
Navy's position that Sodexho is entitled to recover 5 percent of its
protest costs--if they are otherwise properly documented--is based upon
the Navy's limited definition of Sodexho's successful protest allegation. 
Sodexho, on the other hand, has not offered a percentage or any other
method to allocate the costs of its successful protest issue other than by
citing the task descriptions in its documentation and the general roles
played by its attorneys, consultants, and employees.  In the absence of an
agreement by the parties, or even an articulated method of computing a
fair amount, we will determine an amount that we think is appropriate
based on consideration of the available evidence.  Komatsu Dresser
Co.--Claim for Costs, supra, at 5; CBIS Fed., Inc.--Claim for Costs,
supra, at 4.
    
We think consideration of content--e.g., level of complexity--is the best
starting point for reaching a fair estimate of the effort behind a protest
argument.  Komatsu Dresser Co.--Claim for Costs, supra, at 4.  In this
connection, we agree with Sodexho that the NAFI protest allegation was the
most legally complex and significant issue raised in the protest,
involving the research of materials not typically relevant to A-76
protests and the analysis of this first-impression issue.  However, our
view of the level of complexity of an issue must be considered together
with the content of the pleadings, which typically illustrate the level of
effort expended in supporting a protest argument.   
    
Sodexho argues that, after the administrative appeal was filed, *[t]he
vast majority of legal research effort and drafting effort by the
attorneys was devoted to the NAFI-related issues.*  Sodexho's Letter of
Sept. 27, 2002 at 7.  According to Sodexho, a side-by-side comparison of
its pleadings throughout this matter shows that the issue concerning
alleged errors in the MEO and the *leveling* issue were presented in
detail during the administrative appeal, and the protest arguments on
those issues primarily repeated the arguments contained in the
administrative appeal and required *little more than a logistical exercise
of taking those issues from centerpiece arguments in the Administrative
Appeal, to Exhibit status* as  attachments.  Id. at 6.  Sodexho further
states that, aside from the NAFI issue, the only issue during the protest
that involved significant legal effort was the supplemental agency-level
protest concerning the independence of the IRO.  Id. at 7. 
    
At Sodexho's suggestion, we have conducted a side-by-side comparison of
all of its pleadings in this matter, beginning with its administrative
appeal and ending with its response to a post-comments Navy filing.  Our
review confirms that the issues concerning alleged MEO errors and
*leveling* are substantially similar from pleading to pleading, and that
they primarily took the form of attachments after the administrative
appeal.  One attachment included 12 categories of alleged *leveling*
improprieties, and another attachment made detailed allegations of more
than         40 alleged MEO errors.  Although it took the Navy more than
180 pages of its 291-page combined contracting officer's statement and
legal memorandum to address the allegations made in these two attachments,
a review of Sodexho's comments confirms that it did, apparently, expend
little additional effort on these issues.  With limited additional
argument, the firm incorporated by reference the same attachments and
advised that it continued to pursue the claims therein.  Sodexho's May 21,
2002 Comments at 45, 55.  Consequently, we have no basis to dispute
Sodexho's position that *very little additional work was devoted to
[these] issues.*  Sodexho's Letter of Sept. 27, 2002 at 6.
    
However, this same side-by-side comparison of the pleadings also provides
insight into the level of effort Sodexho expended on the NAFI issue.  A
comparison of the administrative appeal and the initial agency-level
protest shows that the principal difference between the two documents with
respect to the NAFI issue is a rearrangement of the existing arguments;
other differences in the latter document are the addition of some factual
information learned from the administrative appeals decision and brief
responses to its conclusions.  There is little evidence of additional
legal research and analysis.  Compare Sodexho's Oct. 9, 2001
Administrative Appeal, at 31-45, with Sodexho's Dec. 27, 2001 Initial
Agency-Level Protest, at 10-30.  A comparison of the initial agency-level
protest and the GAO protest shows even more similarities.  The differences
in the latter document are the addition of one new argument comprising one
page and supported by one legal citation, as well as some additional
factual information learned from the agency-level report, brief responses
to the Navy's arguments, and a reference to a newly-produced document. 
Compare Sodexho's Dec. 27, 2001 Agency-Level Protest, at 10-30, with
Sodexho's Apr. 4, 2002 GAO Protest, at 16-40.  It was not until Sodexho
filed its comments on the agency's report on the GAO protest that the firm
included any substantive additional legal argument and analysis on some of
the NAFI issues.  Compare Sodexho's Apr. 4, 2002 GAO Protest, at 16-40,
with Sodexho's May 21, 2002 GAO Comments, at 13-25. 
    
While we do not question Sodexho's assertion that the *vast majority of
legal research effort and drafting effort by the attorneys was devoted to
the NAFI-related issues,* Sodexho's Letter of Sept. 27, 2002 at 7, the
dearth of evidence of this effort in the pleadings, combined with the
general descriptions of many of the firm's efforts as evidenced by its
billing statements, is a counterweight to the fact that the NAFI issue was
the most complex issue in the protest.  Considering all of these factors
together, it is our judgment that the four protest issues--and the effort
Sodexho expended on them--should be given equal weight.  See Komatsu
Dresser Co.--Claim for Costs, supra, at 5-6.  We conclude that 25 percent
is a fair estimate of the percentage of Sodexho's effort related to the
NAFI issue.  As a result, while tasks that are clearly linked to the
successful protest issue or to the unsuccessful protest issues will be
allowed or disallowed, as appropriate, as a general matter, the remaining
pool of hours will be subject to the 25 percent allocation rate.
    
Accordingly, we have reviewed all of Sodexho's claimed expenses for filing
and pursuing its protest using the following methodology.  First, we have
disallowed all hours that are clearly associated with unsuccessful protest
issues; all hours related to lobbying or other legislative advocacy
activities;[23] and all hours related to pursuing either the
administrative appeal or to compiling documentation to submit in its claim
to the Navy.  Second, we allowed all hours that are clearly associated
with effort that would have been expended whether or not the unsuccessful
protest issues were raised, such as those associated with reviewing the
protective order and converting the initial GAO protest to an agency-level
protest.  ViON Corp.--Claim for Costs, supra, at 3.  Third, we allowed all
hours that are clearly associated with the successful protest issue. 
Finally, we allowed 25 percent of all the remaining hours and 25 percent
of the expenses. 
    
Sodexho Employees
    
Sodexho asks to be reimbursed $500.65 for the efforts of two of its
employees in pursuit of its protest.  Sodexho's Feb. 10, 2003 GAO Claim,
Protest Costs (PC) Spreadsheets.  Sodexho states that its employees'
assistance was associated with providing advice about the contents of its
proposal and its revisions. 
    
We permit the recovery of in-house labor costs incurred in relation to a
sustained protest where the in-house labor costs directly relate to the
protest.  Gulf Gas Utilities Co.--Claim for Costs, B-242650.7, Feb. 13,
1997, 97-1 CPD P: 72 at 2.  Reimbursement of costs is allowed where the
protester has submitted sufficient documentary evidence to support them
and where these costs, once sufficiently proven, are shown to be
reasonable and necessary to or otherwise related to the actual protest. 
Commerce Land Title of San Antonio, Inc.--Claim for Costs,              
B-249969.2, Oct. 11, 1994, 94-2 CPD P: 131 at 2. 
    
We agree with the Navy that the 3.5 hours of labor incurred by one
employee on such generic tasks as reviewing pleadings and discussing the
status of the protest are allowable, subject to the 25 percent allocation
rate, or .88 hours, for a total of $62.52.  Sodexho Protest Costs (PC)
ref. A.  A second employee has claimed 4 hours of labors for various
tasks.  We find that 1.6 hours are fully reimburseable because they
concern the parties' agreement to convert the initial GAO protest to an
agency-level protest; .8 hours of labor are disallowed because they
concerned the supplemental agency-level protest; and 1.6 hours for
reviewing the initial GAO protest are allowable, subject to the allocation
rate.  These calculations yield 2 allowable hours, for a total of
$194.67.[24]  PC ref. B.   
    
While not included in its spreadsheets, Sodexho's documentation in support
of this portion of its claim includes an additional 72.8 hours of labor
for the employee responsible for preparing its proposal, and has supported
this claim with this employee's daily calendar.[25]  PC ref. B3.  Our
review of the calendar shows that          4 hours are fully reimbursable
because they were associated with the conversion of Sodexho's initial GAO
protest to an agency-level protest; 16 hours spent performing such generic
tasks as reviewing the agency report and other correspondence are
allowable, subject to the allocation rate; 50.4 hours are unallowable
because the underlying task descriptions show that they were devoted to
gathering material to file the cost claim with the Navy, and the remaining
hours are unallowable because the underlying task description shows that
it was associated with unsuccessful protest issues.  These calculations
yield 8 allowable hours, for a total of $382.29. 
    
In conclusion, we find that Sodexho is entitled to recover a total of
$639.48 for the efforts of its employees in filing and pursuing the
protest.
    
Consultants
    
Sodexho requests reimbursement of $25,898.89 for the services of two
consultants who assisted with the filing and pursuit of its protest. 
Sodexho's Feb. 10, 2003 GAO Claim, PC Spreadsheets.  Our review of the
documentation submitted by the firm shows that none of these claimed
expenses are allowable.
    
Sodexho asks to be reimbursed $22,606.65 for the services of the first
consultant.  The documentation supporting this request consists of two
references, an *office transmittal* whose purpose is identified as
*government proposals,* and a summary of invoices for the consultant's
*support to Sodexho's [p]rotest to the Department of the Navy's A-76
decision for Community Support Services at Pensacola Naval Regional
Complex, NAS, Pensacola.*  PC ref. C.  The only attached invoice states
that the services were for review of the in-house government estimate, and
Sodexho advised the Navy in its September 27, 2002 letter that this
consultant's effort involved calculating cost differentials between
various categories of NAFI employees and civil service employees,
analyzing cost comparisons and cost-type adjustments, and estimating MEO
costs, most of which was done during the administrative appeal.  Sodexho
states that a small part of its time in the protest was devoted to the
issues concerning whether the MEO met the PWS requirements and the
*leveling* issue.  Given the documentation in the record, we must conclude
that all of these costs are allocable to the unsuccessful protest issues
and do not recommend their reimbursement. 
    
Sodexho also asks to be reimbursed $3,292.24 for the costs expended by its
second consultant in pursuing the protest.  PC refs. D, E, G.  Sodexho
explains that this consultant provided information on the history of the
procurement, copies of documents, and advice on the contents of the
proposal, and that he reviewed the Navy's pleadings.  The documentation
underlying this aspect of the claim is comprised of three invoices.
    
The first invoice was originally for 5 days of labor, but the *5* has been
crossed off and replaced by a *2.*  Sodexho P ref. D.  The purpose
identified for this labor was *[r]eviewed and informed area leaders
concerning Sodexho's GAO protest with regard to the Navy's decision to
retain CSS work in house*; other listed tasks have been crossed off. 
Absent any rebuttal from Sodexho, we agree with the Navy that this task
appears to be public relations work, and not work performed in pursuit of
the protest.  The second invoice was originally for 15 days of labor, but
the *15* has been crossed off and replaced with a *5.*  The purpose cited
for this labor was, *[r]eview Navy Pensacola CSS documents and assisted in
the preparation of a supplemental protest which was filed on February 25,
2002 (3 days)*; other listed tasks have been crossed off.  Sodexho P ref.
E.  We agree with the Navy that the 3 days spent working on the
supplemental protest are not allowable because that protest was limited to
an unsuccessful protest issue.  Given the timing, and in the absence of
any other explanation, we assume that the document review is associated
with that task and also unallowable.  Finally, the third invoice was
originally for 15 days of labor, but the *15* has been crossed off and
replaced with a *3.*  Sodexho P. ref. G.  The purpose identified for this
labor was, *During this period I reviewed Sodexho's Miramar proposal that
was delivered April 10, 2002.  I reviewed questions forwarded from the USA
Huntsville pertaining to Sodexho's Kwajalein proposal.  Participated in
conference calls related to various aspects of Sodexho's GAO protest of
the Pensacola CSS program. Met with Sodexho Director of Business
Development to accept a turn over of all files concerning various
programs.*  Id.  While we acknowledge that one of these tasks is related
to the pursuit of the protest, Sodexho has given us no way to segregate
this time from the time spent on the other, unrelated tasks.  None of
these unrelated tasks have been crossed out, and there is no way to
ascertain whether the crossing out of the days was the proper segregation
of allowable costs or whether the consultant simply revised the number of
days he billed Sodexho for all of these tasks.
    
Outside Counsel
    
Sodexho asks to be reimbursed $207,040.74 in legal fees and out-of-pocket
expenses incurred in pursuit of its protest.  Sodexho's Feb. 10, 2003 GAO
Claim, PC Spreadsheets.  The firm's billing statements show that these
costs represent the services of seven attorneys--three partners and four
associates--working a total of 767 hours, plus certain out-of-pocket
expenses such as commercial messenger services, long distance telephone
fees, and internal reproduction costs.  After scrutinizing the task
descriptions found in each billing statement, we applied the above
methodology to ascertain the allowable costs. 
    
First, we disallowed 209 hours that we viewed as clearly associated with
unsuccessful protest issues.  Tasks in this category included reviews of
analyses of MEO *shortcomings,* *problems,* or *mistakes,* and other
analyses by the consultant who provided such data; analyses of GAO
decisions in A-76 procurements since, at that time, those decisions were
relevant only to Sodexho's unsuccessful protest issues; drafting protest
sections regarding MEO staffing deficiencies; preparing and reviewing the
attachments discussed above; efforts associated with the supplemental
agency-level protest; and reviews and revisions to the leveling argument. 
PC refs. L, M, D2, F1, F2, G2, G3.  We also disallowed 17 hours related to
lobbying or other legislative advocacy activities, and .1 hour for a task
associated with the administrative appeal.[26] 
    
Second, we allowed all 23.7 hours that were clearly associated with effort
that would have been expended whether or not the unsuccessful protest
issues were raised.  ViON Corp.--Claim for Costs, supra, at 3.  These
involved such tasks as reviewing the protective order and converting the
initial GAO protest to an agency-level protest.  Third, we allowed all
37.4 hours that were clearly associated with the successful protest
issue.  Tasks in this category included researching government directives
pertaining to NAFIs; researching the Navy's use of NAFI personnel; and
researching defenses to the Navy's position on the NAFI issue.
    
Finally, we allowed 25 percent of the remaining 478.1 hours, or 119.5
hours, for the remaining tasks because most are so generically described
that we cannot ascribe them to a particular protest issue.  These generic
descriptions include such things as *conference call on Pensacola A-76
issues*; *continue review of Pensacola AAA decision to identify potential
protest grounds*; *research and start drafting of Sodexho protest to GAO*;
*discuss Sodexho protest tactics*; *evaluate potential Sodexho GAO protest
issues*; *review documents and discuss strategy*; *discuss status of
Pensacola A-76 protest*; *review government response to Sodexho protests*;
*continue analysis of the CO's denial of Sodexho's agency-level protests*;
*conferences with [other attorneys] regarding Pensacola A-76 issues*; and
*revisions to finalize comments to agency report.*    See, e.g., PC refs. 
L, M, D2, F1, F2, G2, G3.  
    
Based on the application of the above methodology, we recommend that
Sodexho be reimbursed the costs of 180.6 hours expended by its outside
counsel in filing and pursuing its protest, and 25 percent of the
$3,179.49 in out-of-pocket expenses associated with those hours, or
$794.88.  Before we can determine the total amount Sodexho is entitled to
recover for its attorneys' fees, we must determine the proper hourly rate
or rates to be paid.
    
Statutory Ceiling on Attorneys' Fees 
    
As amended by section 1403(b)(2) of the Federal Acquisition Streamlining
Act of 1994 (FASA), Pub. L. No. 103-355, 108 Stat. 3243, 3289 (1994), the
Competition in Contracting Act of 1984 provides that:
    
(c)(1) If the Comptroller General determines that a solicitation for a
contract or a proposed award or the award of a contract does not comply
with a statute or regulation, the Comptroller General may recommend that
the Federal Agency conducting the procurement pay to an appropriate
interested party the costs of --
(A) filing and pursuing the protest, including reasonable attorneys' fees
and consultant and expert witness fees; and
(B)  bid and proposal preparation.
    
31 U.S.C. S: 3554(c)(1).
    
Section 1403(b)(2) of FASA also mandated a limit or *cap* on the hourly
fees that could be paid to attorneys pursuant to such recommendations:[27]
    
(c)(2) No party (other than a small business concern . . . ) may be paid,
pursuant to a recommendation made under the authority of paragraph (1)--
. . .
    
(B) costs for attorneys' fees that exceed $150 per hour unless the agency
determines, based on the recommendation of the Comptroller General on a
case by case basis, that an increase in the cost of living or a special
factor, such as the limited availability of qualified attorneys for the
proceedings involved, justifies a higher fee.
    
31 U.S.C. S: 3554(c)(2)(B). 
    
It is undisputed that Sodexho is not a small business concern, and that
the attorneys' fees it claims pursuant to our recommendation are subject
to this statutory fee cap.  In this regard, the Navy is correct that the
statutory fee cap applies to attorneys' fees incurred in both the filing
and pursuit of a protest and those incurred in the preparation of a bid or
proposal.  31 U.S.C. S: 3554(c)(2) (making the cap applicable to any
recommendation made under the authority of 31 U.S.C. S: 3554(c)(1)).
    
During its pursuit of the claim with the Navy, Sodexho acknowledged the
statutory fee cap of $150 per hour, but requested reimbursement of its
attorneys' fees in the amount of $180 per hour.  Sodexho justified this
increase on a cost of living adjustment (COLA) based on the Consumer Price
Index for *All Urban Consumers, U.S. City Average, All Items* (CPI-U),
stating that it is a measure commonly used to determine the COLA-adjusted
hourly rate for attorneys under the Equal Access to Justice Act (EAJA). 
See 28 U.S.C. S: 2412(d)(2)(A) (2000).[28]  The Navy informed Sodexho that
it had no independent authority to approve a rate higher than $150 per
hour for attorneys' fees because the Comptroller General's recommendation
to do so is a prerequisite for exercising such authority.  In any event,
the Navy advised Sodexho that, *as Congress has not seen fit to increase
that statutory rate, the Navy would oppose any adjustment to that rate for
costs incurred in this case.*  Navy's Letter of Sept. 13, 2002 at 4.
    
In its request to our Office, Sodexho again acknowledges the existence and
applicability of the statutory fee cap, but argues that the Comptroller
General should recommend an upward adjustment in the cap to account for
the increase in the cost of living that has affected the practice of
government contracts law in the Washington, D.C. area in the years since
FASA was enacted. [29]  Sodexho argues that the appropriate rate, with a
cost of living adjustment, is calculated by multiplying the FASA rate of
$150 by the current CPI-U measure and dividing the product by the  CPI-U
for the month the cap was imposed, October 1994.  Sodexho has not provided
its actual calculations, or the actual CPI data it utilized to make these
calculations, but asserts that they reflect a 20 percent increase, making
$180 the COLA-adjusted hourly rate.  See Sodexho's Feb. 10, 2003 GAO Claim
at 60.
    
The Navy does not specifically address the issue of a cost of living
adjustment, but argues that the statutory fee cap is *more than
reasonable.*  AR Legal Memorandum at 60.  The Navy's principal argument in
support of this position,[30] that the hourly fee Sodexho paid its outside
counsel for legal assistance in the proposal preparation process was
approximately $148 per hour, is inaccurate and irrelevant.  As noted in
our above discussion, Sodexho paid one law firm approximately $148 per
hour for 34.9 hours of services in the proposal preparation process, but
most of Sodexho's legal fees were far in excess of the statutory fee cap. 
The Navy's only other argument is that it is *notable* that Congress has
not chosen to increase the ceiling that it set for attorneys' fees.  Id. 
    
This is the first opportunity we have had to address the question whether
the statutory cap on attorneys' fees should be adjusted to reflect the
cost of living.  In considering the question, we recognize that, while
FASA plainly delegated to the Comptroller General the authority to
recommend such an adjustment on a case-by-case basis, the statute itself
provided little guidance as to when it would be appropriate to do so. 
    
The legislative history of the provision makes it clear that the language
is borrowed from that found in the EAJA.  With respect to an earlier
version of the language, the Senate noted that section 1403 *would also
limit [attorneys' fees] to the [level] established in the Equal Access to
Justice Act for attorneys fees against the United States generally.*  S.
Rep. No. 103-258, at 8 (1994), reprinted in 1994 U.S.C.C.A.N. 2561, 2568. 
The conference report acknowledged the Senate's provision, and its
limitation of attorneys' fees to the level established in the EAJA, and
stated:
    
The House recedes with an amendment that would . . . provide for a $150
limit on attorneys' fees, which is higher than the current EAJA rate.  The
amendment would allow for higher fees if such higher fees are determined
by the agency, based on the Comptroller General's recommendation, to be
justified. . . .
    
The conferees note that the $150 level should be considered as a maximum,
not a minimum.  The conferees do not intend the provision to authorize the
payment of rates that are higher than charged by an attorney in other
similar cases or by other attorneys of similar level of experience in bid
protest cases. 
    
H.R. Conf. Rep. No. 103-712, at 191-192 (1994), reprinted in 1994
U.S.C.C.A.N. 2607, 2621-2622.[31]
    
Lacking specific guidance as to the application of a cost of living
adjustment from either the statutory language or the legislative history,
we have looked to cases interpreting the provision of the EAJA from which
this language was borrowed.  It is axiomatic that when Congress borrows
language from one statute and incorporates it into a second statute, the
language of the two acts should be interpreted in the same way.  See
Greenwood Trust Co. v. Massachusetts, 971 F. 2d 818, 827 (1st Cir. 1992). 
We have considered the rationale of courts that have interpreted the
applicability of the cost of living adjustment to the EAJA's statutory fee
cap, and conclude that their guidance is applicable here, as well. 
    
The Navy argues that Congress itself has not chosen to increase FASA's
statutory fee cap but, just as with EAJA's fee cap, the statute itself
expressly provides for the possibility of a cost of living escalator to
offset the decrease in the value of the $150 rate due to inflation. 
Brickwood Contractors, Inc. v. United States, 49 Fed. Cl. 148, 164 (2001);
see also Sullivan v. Sullivan, 958 F.2d 574, 578 (4th Cir. 1992); Baker v.
Bowen, 839 F.2d 1075, 1084 (5th Cir. 1988).  FASA clearly allows us to
recommend an adjustment for changes in the cost of living, on a
case-by-case basis, but does not require it.  Sodexho is correct, however,
that, in EAJA cases, courts have consistently awarded attorneys' fees in
excess of the statutory cap for a cost of living adjustment.  See, e.g.,
California Marine Cleaning Servs., Inc., v. United States,         43 Fed.
Cl. 724 (1999); Dairy Maid Dairy, Inc. v. United States, 837 F. Supp. 1370
(1993); Kunz Constr. Co., Inc. v. United States, 16 Cl. Ct. 431 (1989);
see also Meyer v. Sullivan, 958 F.2d 1029, 1034 (11th Cir. 1992) (noting
that the Supreme Court has *implied that applying a cost of living
adjustment under the EAJA is next to automatic.*).  As one court has
found, by mentioning it in the statute, Congress intended that the cost of
living be seriously considered and, *[e]xcept in unusual circumstances,*
if there is a significant difference in the cost of living that would
justify an increase in the fee, an increase should be granted.  Baker v.
Bowen, supra. 
    
Although cost of living adjustments under both the EAJA and FASA are
awarded at the discretion of the court, or the Comptroller General,
respectively, we think that the justification for the adjustment is
self-evident if the claimant alleges that the cost of living has
increased, as measured by the Department of Labor's Consumer Price Index
(CPI).  Id.; see also Cox Constr. Co. v. United States, 17 Cl. Ct. 29, 37
(1989).  We decline to impose a requirement that a claimant do more than
request an adjustment and present a basis upon which the adjustment should
be calculated.  See Brickwood Contractors, Inc. v. United States, supra;
California Marine Cleaning Servs., Inc. v. United States, supra.  Since
Sodexho has met this standard, and since the Navy has not articulated any
other objection to a cost of living adjustment, we grant Sodexho's request
for a recommendation in favor of a cost of living adjustment to the
statutory fee cap. 
    
Sodexho did not provide the basis for its calculation that a 20-percent
cost of living adjustment is warranted, and the Navy has not challenged
this figure.  However, it is our responsibility to ensure that it is
accurate to prevent unjustified over-compensation.
    
To adjust the base rate of $150 per hour for increases in the cost of
living as provided by FASA, we must first set a base date from which
increases in the cost of living may be calculated.  We think this should
be the effective date the cap was imposed.  See Brickwood Contractors,
Inc. v. United States, supra; California Marine Cleaning Servs., Inc. v.
United States, supra; Chiu v. United States, 948 F.2d 711, 720 (Fed. Cir.
1991).
    
    
Sodexho asserts that this date is October 1994, the date of FASA's
enactment.  In our view, more careful analysis is required.  Section
10001(a) of FASA provided that the Act and its amendments took effect on
the date of enactment (October 13, 1994), except as otherwise provided. 
In this regard, FASA also provided that each amendment made by the
statute, except as otherwise expressly enumerated at section 10001(c) of
the Act,[32] would apply, in the manner prescribed in the final
regulations promulgated pursuant to section 10002 to implement such
amendment, with respect to any solicitation that was issued, any
unsolicited proposal that was received, and any contract entered into
pursuant to such a solicitation or proposal, on or after the date
described in paragraph (3).  FASA, section 10002(b).  The date referred to
was the date specified in final regulations, but not later than October 1,
1995.  FASA, section 10001(b)(2)(C), 41 U.S.C. S: 251 note (2000). 
Similarly, section 10002, which set forth guidelines for promulgating
final regulations to implement the Act's amendments, provided that each
amendment made by the Act would apply as of October 1, 1995, or the date
specified in the final regulations implementing a particular amendment of
the Act, whichever was earlier.  FASA, section 10002(f)(3), 41 U.S.C. S:
251 note.  See KPMG Peat Marwick, LLP--Claim for Costs, B-259479.4, July
26, 1996, 96-2 CPD P: 43 at 3, 4.  On August 10, 1995, our Office
published final bid protest regulations which implemented FASA--including
the attorneys' fees provision--and which set October 1, 1995 as the
effective date for each of the provisions.  60 Fed. Reg. 40,737 (1995). 
    
Since, in accordance with sections 10001 and 10002 of FASA, the attorneys'
fees ceiling was made effective on October 1, 1995, we establish that date
as our baseline for calculating cost of living adjustments to FASA's
statutory fee cap.
    
The second step for computing a cost of living adjustment to the statutory
fee cap is establishing the appropriate end date or dates.  We view the
appropriate end date as the date the legal services were rendered.  See
California Marine Cleaning Servs., Inc. v. United States, supra, at 734;
Chiu v. United States, supra, at 719; see Doty v. United States, 71 F. 3d
384, 387 (Fed. Cir. 1995).  Here, Sodexho's claim seeks reimbursement for
legal services rendered on the protest from November 5, 2001 through June
3, 2002.  PC refs. L, G4.  Theoretically, fees billed in each month from
November through June should be adjusted based upon the CPI datum for each
month.  California Marine Cleaning Servs., Inc. v. United States, supra. 
However, because the CPI-U was relatively static for these 8 months, we
will use the arithmetic mean of the CPI-U for these months to adjust its
attorneys' fees.  See Chiu v. United States, supra, at 722 n.10 (citing
with approval the use of a single mid-point inflation adjustment factor in
Keyava Constr. Co. v. United States, 15 Cl. Ct. 135, 140 (1988)). 
While Sodexho has not provided the CPI figures for these months, the
relevant data are readily available because the index is widely accepted
as a means of calculating cost of living increases.  California Marine
Cleaning Servs., Inc. v. United States, supra; Kunz Constr. Co., Inc. v.
United States, supra, at 438.  As of October 1995, the CPI stood at
153.7.[33]  For the November 2001-June 2002 period, the mean CPI figure
was 178.4.  Dividing the latter by the former yields a cost of living
adjustment of 16 percent.  We therefore recommend, in this case, that the
adjusted cap be $174 per hour.[34]
    
Of the 180.6 hours we have recommended be reimbursed for outside counsel,
7.4 were billed at rates lower than the $150 cap (for a total of $372.36),
so the cap is irrelevant to those hours.  Applying the statutory fee rate,
as adjusted for the cost of living, to the remaining 173.2 hours, we find
that Sodexho is entitled to recover $30,136.80 for the outside counsel
fees it incurred in filing and pursuing its protest, in addition to the
$794.88 in its legal out-of-pocket expense, for a total of $31,304.04. 
    
CLAIM
    
As a final matter, Sodexho asks to be reimbursed the costs of filing and
pursuing its claim.  Our Bid Protest Regulations, 4 C.F.R. S: 21.6(f),
provide that we may declare a protester entitled to reimbursement of the
costs of pursuing its claim at our Office.  This provision is designed to
encourage the agency's expeditious and reasonable consideration of a
protester's claim for costs.  E&R, Inc.--Claim for Costs,                
B-255868.2, May 30, 1996, 96-1 CPD P: 264 at 6.  The record establishes
that the Navy acted reasonably promptly in negotiating Sodexho's claim
before the matter was submitted to our Office, particularly in view of the
volume and nature of information it had to analyze.  Under the
circumstances, the Navy's handling of Sodexho's claim was reasonable and
expeditious and does not provide the basis for us to recommend the
reimbursement of the costs of pursuing this claim at our Office.
    
CONCLUSION
    
In conclusion, we recommend that Sodexho be reimbursed $96,069.85 for the
costs of preparing its proposal, and $31,943.52 for the costs of filing
and pursuing the protest, for a total of $128,013.37 of its claimed
$687,614.00. 
    
Anthony H. Gamboa
General Counsel
    

   ------------------------

   [1] The process for determining whether activities should be transferred
from in-house to contractor performance, or vice versa, is set forth in
OMB Circular A-76 and that Circular's Revised  Supplemental Handbook
(RSH).  The Department of Defense and its military departments are
required, by separate regulation, to use the Circular and RSH in
performing commercial activities studies.  See 29 C.F.R. S: 169a.15(d)
(2002).  The required process includes preparation of a performance work
statement (PWS) outlining the task and performance requirements,
preparation of a management plan for in-house performance of the PWS tasks
by the agency's *most efficient organization* (MEO), and a competition
among private-sector proposals.  If, as here, that competition is done on
a *best value* basis (that is, one contemplating a cost/technical
tradeoff), the MEO's technical performance plan is compared with the
winning private-sector offer to assess whether or not the same level of
performance and performance quality will be achieved--and, if not, to make
all changes necessary to meet the performance standards of the
private-sector proposal.  RSH, part I., ch. 3, P:P: H.3.d, e.  Once the
playing field is thus leveled, there is a cost comparison between the
private-sector offer and the in-house cost estimate.
[2] In agreeing to treat Sodexho's initial GAO protest as a timely
agency-level protest, the Navy agreed that the costs incurred by Sodexho
in preparing and filing that GAO protest, and costs incurred during the
development of the agency-level protest, would be considered to be costs
incurred under any subsequent GAO protest filed by Sodexho.  In accordance
with this agreement, the Navy has considered Sodexho's costs incurred in
pursuit of the agency-level protest as if incurred in pursuit of the
subsequent GAO protest.  Under the unique circumstances of this case, we
have done the same.
[3] At the Navy's prompting, Sodexho capped its daily consultant fees in
accordance with Federal Acquisition Regulation (FAR) S: 33.104(i) and 5
C.F.R. S: 304.105.
[4] In any event, the record before us does not show that Sodexho failed
to comply with the RFP's requirement, which was to provide appropriate
certification in the event that *any portion of the technical proposal is
written by anyone who is not a bona fide employee of the firm submitting
the proposal.*  RFP S: L.I (emphasis added).  It is undisputed that
Sodexho's consultants--one in particular--spent significant time on
*proposal preparation efforts,* but Sodexho's Director of Business and
Development, who was responsible for the proposal's preparation, has
submitted a sworn declaration in which he states that *Sodexho alone was
responsible for writing [its] technical proposal,* and *Sodexho's
consultants did not write [its] technical proposal* but, rather, assisted
Sodexho employees in *organizing and critiquing [its] cost and technical
proposals.*  Declaration P:P: 11, 12.   
[5] In its request to our Office, Sodexho calculates the costs of filing
its administrative appeal at $102,722.  Sodexho's Feb. 10, 2003 GAO Claim,
Basis of Estimate Memorandum, Table 1.  Sodexho notes that its personnel
spent some time in December 2001 reviewing and analyzing the
administrative appeals decision, which cost has been allocated to the
administrative appeal.  Sodexho asserts that this time could reasonably be
allocated to either the administrative appeal or to the   December 27,
2001 protest, but states that *[u]nless and until it is reasonably
determined that Sodexho is not entitled to recover the administrative
appeal costs, it does not appear necessary to segregate and reallocate
these costs.*  Sodexho's Feb. 10, 2003 GAO Claim at 28 n.8.  Sodexho's
decision not to segregate and reallocate these costs leaves us with no
basis to do so ourselves, and we therefore recommend disallowance of the
entire amount now allocated to the administrative appeal.
[6] The direct labor included in this amount was unadjusted to account for
Sodexho's fringe benefit rate, to which the Navy has not specifically
objected.  From this point in the discussion, our calculations concerning
the allowable costs of Sodexho's direct labor are inclusive of the firm's
fringe benefit rate.
[7] For the year 2000, Sodexho asks to be reimbursed for 920 hours in
direct labor for this employee.  There is nothing in the record that
describes the purpose of these claimed efforts--Sodexho did not submit
this employee's calendar for 2000 or any other description of his tasks. 
Even when we looked to the descriptions in his travel expense reports for
2000, the most specific information we could find was simply, *leading
proposal team for Navy/Pensacola effort.*  We do not think this
information is adequate to show the claimed labor was reasonably related
to the proposal effort, and therefore see no basis for reimbursement of
any of these 920 hours.
[8] The Navy argues that costs incurred before the RFP was issued on
February 4, 2000 are not legitimate proposal costs.  However, we have
never adopted a *bright line* test which necessarily renders all costs
incurred prior to the issuance of a solicitation unrecoverable.  Rather,
we look to see whether, under the circumstances of an individual
procurement, the claimed costs were incurred in anticipation of competing
for the specific contract at issue.  Tri Tool, Inc.--Entitlement to
Costs,     B-265649.4, Sept. 9, 1997, 97-2 CPD P: 69 at 3; see Stocker &
Yale, Inc.--Claim for Costs, supra, at 4-5.  Our review of the record
shows that the Navy has no basis for drawing this bright line based on the
date the solicitation was issued.  As Sodexho points out, the notice of
this procurement, which invited industry comment, was issued in July 1999,
the date from which Sodexho measures its claim.  Up until    
mid-November, the Navy briefed industry and sought advice regarding the
procurement.  On November 24, the draft RFP was issued and the Navy
requested formal comments from industry.  Sodexho states that it reviewed
the draft RFP and submitted a number of comments and/or questions to the
Navy.  In our view, costs incurred before the final RFP was issued are
recoverable provided they meet the other minimum requirements.   
[9] However, since the record shows that this consultant's services were
not limited to tasks associated with this proposal, we find unallowable
the time this employee spent hiring the consultant. 
[10] This same rationale applies to Sodexho's claim for the cost of other
business meals incurred away from a normal duty station.  To the extent
that prior protest-related cost decisions of our Office can be read to
impose a blanket prohibition of the reimbursement of such costs, those
decisions will no longer be followed.
[11] We disallowed all of the out-of-pocket expenses claimed in
conjunction with this employee.  Most items were telephone calls listed on
travel expense reports whose purpose could not be linked to allowable
proposal tasks, but one was a $1,087.80 invoice for a classified ad in a
Pensacola newspaper.  Despite the Navy's statement that it could not
ascertain whether this ad was associated with the preparation of the
proposal, Sodexho has provided no explanation of the purpose of this ad. 
Since we cannot ascertain its link to the effort or its reasonableness, we
disallow this expense.
[12] This amount reflects our disallowance of a $170.85 business meal as
excessive, and our disallowance of a $7 expense that is clearly associated
with another Sodexho project.  B&P 2000 refs. G, V.
[13] Another employee claimed $3,543.73 in travel expenses supported by
expense reports listing such purposes as *business meeting Gaithersburg,*
*proposal meeting Towne Place Suites,* *Mobile,* and *Residence Inn,
Business, Mobile AL.*  B&P 2000 refs. Y, Z.  Given these general
descriptions, and the fact that there is no claim for any direct labor for
this employee, we cannot find these expenses to be related to proposal
preparation.
[14] We also do not recommend the reimbursement of his entry of $900 for
*office space* because there is no indication of the purpose for this
office space.
[15] This employee also submitted two *transfer journal entries* listing a
total amount for her labor with neither a purpose nor the underlying
number of hours.  Since these documents do not contain the requisite
information, we do not recommend the reimbursement of these expenses. 
Moreover, in at least one case, the amount reflects a double-counting of
overtime hours that are already reflected in the biweekly time sheets. 
B&P 2000 refs. BB and CC. 
[16] We have disallowed the $23.16 in claimed telephone expenses because
we cannot ascertain that all of them were linked to the one allowable
purpose we could discern from the invoice.
[17] Sodexho has also submitted three expense reports totaling $309.31 for
*office supplies,* *office supplies in support of Sodexho,* and *SMS AT&T
Business telephone calls* in May and June of 2001.  B&P 2001 refs. M, N,
V.  Since there is no purpose associated with any of these expenses, and
since this consultant conducted other business for Sodexho during this
timeframe, we cannot recommend their payment.  Sodexho has also submitted
a travel expense report in the amount of $2,494.53 for this consultant
that lists, as its purpose, a task not linked to proposal preparation. 
B&P 2001 ref. R.  This expense is also disallowed.
    
[18] The same is true for other expenses whose purpose can only be
ascertained by reviewing this late declaration.
[19] The $150 hourly statutory fee cap on attorneys' fees, discussed
below, has no impact on this billing statement because the law firm billed
only $5,000 for 34.9 hours, an effective hourly rate of less than $150 per
hour.
[20] $165 = $150 x 169.3/153.7 where 153.7 is the Consumer Price Index for
*All Urban Consumers, U.S. City Average, All Items,* (CPI-U) for October
1995, the base date for our calculation, and 169.3 is the arithmetic mean
of the CPI-U for January 2000 (168.8) and February 2000 (169.8), the
months in which the legal services were rendered.  A detailed discussion
of the statutory fee cap, the basis for its adjustment, and the
calculation of the adjustment can be found at pages 37-43 of this
decision.   
[21] One of the other shipments on this invoice, from a mortgage company
to the home of the Sodexho employee responsible for preparing the
proposal, is clearly not related to proposal preparation.    
[22] The Navy is correct that we did not find that the Navy's inclusion of
NAFI employees in its MEO violated the A-76 procedures, Sodexho Mgmt.,
Inc., supra, at 17, but sustained the protest because *the Navy's failure
to give commercial offerors adequate notice of its intent to use NAFI
employees for the great majority of its in-house workforce improperly and
unfairly deprived those offerors of the ability to make an informed
decision about whether, and how, to compete.*  Id. at 20-21.  While the
Navy argues that Sodexho's entitlement should be further limited solely to
the costs it incurred pursuing the part of its allegation regarding the
Navy's failure to provide this notice, in our view, the entire NAFI issue
shares a common set of core facts and legal theories and is not properly
or readily divisible.
[23] In its claim to our Office, Sodexho eliminated a number of hours
associated with these activities, but our review of the claim showed that
some had been overlooked.  Such costs are, in our view, unrelated to the
pursuit of a protest.  See Maintenance and Repair--Claim for Costs,
B-251223.4, June 24, 1994, 94-1 CPD P: 381 at 4.
[24] The parties dispute the allowability of an additional .8 hour for
this individual for a certain task, but a review of the documentation
shows that Sodexho has not actually included this time in its claim.  PC
ref. B.
[25] This documentation also includes another of Sodexho's internal
airfare reports for this employee, in the amount of $3,708.24.  Again,
Sodexho has included no explanation of the relationship, if any, these
airfares have to any protest-related purpose.  Moreover, we cannot discern
how these trips--such as those between San Francisco and Honolulu,
Honolulu and Guam, and San Francisco and Guam--are related to a protest
filed by a McLean, Virginia law office on behalf of a corporation
headquartered in Gaithersburg, Maryland concerning a procurement by a
Pensacola, Florida naval installation.
[26] We also disallowed 1.7 hours related to the consideration of an
expert whose role is not described anywhere in the documentation
supporting the claim. 
[27] Section 1403(b)(2) of FASA also mandated a limit or *cap* on the
costs that could be paid for consultant and expert witness fees.  31
U.S.C. S: 3554(c)(2)(A).  As noted above, Sodexho has adjusted its claim
to comply with the applicable regulations in this regard.
[28] The EAJA, a federal fee-shifting statute, also imposes a cap on
attorneys' fees.  In this regard:   
(A)  *fees and other expenses* includes the reasonable expenses of expert
witnesses, the reasonable cost of any study, analysis, engineering report,
test, or project which is found by the court to be necessary for the
preparation of the party's case, and reasonable attorney fees (The amount
of fees awarded under this subsection shall be based upon the prevailing
market rates for the kind and quality of the services furnished, except
that . . . (ii) attorney fees shall not be awarded in excess of $125 per
hour unless the court determines that an increase in the cost of living or
a special factor, such as the limited availability of qualified attorneys
for the proceedings involved, justifies a higher fee.); . . .
28 U.S.C. S: 2412(d)(2)(A).
[29] Alternatively, Sodexho asks us to recommend a higher amount to
reflect the customary fees for attorneys handling bid protests in the
Washington, D.C. area, citing as its legal support a decision where we
held that a senior partner's rate of $300 per hour was reasonable for this
practice area and recoverable as protest costs.  Bay Tankers, Inc.,
B-238162.4, May 31, 1991, 91-1 CPD P: 524.  Sodexho was actually billed at
rates ranging from somewhat higher than the $150 per hour fee cap for one
associate to well in excess of that hourly amount for the senior partner. 
As Sodexho's counsel is certainly aware, this decision and its underlying
analysis of *customary fees* pre-date FASA and its mandatory fee cap. 
Sodexho has articulated no *special factors* that would entitle it to an
adjustment to the statutory fee cap set forth by FASA.  
[30] The Navy also argues that the statutory fee cap is *more than
reasonable* because it is *significantly in excess of the rates paid even
the highest graded government attorneys working on similar matters.*  Id. 
However true this may be, even considering the addition of burden to the
salaries of government attorneys, such a consideration is an inappropriate
apples-to-oranges comparison.  
[31] Though not relevant in this case, the conferees went on to note that:
    
this provision would entitle a small business concern to recover
'reasonable attorneys' fees' in appropriate cases.  The conferees expect
the Comptroller General to be vigilant in reviewing attorneys' fees to
ensure that they are reasonable.  The cap placed on attorneys' fees for
businesses other than small business constitutes a benchmark as to what
constitutes a reasonable level for attorneys' fees for small businesses.
    
Id.  Section 33.104(h) of the FAR echoes this expectation.
[32] Section 10001(c) enumerated specific provisions of the Act that
applied immediately upon the date of enactment; section 1403(b)(2) was not
one of the provisions listed.
[33] Consistent with courts, we will use the CPI for *All Urban Consumers,
U.S. City Average, All Items* as the appropriate CPI index.  Ideally, we
would use an index tied specifically to the Washington, D.C. area, the
area in which legal services were performed.  However, the Department of
Labor ceased compiling CPI data for the Washington metropolitan area
shortly after it introduced a new index tied to the Washington-Baltimore
area in November 1996.  There is no 2001-2002 data for the defunct
Washington metropolitan area index.  See California Marine Cleaning
Servs., Inc. v. United States, supra, at 734 n.8.
[34] $174 = $150 x 178.4/153.7 where 153.7 is the CPI-U for October 1995
and 178.4 is the arithmetic mean of the CPI-U for November 2001 (177.4),
December 2001 (176.7), January 2002 (177.1), February 2002 (177.8), March
2002 (178.8), April 2002 (179.8), May 2002 (179.8), and June 2002 (179.9).