TITLE:  AAR Aircraft Services--Costs, B-291670.6, May 12, 2003
BNUMBER:  B-291670.6
DATE:  May 12, 2003
**********************************************************************
AAR Aircraft Services--Costs, B-291670.6, May 12, 2003

   DOCUMENT FOR PUBLIC RELEASE                                                
The decision issued on the date below was subject to a GAO Protective      
Order.  This redacted version has been approved for public release.        

   Decision
    
Matter of:    AAR Aircraft Services--Costs
    
File:             B-291670.6
    
Date:              May 12, 2003
    
Frederick W. Claybrook, Esq., Crowell & Moring, for the protester.
Joni M. Gibson, Esq., Department of Justice, for the agency.
Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
General Accounting Office recommends that the protester be reimbursed for
the costs of filing and pursuing its protests, where the agency unduly
delayed taking corrective action until after submission of the agency
report and the protester's comments, and the protests were clearly
meritorious.
DECISION
    
AAR Aircraft Services requests that we recommend that it be reimbursed the
costs of filing and pursuing its protests of the award of a contract to
CSI, Inc. under request for proposals (RFP) No. MS-02-R-0012, issued by
the United States Marshals Service, Department of Justice, for the lease
and maintenance of jet aircraft for prisoner transfer and other purposes. 
    
We grant the request, and recommend that AAR be reimbursed the reasonable
costs of filing and pursuing its protests, including those incurred in
pursuing this request.
    
The United States Marshals Service currently operates a fleet of aircraft
to transport prisoners and criminal aliens throughout the United States
and to certain countries in Latin America.  The RFP sought fixed-price
proposals for the lease and maintenance of six *large jet
passenger/transport aircraft* for up to 10 years to replace the agency's
aircraft. 
    
Detailed performance and design requirements were identified for the
aircraft, for example:
    
All aircraft and engines offered by a vendor must be the same model from
the same manufacturer.  A number of the aircraft makes/models that may be
proposed to meet this specification are available in different *dash
numbers* (for example:  Boeing 737-300 and 737-400 or MD-83 and
MD‑88).  Similarly, engines installed on these aircraft can have
different *dash numbers* (for example PW JT8D-217A and --219, or CFM
56-3B1 and --3C1).
RFP S: II, Part A, P: C.  In addition, the proposed aircraft *must be able
to meet the . . . range and performance requirements* identified in three
trip scenarios stated in the RFP assuming certain specified parameters,
such as average passenger weight, fuel density, reserve fuel and maneuver
fuel allowances.  With respect to the second trip scenario, the RFP
required that the proposed aircraft be able to fly 2,000 nautical miles,
into a 55‑knot headwind, carrying 140 passengers.  RFP S: II, Part
A, P: G. 
    
The RFP provided for award on the basis of a cost/technical tradeoff
considering the following evaluation factors, all of which were stated to
be equal in value:  aircraft acceptability, contractor's maintenance plan,
past performance, price evaluation, and delivery schedule.  RFP S: VII, P:
1.  With respect to the aircraft acceptability factor, offerors were
informed that *[a] comparison should be made with the requirements of . .
. Specifications for Replacement Large Transport Aircraft to show that the
aircraft complies with and[/]or exceeds the minimum requirements.*  RFP
S: IV, P: 1(C)1(a). 
    
The Marshals Service received four timely proposals in response to the
RFP, including those of AAR and CSI.[1]  AAR offered to provide a
[deleted] aircraft.  CSI offered, as its base proposal, to provide a MD90
model aircraft.  CSI also offered several alternative proposals, including
one that would provide a Boeing 737-300 model aircraft.[2] 
    
Initial proposals were evaluated by the agency's Technical Evaluation
Team, discussions conducted, and final proposal revisions received and
evaluated.  The evaluation results were provided to the agency's source
selection authority, who selected CSI's proposal of Boeing 737-300 model
aircraft for award, stating:
    
In summary, only three of the four offerors have submitted proposals that
meet all of the requirements to be awarded the contract for the Large
Aircraft Replacement Program.  Of those three, CSI proposed two aircraft
that met and exceeded the aircraft acceptability requirements, and they
were the MD90s and Boeing 737-300s.  Of these aircraft, the Boeing 737-300
exhibits the best cost effective solution based on the total operational
cost for the aircraft.  CSI also provided an acceptable
Maintenance/Logistics Plan and they rated equally well to all offerors on
Past Performance.  CSI's agreement to comply with the solicitation terms
and conditions, sound past performance record, delivery schedule that
meets the government's needs, combined with a notable lower total
evaluated price, form the basis of my conclusion that the CSI proposal for
the Boeing 737‑300 offers the best overall value to the Government.
Agency Report, Tab O, Source Selection Decision, at 6. 
    
On November 8, 2002, AAR protested, arguing, among other things, that
CSI's proposed aircraft did not satisfy the solicitation requirements, in
particular the second trip scenario.[3]  In support of this allegation,
AAR provided the detailed statement of an aircraft performance consultant,
who declared that the Boeing model 727‑300, as configured and
proposed by CSI, could not satisfy the RFP's second trip scenario.  The
protester's consultant provided explanations and calculations supporting
his analysis.  Statement of Protester's Aviation Consultant, Nov. 20,
2002. 
    
The agency subsequently submitted its report, in which the agency
maintained that AAR's protest should be denied.  With respect to the
acceptability of the Boeing model 737-300, proposed by CSI, the agency
stated that prior to issuing the solicitation its market research
*indicated that the [Boeing] 737-300/400 and the MD83/88/90 aircraft were
the best suited for [the agency's] missions because those aircraft have
the capability to meet all national and international flight routes.*[4] 
Agency Report at 23.  In addition, the agency provided statements (all
prepared after the filing of the protest) from several consultants,
arguing that the Boeing model 737‑300 aircraft proposed by CSI could
satisfy all of the solicitation's trip scenarios. [5]  See Agency Report,
Tab Q, *A Limited Analysis of Boeing 737-300 Range and Performance,* Dec.
5, 2002; Tab R, Boeing Trip 2 Fuel Analysis, Dec. 2, 2002; Tab T, Flight
Plan, Dec. 2, 2002.
    
AAR timely filed its comments and two supplemental protests refuting the
agency's report.  With respect to whether CSI's proposed Boeing model
737-300 could satisfy the RFP requirements, AAR noted that the agency's
account of its market research did not establish that the Boeing model
737‑300 would satisfy the trip scenarios required by the RFP. 
Furthermore, AAR provided another statement from its aviation consultant,
rebutting the agency's consultants' analyses, in which he stated that the
agency's consultants used faulty assumptions and data to calculate the
fuel usage of the Boeing model 737-300; that is, for example, the
consultants understated the empty weight of the aircraft and failed to
account for the 55‑knot headwind (a required parameter for the
second scenario) during climbs and descent.  Protester's Comments,
attach. AD, Statement of Protester's Aviation Consultant.  The protester
also provided evidence that it did not propose the Boeing 737-300 because
that aircraft could not meet the second scenario requirements.  Protest at
5; attach. 1, AAR Vice President/General Manager's Affidavit, at 3.
    
We requested and received a supplemental agency report.  In response, the
protester filed supplemental comments with an additional affidavit from
its consultant explaining why the Boeing 737-300 proposed by CSI did not
meet the second scenario requirements.  In response to the protester's
request, we scheduled a hearing on these protests, informing the parties
that the agency must provide its aviation consultants, whose statements
had been refuted by the evidence provided by the protester.
    
Prior to a hearing, the agency informed us that it would take corrective
action in response to the protest.  Specifically, the Marshals Service
stated that it was canceling the solicitation, terminating the award to
CSI, and would issue a new solicitation for the lease of the aircraft. 
The agency stated that the *new solicitation shall include revisions to
the technical specifications, as well as to pricing, and to the evaluation
criteria.*  Marshals Service Letter, Jan. 22, 2003.
    
Based upon the agency's proposed corrective action, we dismissed the
protest as academic on January 27, 2003.  Thereafter, in accordance with
our Bid Protest Regulations, 4 C.F.R. S: 21.8(e) (2003), AAR requested
that we recommend reimbursement of its protest costs because the Marshals
Service had unduly delayed taking corrective action in the face of AAR's
clearly meritorious protest.
    
The Marshals Service initially contends, citing Buckhannon Bd. and Care
Home, Inc. v. West Virginia Dep't of Health and Human Resources, 532 U.S.
598 (2001), that we may not recommend the award of protest costs where an
agency takes corrective action that results in the dismissal of a
protest.  This issue was resolved in Georgia Power Co.; Savannah Elec. and
Power Co.--Costs, B-289211.5, B-289211.6, May 2, 2002, 2002 CPD P: 81, in
which we determined that the Supreme Court's holding in the Buckhannon
case was not applicable to recommendations that our Office made under our
Bid Protest Regulations for reimbursement of protest costs in response to
an agency's corrective action.
    
Our authority to recommend the reimbursement of protest costs is granted
by the Competition in Contracting Act of 1984 (CICA), which, as amended,
provides:
    
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) (2000).
    
Section 21.8(e) of our Bid Protest Regulations implements our authority to
recommend payment of costs, providing, in pertinent part, that:
    
If the contracting agency decides to take corrective action in response to
a protest, GAO may recommend that the agency pay the protester the costs
of filing and pursuing the protest, including attorneys' fees and
consultant and expert witness fees.
4 C.F.R. S: 21.8(e). 
    
Consistent with CICA and our Regulations, where a procuring agency takes
corrective action in response to a protest, our Office has recommended
that the agency reimburse the protester its protest costs where, based on
the circumstances of the case, we determined that the agency unduly
delayed taking corrective action in the face of a clearly meritorious
protest, thereby causing a protester to expend unnecessary time and
resources to make further use of the protest process in order to obtain
relief.  See Pemco Aeroplex, Inc.--Recon. and Costs, B-275587.5,
B-275587.6, Oct. 14, 1997, 97-2 CPD P: 102 at 5.  A protest is clearly
meritorious when a reasonable agency inquiry into the protest allegations
would show facts disclosing the absence of a defensible legal position. 
AVIATE L.L.C., B‑275058.6, B-275058.7, Apr. 14, 1997, 97-1 CPD P:
162 at 16.  For a protest to be clearly meritorious, the issue involved
must not be a close question.  J.F. Taylor, Inc.‑-Entitlement to
Costs, B‑266039.3, July 5, 1996, 96-2 CPD P: 5 at 3.  Rather, the
record must establish that the agency prejudicially violated a procurement
statute or regulation.  Tri-Ark Indus., Inc.--Declaration of Entitlement,
B-274450.2, Oct. 14, 1997, 97-2 CPD P: 101 at 3.  In finding that a
protest was clearly meritorious, we determine, in accordance with CICA,
that the agency's conduct of the procurement violated a statute or
regulation to the detriment of the protester.  Georgia Power Co.; Savannah
Elec. and Power Co.--Costs, supra, at 9.
    
Here, we find that the Marshals Service failed to reasonably determine
that the Boeing model 737-300, as proposed by CSI, satisfied all of the
solicitation requirements, including the trip scenarios.  Although the
agency argues that it had determined from its pre-solicitation market
research that this model aircraft would satisfy its needs, the agency
provided no evidence, despite specific requests, of its market research
showing that the Boeing 737-300 would meet all three trip scenarios
required by the RFP.  Indeed, the agency has provided no documentation
establishing what examination it made of this model aircraft or what this
examination established in its asserted market research.  The record is
simply devoid of contemporaneous documentation establishing that the
agency reasonably found that the Boeing model 737-300 aircraft offered by
CSI would satisfy the RFP requirements, in particular, the second
scenario.[6] 
    
With respect to the agency's evaluation of CSI's proposal, there is also
no contemporaneous documentation showing that the agency determined that
the Boeing model 737-300 proposed by CSI would satisfy all of the RFP
requirements, including the trip scenarios.  First of all, CSI's proposal,
unlike the protester's, did not show that its proposed aircraft would
satisfy the trip scenarios, but simply promised that its proposed Boeing
model 737-300 would be able to perform the trip scenarios, even though the
RFP required offerors to provide a *comparison . . . to show that the
aircraft complies with and or exceeds the minimum requirements* of the
specifications.*[7]  See RFP S: IV, P: 1(C)1(a); Agency Report, Tab D,
CSI's Technical Proposal, at 4-5. 
    
As noted above, in response to AAR's protest, including the protester's
consultant's statement, the agency provided consultants' post-protest
statements, purporting to show that the Boeing model 737-300 aircraft
proposed by CSI would satisfy the trip scenarios.   See Agency Report, Tab
Q, *A Limited Analysis of Boeing 737-300 Range and Performance,* Dec. 5,
2002; Tab R, Boeing Trip 2 Fuel Analysis, Dec. 2, 2002; Tab T, Flight
Plan, Dec. 2, 2002.  In each of these analyses, the Boeing model 737-300
barely satisfied the second trip scenario requirements.  For example, one
of the agency's consultants found that the Boeing model 737-300 would
satisfy the second trip scenario with a mere 21 pounds (or 3 gallons) of
fuel to spare.  See Agency Report, Tab R, Boeing Trip 2 Fuel Analysis,
Dec. 2, 2002. 
    
As also noted, AAR rebutted the agency's post-protest analyses in its
comments, providing an additional statement from its aviation consultant
who reviewed the agency's statements.  In performing his analysis of the
Boeing model 737-300 proposed by CSI, the protester's consultant used a
software program prepared by the aircraft manufacturer (Boeing
Corporation).[8]  This program allows the user to input the various trip
parameters (for example, aircraft operating empty weight, payload, fuel,
trip distance, ascends/descends, and headwind) to determine whether the
aircraft can fly the required distance.
    
The essential difference between the protester's consultant's calculations
and the agency's consultants' calculations is in the operating empty
weight of the aircraft applied in the program.  That is, with respect to
the aircraft's operating empty weight, the agency's consultants'
calculations were based upon a Boeing model 737‑300 aircraft with an
empty operating weight of 70,000 pounds, while the protester's
consultant's calculation was based upon an empty operating weight of
71,720 pounds, which is the *generic weight for [a 140-seat]
configuration, as stated by Boeing.*[9]  See Protester's Comments, attach.
AD, Supplemental Statement of Protester's Aviation Consultant.  Increasing
the weight of the aircraft decreases fuel efficiency, thus shortening the
distance the aircraft can fly on a tank of fuel.  The record establishes
that application of an empty operating weight of at least 71,475 pounds
would alone cause the Boeing model 737‑300 to fail to satisfy the
second trip scenario.[10]  Id. at 4.
    
During the protest, the agency and intervenor failed to support the use of
a 70,000-pound figure for the operating empty weight of the aircraft and,
in fact, failed to rebut the protester's consultant's statement that
71,720 pounds is the weight identified by Boeing as a generic weight for
this aircraft with the required 140-seat configuration.[11]  We note,
however, the other information in the record indicated that the operating
empty weight of the Boeing model 737-300 would be much greater than that
stated by the agency's consultants in their post-protest analyses.  For
example, in an aviation article concerning the Boeing model 737 jetliner
submitted by CSI with its supplemental comments, it is stated that the
empty weight of a Boeing model 737‑300 is 72,360 pounds.  See
Intervenor's Supplemental Comments, attach. 1, *Boeing 737 Short to
Medium-Range Jetliner,* at 2.
    
Thus, the record established that the agency did not have a reasonable
basis to determine that CSI's proposed aircraft would satisfy the
requirements of the second scenario.  Under the circumstances, we find
AAR's protest to be clearly meritorious.  A proposal that fails to conform
to the material terms and conditions of the solicitation should be
considered technically unacceptable and may not form the basis for an
award.  See 41 U.S.C. S: 253b(a); Marshall-Putnam Soil and Water
Conservation Dist., B‑289949, B-289949.2, May 29, 2002, 2002 CPD P:
90 at 5.  The Marshals Service violated this statutory requirement when it
accepted CSI's proposal of the Boeing model 737-300, despite the fact that
this proposal did not satisfy all of the material terms and conditions of
the RFP.
    
Furthermore, the record shows that AAR was prejudiced by the agency's
acceptance of CSI's nonconforming proposal.  AAR stated that prior to
submitting its initial proposal, the firm recognized that the Boeing model
737-300 aircraft offered significant performance and competitive
advantages (such as, for example, excellent fuel efficiency), but that AAR
found that this aircraft could not satisfy the solicitation requirements
and because of this it did not offer the Boeing model 737-300.  See
Protest at 5; attach. 1, AAR Vice President/General Manager's Affadavit,
at 3.
    
In sum, we find that the Marshals Service prejudicially violated 41 U.S.C.
S: 253b(a), when it accepted CSI's nonconforming offer to provide Boeing
model 737-300 aircraft.  We also find that a reasonable inquiry into the
protest allegations would have disclosed the absence of a legally
defensible position, and that by unduly delaying corrective action the
Marshals Service caused the protester to expend unnecessary time and
resources to make further use of the protest process to obtain relief.
    
The Marshals Service asks that we limit any recommendation that AAR be
reimbursed its protest costs *to those issues on which the protester would
have clearly prevailed.*  Agency's Response to Entitlement Request at 3. 
    
As a general rule, we consider a successful protester should be reimbursed
the 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; Data Based Decisions, Inc.--Claim for
Costs, B-232663.3, Dec. 11, 1989, 89-2 CPD P: 538 at 4.  While we have
limited the award of protest costs to successful protesters where a part
of their costs is allocable to a protest issue that is so clearly
severable as to essentially constitute a separate protest, see, e.g.,
Interface Flooring Sys. Inc.--Claim for Attorneys' Fees, B-225439.5, July
29, 1987, 87-2 CPD P: 106 at 2-3, limiting recovery of protest costs in
all cases to only those issues on which the protester prevailed would be
inconsistent with the broad, remedial congressional purpose behind the
cost reimbursement provisions of CICA.  TRESP Assocs., Inc.--Costs,
B‑258322.8, Nov. 3, 1998, 98-2 CPD P: 108 at 2.
    
Here, we conclude that the issues raised are intertwined parts of AAR's
basic objection that the Marshals Service misevaluated proposals. 
Furthermore, we do not find that the record established that there were
clearly severable issues upon which AAR would not have prevailed. 
Accordingly, we see no reason why AAR's recovery of protest costs should
be limited to a particular issue.
    
AAR requests that we recommend that its recovery of attorneys' fees not be
*capped* at $150 per hour.  CICA, as amended, provides that no party
(other than a small business concern) may be paid pursuant to our
recommendation attorneys' fees exceeding $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).  AAR contends that increases in the cost of
living justify a higher hourly rate for calculating a reasonably
reimbursement for attorneys' fees.  We think that this request is
premature.  In filing its claim for costs with the Marshals Service, AAR
may present this request to the agency for its review.
    
We recommend that AAR be reimbursed the reasonable costs of filing and
pursuing the protests, including those incurred here, i.e., requesting a
recommendation for costs.  See Jones/Hill Joint Venture--Costs,
B-286194.3, Mar. 27, 2001, 2001 CPD P: 62 at 13-14.  The protester should
submit its claim for costs, detailing and certifying the time expended and
costs incurred, directly to the Marshals Service within 60 days of receipt
of this decision.  4 C.F.R. S: 21.8(f)(1).
    
Anthony H. Gamboa
General Counsel
    
    

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

   [1] A late proposal was also received and not considered by the agency.
[2] The RFP permitted alternate proposals.  RFP S: IV, P: I.A.
[3] AAR also filed a number of supplemental protests challenging the
evaluation of CSI's proposal.
[4] The agency also asserted that the RFP indicated that Boeing model
737-300 aircraft was acceptable, and therefore AAR's challenge to the
acceptability of CSI's proposal of this aircraft was an untimely,
post-award solicitation challenge.  As we informed the agency during the
protest, the RFP could not reasonably have been read as informing offerors
that the Boeing model 737-300 aircraft would meet all of the solicitation
requirements.  Rather, the solicitation only references this aircraft
where offerors were informed that different *dash numbers* of the same
model aircraft may be offered.  See RFP S: II, Part A, P: C.  This did not
reasonably inform offerors that the Boeing model 737-300 was
*pre-approved.*
[5] CSI's proposal merely promised that its aircraft would meet these
scenarios with no supporting explanation.  Despite the specific request of
the protester, the intervenor, CSI, declined to provide documentation
refuting the protester's arguments concerning the ability of the Boeing
model 737-300 to satisfy the RFP requirements, including the trip
scenarios.
[6] In its objection to the protester's request for entitlement to protest
costs, the Marshals Service argues that *[a]bsent a test flight mimicking
the range and performance criteria, there is no clear way to determine
whether AAR's arguments on this issue are meritorious.*  Agency Response
to Entitlement Request at 3.  We disagree.  Not only does the RFP not
provide for actual flight-testing to establish the acceptability of
proposed aircraft, but the agency has essentially conceded by its
arguments during the protest that programs (such as that used by the
protester's consultant) are available to reasonably assess the probable
performance of aircraft given set parameters.
[7] AAR, in its proposal, provided its assumptions and analyses to show
that its proposed aircraft would satisfy the trip scenarios.  See Agency
Report, Tab C, AAR's Technical Proposal, at 18-20.
[8] The computer model used is the Boeing Electronic Performance Document
version 3.06A (Apr. 2001).  See Statement of Protester's Aviation
Consultant, Nov. 20, 2002, at 2.
[9] One of the agency's consultants stated that he performed a separate
analysis (which was not provided) for an operating empty weight of 71,000
pounds and this showed the aircraft could satisfy the trip scenario with
92 pounds of fuel remaining.  See Agency Report, Tab Q, *A Limited
Analysis of Boeing 737-300 Range and Performance,* at 5.  Another problem
with this unsupported analysis is that there is no explanation why the
consultant used an operating empty weight of 71,000 pounds, which the
record also shows to be understated.
[10] The protester's consultant identified numerous other errors in the
agency's consultants' calculations.
[11] In challenging the protester's request for entitlement to protest
costs, the Marshals Service submitted statements from two of its
consultants, who now state that the 70,000 pounds operating empty weight
figure was provided by CSI.  We do not find this unsupported assertion to
be persuasive.  As noted above, CSI, although it intervened in the
protest, declined to provide documentation supporting its arguments that
the Boeing model 737-300 could satisfy the RFP performance requirements or
specifically supporting the 70,000-pound operating empty weight figure. 
In fact, CSI never identified (during the protest or later) the operating
empty weight of its proposed aircraft (although it should presumably have
had this information).  We also note that, in responding to the
protester's request for entitlement, one of the agency's consultants
admitted that his original market research showed *a higher, generic empty
weight* than the 70,000-pound figure now asserted by the agency. 
Statement of Agency Aviation Consultant, Jan. 2, 2003, at 1.