TITLE: B-296946.7, University of Dayton Research Institute--Costs, October 23, 2006
BNUMBER: B-296946.7
DATE: October 23, 2006
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B-296946.7, University of Dayton Research Institute--Costs, October 23, 2006

   Decision

   Matter of: University of Dayton Research Institute--Costs

   File: B-296946.7

   Date: October 23, 2006

   Daniel A. Bellman, Esq., and William R. Wernet, Esq., for the protester.

   Lt. Col. Sharon K. Sughru, Department of the Air Force, for the agency.

   Eric M. Ransom and Glenn G. Wolcott, Esq., Office of the General Counsel,
   GAO, participated in the preparation of the decision.

   DIGEST

   1. Protester may be reimbursed for its protest expenses only to the extent
   that they are adequately supported by documentation reflecting the costs
   incurred.

   2. Protester is not entitled to recover costs associated with deciding
   whether to protest, or costs associated with a settlement.

   3. Protester is not entitled to reimbursement for time spent pursuing its
   claim for costs, where delay in the agency's consideration of claim was
   caused by protester's inability or unwillingness to perfect its claim.

   DECISION

   University of Dayton Research Institute (UDRI) requests that our Office
   recommend the amount the Department of the Air Force should reimburse UDRI
   for the costs of filing and pursuing a protest UDRI previously filed with
   our Office; the agency responded to UDRI's protest by taking corrective
   action.[1] See University of Dayton Research Inst., B-296946, Oct. 19,
   2005.

   Following our dismissal of UDRI's protest, UDRI submitted a request to
   this Office, seeking our recommendation that the agency reimburse UDRI for
   the costs it had incurred in filing and pursuing the protest. In response,
   the agency stated that it intended to reimburse UDRI for its reasonable
   protest costs. Accordingly, we closed our file on UDRI's request, pending
   the parties' agreement regarding the properly reimbursable amount. The
   parties have been unable to reach agreement on that issue. On June 14,
   2006, UDRI submitted a request that this Office recommend the proper
   amount of reimbursable costs.

   We recommend that the Air Force reimburse UDRI $74,912.17 for the costs of
   filing and pursuing its protest.

   UDRI initially submitted its cost claim to the agency on March 21, 2006,
   seeking recovery of $84,701.25, which represented attorneys' fees, UDRI
   employee salaries, and other expenses. The agency responded on March 27,
   stating that UDRI had not supplied sufficient documentation to support its
   costs, and requesting that UDRI further document its claim. UDRI provided
   some additional documentation on April 20 and, in a communication to UDRI
   dated June 5, the agency recognized that $51,938.68 of UDRI's costs were
   properly reimbursable.

   Nonetheless, in its June 5 communication with UDRI, the agency declined to
   accept as reimbursable the costs claimed for UDRI personnel, noting that
   UDRI had not provided documentation supporting those costs. The agency
   also challenged UDRI's calculation of attorneys' fees to the extent they
   exceeded the $150 per hour rate limitation for successful large business
   protesters imposed by the Competition in Contracting Act of 1984
   (CICA).[2] Finally, the agency challenged UDRI's recovery of costs that
   were incurred after this Office's October 19, 2005 dismissal of UDRI's
   protest.

   On June 9, 2006, UDRI responded to the agency's June 5 communication,
   declining to provide any salary data to support its claimed personnel
   costs, stating: "[UDRI] does not release salary data directly to any
   sponsor, government or commercial." Letter from UDRI Counsel to
   Contracting Officer, June 9, 2006, at 2. Further, UDRI suggested that it
   was the responsibility of the agency to engage an "authorized audit
   agency" to verify the validity of UDRI's claim for costs in this regard.
   Id. at 3. Finally, UDRI argued that some of the costs incurred after the
   October 19 dismissal of its protest should be reimbursed, and that
   application of the $150 per hour CICA rate cap was not appropriate.

   On June 14, the agency reiterated its prior position with regard to the
   portions of UDRI's claim it considered non-reimbursable. Later that day,
   UDRI filed its request with this Office, seeking our recommendation
   regarding the properly reimbursable amount.

   Thereafter, in the interest of facilitating an agreement, this Office
   conducted a conference call with counsel for the parties. Following the
   conference call, UDRI submitted another revised claim with more extensive
   supporting information, including salary data for UDRI personnel, seeking
   total reimbursement of $77,432.87.[3] UDRI Revised Claim for Protest
   Costs, July 31, 2006. In response to UDRI's revised submission, including
   additional supporting documentation, the agency agreed that $70,429.93 of
   UDRI's claimed costs are reimbursable.[4] Revised Agency Response, Aug. 1,
   2006, at 2. Accordingly, the only remaining issues are relatively minor
   matters concerning attorneys' hours attributable to activities that that
   the agency maintains are not reimbursable; in total, these issues concern
   a total of $7,002.94.

   The agency argues that, to the extent UDRI's claim reflects costs for
   pre-protest activities, settlement activities, and cost claim preparation
   activities, UDRI should not be reimbursed. Revised Agency Response, Aug.
   1, 2006, at 1. As discussed below, we agree that portions of UDRI's claim
   reflect costs that are not properly reimbursed.

   Based on our review of the record, we conclude that 3.5 hours for Mr.
   Bellman, reflecting a cost of $667.45, were billed on July 18-20, 2005
   before UDRI made the decision to protest. The work performed during these
   hours is described as researching and drafting activities related to a
   "possible" protest. UDRI Claim for Protest Costs, Mar. 21, 2005, Tab 1,
   attach. 3, at 1-2. In this regard, time spent by a potential protester in
   ascertaining whether it has a basis for protest is not generally
   considered to be time spent in pursuit of the protest. Blue Rock
   Structures, Inc.--Costs, B-293134.2, Oct. 26, 2005, 2005 CPD para. 190 at
   6. Therefore, we do not recommend that the agency reimburse UDRI for these
   attorneys' fees.

   We also agree with the agency that the costs claimed for 4.5 of Mr.
   Bellman's hours, billed on August 11, 12, and 16, 2005, reflecting a cost
   of $862.52, were incurred in connection with drafting a letter to the
   agency, shortly after the protest had been filed, outlining the advantages
   of protest settlement. Claim for Protest Costs, Tab 1, at 12. We have held
   that time spent discussing settlements is not generally considered to be
   time spent in pursuit of the protest. Blue Rock Structures, Inc.,--Costs,
   supra, at 5. Accordingly, we do not recommend that the agency reimburse
   UDRI for these attorneys' fees.

   Finally, UDRI's claim separately seeks reimbursement of $990.10,
   reflecting time spent on preparation of UDRI's costs claim.[5] UDRI
   Revised Claim, July 31, 2006, at 4-5. We agree with the agency that UDRI's
   time spent in pursuit of its cost claim is not properly reimbursable.
   Pursuant to our Bid Protest Regulations, we may recommend that a
   contracting agency pay a protester the costs of pursuing its claim for
   costs with our Office. 4 C.F.R. sect. 21.8(f)(2) (2006). However, we will
   recommend payment of such costs only if it is shown that the agency failed
   to consider, or unreasonably delayed consideration of, the protester's
   claim. Blue Rock Structures, Inc.--Costs, supra, at 7. Here, we view the
   delays to have been attributable, in large part, to UDRI's inability or
   unwillingness to perfect its own claim by providing reasonable supporting
   documentation, and we do not find that reimbursement for the costs UDRI
   incurred in pursuing its claim to be appropriate.

   Accordingly, we recommend that the agency reimburse UDRI a total of
   $74,912.17, representing $43,433.01 for Mr. Bellman's attorney's fees,[6]
   $16,880 for Mr. Wernet's attorney's fees, $12,770.07 for UDRI's personnel
   costs, and $1,829.09 for miscellaneous legal costs.

   Gary L. Kepplinger

   General Counsel

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

   [1] The protest at issue here was filed with our Office in July 2005. In
   October 2005, following various conference calls conducted by this Office,
   the agency stated that it was taking corrective action. Accordingly, on
   October 19, 2005, we dismissed the protest on the basis of that pending
   action.

   [2] Under CICA, as amended, where the Comptroller General recommends
   reimbursement of a successful protester's costs of filing and pursuing a
   protest, including reasonable attorneys fees, such fees may not 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. sect. 3554(c)(2)(B)(2000). In submitting its request to
   our Office, UDRI argued, among other things, that "because of the limited
   number of qualified attorneys in Ohio that can handle GAO protests, there
   should be no reduction at all." UDRI Request for GAO Recommendation, June
   14, 2006, at 2.

   [3] UDRI's July 31 submission reflected a reduction in attorney fee rates,
   consistent with the CICA cap as adjusted by the Department of Labor's
   consumer price index, as well as elimination of fees for certain
   non-protest related activities. More specifically, UDRI's revised claim
   reflected attorneys fees of $61,842.98 ($44,962.98 for Mr. Bellman and
   $16,880 for Mr. Wernet), $12,770.70 for UDRI personnel costs, $1,829.09
   for miscellaneous legal expenses, and $990.10 for costs incurred in
   pursuing UDRI's cost claim.

   [4] Specifically, agency has agreed to reimbursement of $38,950.14 in
   attorney fees for Mr. Bellman, $16,880 in attorney fees for Mr. Wernet,
   $12,770.70 for UDRI's personnel costs, and $1,829.09 for miscellaneous
   legal expenses.

   [5] Following submission of its July 31, 2006 revised claim, UDRI
   submitted an additional request for reimbursement of $4,455.35 in costs
   associated with pursuit of its cost claim. As discussed above, we do not
   recommend reimbursement of any costs UDRI incurred in pursuing its cost
   claim.

   [6] $44,962.98, less $667.45 and $862.52, as discussed above.