TITLE: B-297790.6, T Square Logistics Services Corporation, Inc.--Costs, June 7, 2007
BNUMBER: B-297790.6
DATE: June 7, 2007
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B-297790.6, T Square Logistics Services Corporation, Inc.--Costs, June 7, 2007

   Decision

   Matter of: T Square Logistics Services Corporation, Inc.--Costs

   File: B-297790.6

   Date: June 7, 2007

   Richard B. Oliver, Esq., McKenna Long & Aldridge LLP, for the protester.

   Michael J. O'Farrell, Jr., Esq., Department of the Air Force, for the
   agency.

   Katherine I. Riback, Esq., and James A. Spangenberg, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. Protester's opposition to, and GAO's denial of, agency's request for
   "outcome prediction" alternate dispute resolution (ADR) cannot serve as
   basis to disallow otherwise reasonable protest costs.

   2. Protest costs that GAO recommended be reimbursed need not be allocated
   between issue for which GAO attorney indicated during "outcome prediction"
   ADR that the likely outcome would be a sustained protest and the other
   issues raised by the protester, where the issues are interconnected and
   based on common factual underpinnings.

   3. Agency's generalized objections to attorneys' hours in claim for
   protest costs do not provide basis to justify denying adequately
   documented claim showing claimed hours were reasonable and in pursuit of
   the protest.

   4. Protester's costs incurred questioning agency's proposed corrective
   action prior to GAO's disposition of protest based on agency's proposed
   corrective action are allowable protest costs.

   5. In situations where GAO recommends that protest costs be reimbursed,
   protester's costs of preparing request to GAO for a recommendation that
   its protest costs be reimbursed because of unduly delayed agency
   corrective action on a clearly meritorious protest are allowable protest
   costs.

   6. Attorney fee $150 cap contained in Competition in Contracting Act, 31
   U.S.C. sect. 3554(c)(2)(B) (2000), is not applicable to attorneys' fees
   paid by small business protester.

   7. Protester should be reimbursed its costs of pursuing claim for costs at
   GAO where the agency took no steps for 6 months to consider the claim when
   it was pending there and for the first time in its report on the claim
   provided non-meritorious arguments denying the bulk of the protester's
   claim.

   DECISION

   T Square Logistics Services Corporation, Inc. (a small business concern)
   requests that we recommend reimbursement of $51,611.83 in costs of
   pursuing its protest challenging the award of a contract to Data Monitor
   Systems, Inc., by the Department of the Air Force under request for
   proposals (RFP) No. FA6643-05-R-0006, for base operating support (BOS)
   services at Grissom Air Reserve Base, Indiana. T Square also requests that
   it be reimbursed its costs of pursuing this claim at our Office.

   We recommend reimbursement in the amount of $51,611.83, plus T Square's
   costs of pursuing this claim at our Office.

   The RFP, issued as a small business set-aside on June 6, 2005,
   contemplated the award of a combined fixed-price and time-and-materials
   contract for 1 base year with nine 1-year options. The solicited BOS
   services included (1) base supply function, (2) motor vehicle management
   function, (3) traffic management function, (4) transient aircraft
   services, (5) recurring real property maintenance function, (6) fuels
   function, (7) airfield management function, and (8) meteorological
   function.

   The RFP provided for offerors to meet certain minimum qualification
   requirements, and to submit technical proposals addressing the program
   management/staffing and financial plan subfactors, which would be
   evaluated on a "technical acceptability" basis. The RFP provided that past
   performance was to be evaluated for "recency," that is, currently ongoing
   or completed within the last 3 years; "relevancy," based on the scope,
   magnitude, and complexity of the contracts, including the extent of
   performance by teaming partners and subcontractors; and quality of
   performance on referenced contracts. This evaluation would result in an
   overall confidence performance risk assessment of the offeror's ability to
   successfully perform the proposed effort. The possible confidence ratings,
   listed in descending order of quality, were "high confidence,"
   "significant confidence," "confidence," "unknown confidence," "little
   confidence," and "no confidence." RFP sect. M-3.4.

   Ten firms, including T Square and Data Monitor, submitted offers by the
   closing date for receipt of proposals. The agency conducted written
   discussions with the nine offerors who submitted acceptable proposals.
   After discussions were concluded, final proposal revisions were requested
   and evaluated. Data Monitor was the lowest priced offeror of the three
   offerors that received the best performance risk assessment awarded of
   "significant confidence." Although T Square submitted a lower price than
   Data Monitor, it received an overall performance risk assessment of
   "little confidence."

   The source selection authority concluded that despite "the Very Relevant
   contracts with Exceptional performance data which covered [most] of the
   eight functions," T Square warranted an overall performance risk
   assessment of "Little Confidence," because of "substantial doubt in [T
   Square's] ability to perform due to lack of performance data in [certain
   functions]." Agency Report, Tab 10, Source Selection Decision, at 2. T
   Square's evaluated lack of experience in these functional areas was not
   mentioned to it during discussions. The agency determined that Data
   Monitor's proposal represented the best value to the government, and Data
   Monitor was awarded the contract.

   In its initial protest and two supplemental protests, T Square basically
   argued that the agency either misevaluated its proposal by unreasonably
   penalizing it for certain alleged gaps in experience in certain BOS
   functions, which possibly represented unequal treatment of its proposal as
   compared to Data Monitor's, or improperly failed to communicate in
   discussions its significant concern that T Square lacked experience in
   these BOS functions, in which case T Square would have added
   subcontractors with the requisite experience in a revised proposal.

   The due date established for the Air Force report in response to the three
   protests was January 26, 2006. On January 23, the agency submitted an
   "advance document production" consisting of relevant documents pertaining
   to T Square's protest. No contracting officer's statement and legal
   memorandum responding to the protester's arguments or justifying the
   agency actions were provided at that time.

   On the following day, the agency attorney contacted the GAO attorney
   assigned to these protests, and requested "outcome prediction" alternate
   dispute resolution (ADR).[1] The agency attorney has characterized his
   request as a cost-saving measure for all parties involved, because if our
   Office's attorney had conducted outcome prediction ADR in advance of the
   complete agency report, and predicted that the protest was a "probable
   sustain," then the Air Force could have taken corrective action in advance
   of the agency report due date, and the protester could have saved the
   attorneys' fees incurred in reviewing the full agency report and preparing
   written comments on the agency report, thus saving the agency from
   exposure from a recommendation from our Office that it pay T Square's
   protest costs, including attorneys' fees. See Air Force Report on Claim
   at 2.

   On January 25, the protester objected to our Office conducting ADR before
   it had an opportunity to review an agency report, including a contracting
   officer's statement and legal memorandum, and before our Office had
   considered the protester's comments on the report, because in its view the
   record was incomplete. On January 26, the agency counsel renewed his
   request that our Office conduct outcome prediction ADR, and the protester
   renewed its objection. The GAO attorney declined to conduct outcome
   prediction ADR before she had an opportunity to review the agency's legal
   memorandum and the contracting officer's statement, as well as the
   protester's comments, explaining to the parties that, in the absence of a
   more developed record, this was not an appropriate case for outcome
   prediction ADR.

   On January 27, the agency produced a contracting officer's statement and
   legal memorandum defending the agency's actions. On February 2, the Air
   Force produced certain additional documents timely requested by the
   protester, which the Air Force argued were irrelevant, but which were
   deemed relevant by the GAO attorney.[2] The protester filed comments on
   the agency report on February 6.

   After reviewing the fully developed record, the GAO attorney contacted the
   parties and stated that she was prepared to conduct outcome prediction ADR
   if the parties were interested. She did this in view of the previously
   expressed interest by the Air Force in ADR, and because, consistent with
   our criteria for conducting ADR, she and her supervisor had a high degree
   of confidence regarding the outcome of the protest. The parties agreed and
   the ADR was conducted on February 13.

   During the ADR conference, the parties were informed by the GAO attorney
   that from her review of the record, it was clear that meaningful
   discussions were not conducted by the agency, where the protester was not
   informed of the agency's concern that the firm lacked certain experience
   that resulted in a "little confidence" rating, which was apparently the
   sole basis for not selecting T Square's proposal for award. The parties
   were informed of the GAO attorney's view that the likely outcome of the
   protest was that it would be sustained, and that the likely protest
   recommendation would be that the agency reopen negotiations, conduct
   further discussions with T Square and the other offerors, request revised
   proposals, and make a new source selection decision, fully documenting the
   basis for that decision.

   The Air Force did not immediately respond to the ADR, but on March 3
   (almost 3 weeks after the ADR and less than 2 weeks before the 100-day
   deadline for our Office to issue a decision on the protest), the Air Force
   informed our Office and the parties that the agency had decided to take
   corrective action in response to the outcome prediction ADR, consisting of
   the following: (1) assign a new evaluator, (2) re-evaluate all offerors
   that received a "Go" in the "Go/NoGo" technical proposal evaluation for
   past performance relevance and performance risk, (3) assign a "neutral"
   performance risk rating for those functional areas in which an offeror
   lacks past performance experience, (4) re-assess the confidence
   assessment, (5) prepare a new past performance/cost trade-off analysis and
   best value determination, (6) prepare a new source selection document, and
   (7) if any offeror other than the current awardee was determined to be the
   best value, then terminate the award to Data Monitor, and make award to
   that offeror. On March 7, the protester objected to the agency's proposed
   corrective action. On March 8, the GAO attorney asked the agency counsel
   to confirm whether the agency intended to stay performance during the
   conduct of corrective action and whether it might re-open discussions
   during the proposed corrective action. On March 9, the agency responded
   that it would stay performance during corrective action and that, as it
   proceeded with the proposed corrective action, it had the discretion to
   re-open discussions if it later concluded that such action was warranted.
   Given that T Square could receive the award as a result of the proposed
   corrective action, our Office dismissed T Square's protest as premature
   and academic on March 14. T Square Logistics Servs. Corp., B-297790
   et al., March 14, 2006.[3]

   On March 23, T Square timely requested that we recommend, pursuant to
   section 21.8(e) of our Bid Protest Regulations, that it be reimbursed its
   costs of filing and pursuing its protests. 4 C.F.R. sect. 21.8(e) (2007).
   On March 29, the Air Force was requested to respond to the request. The
   GAO attorney then performed further ADR by advising the parties of the
   general rule that where an agency took corrective action on a protest,
   based upon outcome prediction ADR indicating that the protest would likely
   be sustained, after the agency had submitted its report, our Office would
   ordinarily recommend that the costs of pursuing the protest be reimbursed.
   See, e.g., National Opinion Research Ctr.--Costs, B-289044.3, Mar. 6,
   2002, 2002 CPD para. 55 at 3; Millar Elevator Serv. Co.--Costs,
   B-284870.3, Aug. 3, 2000, 2000 CPD para. 126 at 3. Rather than negotiating
   or replying to the request for entitlement or claim for costs with T
   Square, the Air Force informed our Office that it "decided not to reply
   to" T Square's request. Facsimile Transmittal from Air Force to GAO
   (Apr. 10, 2006).[4]

   In T Square Logistics Servs. Corp., B-297790.4, supra, we recommended that
   T Square be reimbursed the reasonable costs of filing and pursuing its
   protests, including those incurred in its request for a recommendation for
   reimbursement of protest costs. In so doing, our Office adopted the
   analysis previously provided to the parties by the GAO attorney that
   indicated that the protest was clearly meritorious, in that meaningful
   discussions were not conducted with T Square on the subject of past
   performance. That decision also found that the Air Force had unduly
   delayed taking corrective action after it had submitted an agency report
   on the protest. The Air Force did not request reconsideration of our
   decision.

   After the agency again selected Data Monitor for award without conducting
   discussions, T Square again protested on May 31 the Air Force's evaluation
   of its and Data Monitor's past performance as well as the Air Force's
   failure to conduct discussions. In response to this protest, the Air Force
   again took corrective action that this time included termination of the
   contract awarded to Data Monitor and reopening of discussions.[5] We
   therefore dismissed this protest on June 14.

   Meanwhile, on June 9, T Square timely filed its certified claim for costs
   with the agency in the amount of $51,611.83, consisting of $51,166.50 in
   attorneys' fees and $445.33 in reimbursable expenses incurred by the
   attorneys. T Square submitted detailed documentation in support of its
   claim, including billing statements describing the work performed and time
   spent by each attorney, and invoices, as well as evidence supporting the
   reasonableness of the billing rates charged. During the subsequent 6
   months, the agency failed to consider T Square's claim, despite repeated
   follow-up calls by T Square's counsel.[6]

   This claim was filed at our Office on December 6. In its report filed in
   response to the claim, the Air Force disputes the bulk of T Square's
   claimed costs and indicates that only $1,328.17 should be reimbursed. Air
   Force Report on Claim at 12.

   The agency first objects to reimbursing T Square for any costs incurred
   past the point at which T Square's counsel objected to the Air Force's
   initial request for outcome prediction ADR, except for the costs of T
   Square's counsel's actual participation in the February 13 outcome
   prediction ADR teleconference, and the time that T Square's counsel took
   to review the decision of our Office dismissing the protest in response to
   this ADR. The agency argues that T Square's opposition to its initial ADR
   request, and our denial of the ADR request prior to receipt of the agency
   report, were unreasonable, and needlessly exposed the agency to
   reimbursing T Square's protest costs. Air Force Report on Claim at 2.[7]

   While we are sensitive to an agency's desire to save resources and money,
   we take very seriously our responsibility under the Competition in
   Contracting Act (CICA), to decide bid protests "concerning an alleged
   violation of a procurement statute or regulation," 31 U.S.C. sections
   3552, 3553(a) (2000), and our Office's attorneys will therefore not
   conduct outcome prediction ADR unless we determine that the record has
   been adequately developed and that there is a very likely outcome.[8] The
   decision to use outcome prediction ADR in a particular case is a question
   that is left to the discretion of the GAO attorney assigned to the case,
   in consultation with her/his Assistant General Counsel. Generally, for
   outcome prediction ADR to be meaningful, it is necessary to develop the
   record, which means allowing the agency to make a filing and then allowing
   the protester, and the intervenor, to respond. See Daniel I. Gordon,
   "GAO's Use of `Negotiation' and `Outcome Prediction' as ADR Techniques,"
   Fed. Contr. Rep. (BNA), Jan. 19, 1999 ("Because the GAO attorney needs to
   be able to form an opinion about the likely outcome in order to engage in
   outcome prediction, this type of ADR is unlikely to be invoked before the
   agency has had a chance to respond to the protest in its report. . . . In
   general, . . . outcome prediction ADR will occur after the agency report
   and the protester's comments on that report have been received.").

   Here, without notice to GAO or the parties, the agency delivered a large
   quantity of documents to our Office only 3 days before the agency report
   was due and only then requested outcome prediction ADR based upon the
   documents, without providing an agency response to the protest grounds in
   the form of a contracting officer's statement and legal memorandum. Our
   Office's attorney decided that she would not be in a position to conduct
   outcome prediction ADR, if at all, until she had reviewed the complete
   agency report, namely the agency's legal memorandum and the contracting
   officer's statement responding to the protest grounds, and the protester's
   comments. Also, the protester objected to our Office conducting ADR before
   receipt of the complete agency report and its comments; while a party's
   objection to ADR is not determinative, it is a factor in our determination
   concerning whether or not ADR is appropriate. See Bid Protests at GAO: A
   Descriptive Guide, 8^th ed., at 35. Here, the GAO attorney agreed with the
   protester's counsel that the record was not adequate to permit ADR based
   on the documents submitted by the Air Force. Under these circumstances,
   our Office's attorney appropriately decided not to conduct outcome
   prediction ADR. In any event, neither the fact that the protester
   initially opposed the Air Force's ADR request, nor the fact that our
   Office initially declined to conduct ADR, can serve as a basis to disallow
   otherwise reasonable protest costs.

   The agency also now argues that T Square should recover only those
   reasonable costs relating to the protest issue that the GAO attorney
   identified as a "probable sustain" during the outcome prediction ADR, that
   is, the Air Force's failure to conduct meaningful discussions. The Air
   Force argues that because T Square did not attempt to separate the costs
   relating to this issue from the other issues it raised, all of its claimed
   costs should be disallowed.[9]

   As a general rule, we consider a successful protester entitled to be
   reimbursed costs incurred with respect to all issues pursued, not merely
   those upon which it prevails. AAR Aircraft Servs.--Costs, B-291670.6, May
   12, 2003, 2003 CPD para. 100 at 9. In our view, 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. AAR Aircraft
   Servs.--Costs, supra; TRESP Assocs., Inc.--Costs, B-258322.8, Nov. 3,
   1998, 98-2 CPD para. 108 at 2. Nevertheless, failing to limit the recovery
   of protest costs in all instances of partial or limited success by a
   protester may also result in an unjust award determination. Accordingly,
   in appropriate cases, we have limited our recommendation for the award of
   protest costs 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., BAE Tech. Servs., Inc.--Costs, B-296699.3, Aug. 11,
   2006, 2006 CPD para. 122 at 3; Interface Floorings Sys., Inc.--Claim for
   Attorneys' Fees, B-225439.5, July 29, 1987, 87-2 CPD para. 106 at 2-3. In
   determining whether protest issues are so clearly severable as to
   essentially constitute separate protests, we consider, among other things,
   the extent to which the claims are interrelated or intertwined--i.e., the
   successful and unsuccessful claims share a common core set of facts, are
   based on related legal theories, or are otherwise not readily severable.
   See Sodexho Mgmt., Inc.--Costs, B-289605.3, Aug. 6, 2003, 2003 CPD
   para.136 at 29.

   We do not find that in this case the arguments on which the protester
   failed to prevail are clearly severable from those on which it succeeded.
   Here, all of T Square's arguments pertained to the reasonableness of the
   agency's evaluation of proposals under the past performance factor and the
   Air Force's failure to conduct meaningful discussions based on its
   evaluation, such that the protester's arguments were interconnected and
   based on common factual underpinnings.[10] See TRESP Assocs., Inc.-Costs,
   supra, at 3. Under the circumstances, we find that T Square's counsel was
   not required to separate costs associated with its arguments relating to
   the agency's failure to conduct meaningful discussions from costs
   associated with the other arguments it raised in its protests.[11]

   Next, the Air Force argues that attorney time spent pursuing these
   protests was excessive and represented an unreasonable duplication of
   effort. Air Force Report on Claim at 8. Our Office generally accepts the
   number of attorney hours claimed, unless the agency identified specific
   hours as excessive and articulates a reasoned analysis as to why payment
   for those hours should be disallowed. Pulau Elecs. Corp.--Costs,
   B-280048.11, July 31, 2000, 2000 CPD para. 122 at 6. Simply concluding
   that the hours claimed are excessive or suggest duplication of effort is
   inadequate to justify denying a claim for protest costs. Id. We will
   examine the reasonableness of the attorney hours claimed to determine
   whether they exceed, in nature and amount, what a prudent person would
   incur in pursuit of his or her protest. Price Waterhouse--Claim for Costs,
   B-254492.3, July 20, 1995, 95-2 CPD para. 38 at 5. We have examined the
   reasonableness of the claimed attorney hours in light of the agency's
   generalized objections, and find them to be adequately documented as to
   the work performed and time spent by each attorney, and reasonably
   incurred in pursuit of the protests.

   The agency also makes specific objections to hours charged for various
   claimed activities. Specifically, the agency argues that the protester is
   not entitled to reimbursement for 1.2 hours where its attorney was
   "reviewing debriefing materials" and "conferring with client regarding
   protest and began to review documents regarding same," because "time spent
   by a potential protester in ascertaining whether it has a basis for
   protest is not time spent in pursuit of the protest." Air Force Report on
   Claim at 4-5, quoting from Blue Rock Structures, Inc.--Costs, B-293134.2,
   Oct. 26, 2005, 2005 CPD para. 190 at 6. However here, as explained by the
   protester, it had already decided to file a protest, and the time that its
   attorney spent reviewing the notes from the debriefing attended by his
   client and conferring with his client was to formulate and focus the
   factual basis that would be contained in the protest that was to be filed.
   Declaration of Protester's Counsel (Feb. 7, 2007) para. 5. Thus, these
   hours--spent in discussing and preparing the protest filing--are
   reasonable costs of filing and pursuing the protest, and should be
   reimbursed.

   The Air Force also challenges the attorney's charge of 1.7 hours on
   December 27, 2005 for "confer[ing] with GAO Regarding Notification of
   Agency; Drafted Redacted Version of Protest," arguing that any time spent
   conferring with GAO should not be reimbursable. Agency Report on Claim at
   5. However, as explained by the protester, the portion of this time spent
   "conferring with GAO" was to ascertain whether GAO had or would timely
   notify the agency of the protest so that a statutory stay of performance
   would apply. Attorney's Counsel Declaration (Feb. 7, 2007) para. 6. We
   agree with the protester that this was a reasonable precaution,
   particularly given the possible understaffing at GAO and the agency during
   the holiday period, and was a reasonable cost of pursuing the protest.

   The Air Force also challenges the attorney's charge of .5 hours to review
   certain documents that the Air Force did not believe were relevant, but
   which GAO determined were relevant. Air Force Report on Claim at 7. The
   Air Force argues that this charge was unreasonable because this was
   incurred in search of supplemental protest issues. We find that the costs
   incurred in a protester's review of documents that have been provided by
   the agency in the course of pursuing its protest to be reasonable costs of
   pursuing a protest. The agency's disagreement with the GAO determination
   that the documents were relevant and should be provided to the protester
   does not provide a basis to disallow the protester's costs of reviewing
   these documents.

   The Air Force also disputes attorneys' hours charged for challenging the
   agency's request to dismiss the protests on the basis of the corrective
   action proposed by the Air Force on March 3, 2006 in response to the ADR.
   The protester primarily questioned the proposed corrective action because
   it did not include reopening discussions as recommended in the ADR. The
   Air Force essentially argues here that since our Office ultimately
   dismissed the protest based on the Air Force's proposed corrective action,
   the hours charged for this challenge were not reasonable costs of pursuing
   the protest. We disagree. A protester may reasonably incur costs in
   pursuit of its protest to ensure its rights are protected in the
   disposition of the protest. The success or lack of success of such
   objections or requests by a protester does not necessarily control whether
   the costs incurred in making these requests are reimbursable. In fact, in
   response to the protester's filings here, the Air Force indicated that it
   might conduct discussions as part of its corrective action. In our view,
   these costs incurred during the pendency of the protest were reasonable
   costs of pursuing the protest.

   Finally, the Air Force challenges the 1.7 hours charged for drafting the
   request for our Office to recommend reimbursement of the protester's costs
   of pursuing the protest, arguing that it was "erroneous as a matter of
   law" for our Office to recommend that such costs be reimbursed. Air Force
   Report on Claim at 10-11.[12] We regard these costs as reasonable costs of
   pursuing a protest that has been dismissed by our Office on the basis of
   agency corrective action under section 21.8(e) of our Bid Protest
   Regulations. See, e.g., Georgia Power Co.; Savannah Electric and Power
   Co.--Costs, B-289211.5; B-289211.6, May 2, 2002, 2002 CPD para. 81 at 12;
   York Bldg Servs., Inc.; Olympus Bldg. Servs., Inc.---Costs, B-282887.10,
   B-282887.11, Aug. 29, 2000, 2000 CPD para. 141 at 6 (reimbursability of
   such protest costs recognized).[13] Section 21.8(e) requires a protester
   to file a request for a recommendation that it be reimbursed its protest
   costs within 15 days after our Office has dismissed a protest based upon
   an agency's corrective action in order for our Office to find that the
   protester should be reimbursed its protest costs where the agency unduly
   delayed corrective action in response to a clearly meritorious protest.
   See TRS Research--Costs, B-290644.2, June 10, 2003, 2003 CPD para. 112 at
   3. This section is authorized by CICA, 31 U.S.C. sect. 3554(c)(1), which
   provides that our Office may recommend that the protester be reimbursed
   the costs of filing and pursuing the protest, including reasonable
   attorneys' fees, where we find that a solicitation or the award of a
   contract does not comply with a statute or regulation. Thus, a protester's
   timely request to our Office for a recommendation that protest costs be
   reimbursed is simply a step needed to obtain the remedy allowed if we find
   the protest was clearly meritorious, and that award did not comply with a
   statute or regulation. See Georgia Power Co.; Savannah Electric and Power
   Co.--Costs, supra, at 7-9. T Square should be reimbursed its costs of
   preparing the request for a recommendation that its protest costs be
   reimbursed.

   The Air Force also contends that the protester's attorneys' hourly rates
   were unreasonable and should be capped at the statutory rate for
   attorneys' fees of $150 per hour. Air Force Report on Claim at 6. This
   argument fails to recognize that the referenced statutory cap is only
   applicable where the protester is not a small business. 31 U.S.C.
   sect. 3554(c)(2)(B). In this case, the protester is a small business,
   which here competed on a small business set-aside. We note that the
   protester offered with its claim detailed evidence supporting the
   reasonableness of its claimed attorneys' rates. The Air Force has not
   questioned this evidence, but only asserts that the claimed rates exceed
   the inapplicable statutory cap. Based on the record, there is no basis to
   question the reasonableness of the claimed rates.

   The Air Force also contests T Square's request for its costs of pursuing
   this claim at our Office. Our Bid Protest Regulations, 4 C.F.R. sect.
   21.8(f)(2), provide that we may recommend reimbursement of the costs of
   pursuing a claim before our Office. Pulau Elecs. Corp.--Costs, supra, at
   11. This provision is intended to encourage the agency's expeditious and
   reasonable consideration of a protester's claim for costs. JAFIT Enters.,
   Inc.--Claim for Costs, B-266326.2, Mar. 31, 1997, 97-1 CPD para. 125 at 4.
   The costs of pursuing a claim before our Office are recoverable if by
   their nature and amount they do not exceed that which would be incurred by
   a prudent person in a similar pursuit. Main Bldg. Maint., Inc.--Costs,
   B-260945.6, Dec. 15, 1997, 97-2 CPD para. 163 at 10.

   The Air Force explains that the delay in considering the claim was related
   to both (1) the "reverse protest" filed by Data Monitor in the COFC and
   (2) its belief that "the parties are so far apart with respect to what the
   Protester is seeking in terms of protest costs and what the Agency
   considers to be reasonable that there was no reasonable likelihood that
   any amount of discussions would have resulted in a settlement without your
   Office's involvement." Air Force Report on Claim at 11. While we have
   taken into account a COFC action as a legitimate reason for an agency's
   delay in considering a claim for protest costs, we consider other factors
   as well in deciding whether to award the cost of pursuing a claim. BAE
   Tech. Servs., Inc.--Costs, supra. In this case, there is no suggestion in
   the record that the Air Force communicated to T Square, during the
   pendency of the claim at that agency, that it regarded T Square's claim as
   excessive or that it believed that the claim could not be resolved. If it
   had done so, T Square presumably could have filed its claim with our
   Office at a much earlier date; instead, the record showed that the Air
   Force's counsel repeatedly advised T Square's counsel over a 6-month
   period that the Air Force would consider the claim and the record shows
   that this was never done. Moreover, as explained above, the Air Force's
   defenses to the claim for protest costs are entirely without merit. Given
   the Air Force's failure to reasonably consider T Square's cost claim, we
   recommend that the firm be reimbursed the reasonable costs of pursuing its
   claim before our Office.

   In sum, we recommend that the Air Force reimburse T Square its claimed
   costs of $51,611.83 for pursuing the protest plus the costs it incurred in
   pursuing this claim at our Office.

   Gary L. Kepplinger
   General Counsel

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

   [1] In outcome prediction ADR, the GAO attorney handling a protest
   convenes the parties, at their request or at GAO's initiative, and
   explains what the GAO attorney believes the likely outcome will be and the
   reasons for that belief. A GAO attorney will engage in this form of ADR
   only if she or he has a high degree of confidence regarding the outcome.
   Where the party predicted to lose the protest takes action obviating the
   need for a written decision (either the agency taking corrective action or
   the protester withdrawing the protest), our Office closes the case.
   Although the outcome prediction reflects the view of the GAO attorney, and
   generally that of a supervisor as well, it is not an opinion of our
   Office, and it does not bind our Office, should issuance of a written
   decision remain appropriate. See T Square Logistics Servs. Corp.,
   B-297790.4, Apr. 26, 2006, 2006 CPD para. 78 at 3 n.1.

   [2] These documents pertained to the communications/discussions that the
   agency held with the awardee regarding past performance. In its protest,
   the protester raised the possibility of unequal discussions regarding past
   performance, so the GAO attorney determined this documentation was
   relevant.

   [3] In dismissing the protest, we observed, "In the event that it does not
   receive the award, the protester may protest this decision, including the
   nature of the corrective action." T Square Logistics Servs. Corp.,
   B-297790 et al., supra, at 2.

   [4] We note that the Air Force did not at that time (or now) dispute that
   the protests were clearly meritorious or that the agency had unduly
   delayed taking corrective action.

   [5] As discussed earlier, this was the remedy suggested by the GAO
   attorney in the ADR conference with regard to the previous protests of the
   award.

   [6] On September 12 (3 months after it had been filed), the Air Force
   advised T Square that it would not then consider the claim because of a
   reverse protest filed by Data Monitor in the Court of Federal Claims
   (COFC). After the COFC complaint had been denied, T Square again
   repeatedly and unsuccessfully attempted to get the Air Force to consider
   its claim, until it filed at our Office on December 6.

   [7] Our Office has held that where an agency takes corrective action prior
   to receipt of the agency report, we generally will not recommend the
   payment of protest costs. Veda Inc.--Entitlement to Costs, B-265809.2,
   July 19, 1996, 96-2 CPD para. 27 at 2.

   [8] We note that the agency may, at any time during the pendency of the
   protest, take corrective action before the due date of the agency report
   based upon its own assessment of the record, where it believes such action
   is appropriate.

   [9] During the 6-month period the claim was pending at the agency, the Air
   Force never communicated this concern to the protester's attorney, and
   raised it for the first time in its report to our Office on the claim.

   [10] We note that the agency tacitly acknowledged the obvious
   interrelationship of these issues by the nature of its corrective action
   in response to the ADR. That is, the agency did not reopen discussions on
   past performance, which was the remedy suggested in the ADR, but
   reevaluated past performance without reopening discussions.

   [11] In addition, the agency did not argue, when the protester's request
   for reimbursement of its protest costs was pending at our Office, that the
   protest costs were severable, nor did the Air Force request
   reconsideration of our decision that did not recommend severance of
   protest costs.

   [12] The Air Force does not explain why it takes this position.

   [13] The fact that we had already dismissed T Square's protest based upon
   proposed corrective action does not bar recovery of these costs as protest
   costs. Costs incurred after a decision on a protest has been issued on a
   protest can be reimbursable protest costs. See, e.g., Blue Rock
   Structures, Inc.--Costs, supra, (pursuit of a protest includes time spent
   by an attorney in analyzing the ultimate decision and explaining it to the
   client); Department of the Navy--Modification of Remedy, B-284080.3, May
   24, 2000, 2000 CPD para. 99 at 4 (costs incurred defending against an
   agency's request for modification of remedy are reimbursable protest
   costs).