TITLE: B-297807.2, Al Long Ford--Costs, October 18, 2007
BNUMBER: B-297807.2
DATE: October 18, 2007
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B-297807.2, Al Long Ford--Costs, October 18, 2007

   Decision

   Matter of: Al Long Ford--Costs

   File: B-297807.2

   Date: October 18, 2007

   Ronald G. Acho, Esq., Cummings McClorey Davis & Acho, PLC, for the
   protester.

   Vera Meza, Esq., U.S. Army Materiel Command, for the agency.

   Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
   of the General Counsel, GAO, participated in the preparation of the
   decision.

   DIGEST

   Protester's request for recommendation that it be reimbursed its proposal
   preparation and protest costs is denied where protester failed to submit
   an adequately documented claim in a timely manner and failed to make a
   reasonable attempt to reach an agreement with the agency prior to filing
   at Government Accountability Office.

   DECISION

   Al Long Ford (ALF) requests that we recommend that it recover $477,051.31
   from the U.S. Army Tank-automotive and Armaments Command for the costs of
   preparing the proposal that it submitted in response to request for
   proposals (RFP) No. W56HZV-05-R-D117 and for the costs of filing and
   pursuing its successful protest in Al Long Ford, B-297807, Apr. 12, 2006,
   2006 CPD para. 68.

   We deny the request.

   In Al Long Ford, we sustained ALF's protest against the rejection of its
   proposal and the award of a contract for light utility trucks to American
   Equipment Company. We found that the agency should not have found ALF's
   delivery schedule high risk and recalculated it to the protester's
   prejudice without raising the matter with the protester in discussions.
   Because the agency had proceeded with performance and the trucks were
   urgently required, we did not recommend that discussions be reopened;
   instead, we recommended that the protester be reimbursed its proposal
   preparation costs. We also recommended that the agency reimburse ALF for
   the costs of filing and pursuing its protest. Our decision advised that,
   in accordance with our Bid Protest Regulations, 4 C.F.R. sect. 21.8(f)
   (2007), ALF needed to submit its claim for such costs, detailing the time
   expended and the costs incurred, directly to the agency within 60 days
   after receipt of our decision.

   ALF submitted a claim for a total of $1,267,069.32 to the agency on May
   31. The claim identified six ALF employees and a consultant who had
   participated in preparation of the proposal and furnished the total number
   of hours worked, a rate of compensation, and a total cost for each. The
   claim also identified "other" (i.e., telephone, travel, and printing)
   expenses incurred by each of the seven named individuals. The claim did
   not identify the dates on which the hours were worked or the nature of the
   tasks performed, nor did it include documentation supporting the claimed
   rates of compensation or establishing ALF's obligation to compensate the
   consultant. In addition, the claim was uncertified.

   The contracting officer responded to ALF's claim by letter dated June 7.
   The letter advised ALF that its claim was inadequately documented and
   required supplementation. Specifically, the letter instructed ALF to
   furnish additional data establishing the number of hours worked by its
   employees on the proposal and protest and their hourly rates of
   compensation, data supporting its other claimed costs, details of its
   agreement with the consultant, and documentation detailing the time
   expended and work performed by the consultant. The letter also advised ALF
   that it needed to certify its claim.

   On July 15, ALF submitted a revised claim certified by its chairman for a
   total of $871,311.32. For five of the six ALF employees, ALF furnished
   schedules that identified, by date and by task, the number of hours spent
   on various general categories of proposal-related tasks (e.g., researching
   regulations, preparing specifications, and communicating with suppliers)
   and on preparation of the protest. For the sixth employee, ALF's chairman,
   ALF furnished a schedule, which identified, by date, the total number of
   hours worked on various proposal preparation and protest-related tasks,
   but which did not furnish a breakdown of hours among the various tasks.
   ALF furnished no detail regarding the work performed by its employees
   (beyond identifying the general category of effort), and it furnished no
   documentation supporting the claimed rates of compensation.

   With regard to the consultant, ALF furnished an invoice, dated July 12,
   2006, which billed ALF for 1,090 hours of consulting services at a rate of
   $250 per hour. The invoice was accompanied by a schedule similar to those
   furnished by the ALF employees above--that is, it identified, by date and
   general task category, the number of hours that the consultant had worked
   on various proposal preparation and protest-related tasks. The invoice was
   also accompanied by a letter from the consultant to ALF's chairman, dated
   July 11, 2006, which purported to set forth the terms of an oral agreement
   that had been made between the two parties regarding the consultant's
   compensation for services rendered in connection with the subject matter.
   The letter, which had been signed by ALF's president (to confirm his
   agreement with its contents), stated that the parties had agreed that the
   consultant would receive a commission of 30 percent of the gross profit on
   any sale to TACOM, and, in the event a sale was not made, the consultant
   would be reimbursed at his normal hourly rate of $250, plus expenses.

   After reviewing the revised ALF claim, the contracting officer concluded
   that it did not contain adequate documentation to support the claimed
   costs; as a consequence, on July 26, he asked the Defense Contract Audit
   Agency (DCAA) to perform an audit of the claim. The DCAA auditors
   questioned the amounts claimed on the grounds that they were inadequately
   documented. By letter dated November 27, 2006, TACOM notified ALF that it
   was denying its claim in its entirety. The letter noted that ALF had
   failed to demonstrate that its claimed rates of compensation for its
   employees reflected their actual rates of compensation (plus reasonable
   overhead and fringe benefits), and that it had failed to demonstrate that
   it had paid (or incurred a liability) for the consultant's time. On August
   3, 2007, ALF requested that our Office make a recommendation as to the
   amount that it should recover from the agency.[1]

   ALF's request to our Office seeks compensation of $204,557.31 for the six
   ALF employees and compensation of $272,500 for the consultant. The request
   identifies hourly rates of compensation for the ALF employees that are
   substantially lower than the rates identified by ALF in its claim to the
   agency. The claimed rates for five of the six ALF employees are supported
   by documentation not previously furnished to the agency that demonstrates
   that they reflect the employees' actual rates of compensation (plus
   overhead and fringe benefits). For its sixth employee (ALF's chairman),
   ALF seeks a rate of compensation that greatly exceeds his actual rate of
   compensation. ALF maintains in this regard that its chairman's time is
   worth substantially more than his actual rate of compensation due to his
   involvement in multiple business and community activities.

   We decline to recommend that TACOM reimburse ALF for any costs. We will
   recommend the amount that the agency should pay only where, prior to
   coming to our Office, the protester timely pursued a claim to the agency;
   that is, where the protester filed an adequately documented claim with the
   agency within 60 days after receiving our recommendation that costs be
   paid. See 4 C.F.R. sect. 21.8(f)(1). The 60-day timeframe was specifically
   designed to avoid the piecemeal presentation of claims (which necessarily
   results in unduly delaying their resolution), while at the same time
   affording protesters an ample opportunity to submit adequately
   substantiated certified claims. REEP, Inc.--Costs, B-290665.2, July 29,
   2003, 2003 CPD para. 131 at 4. To be considered adequately documented, a
   claim for reimbursement of employee compensation must include
   documentation establishing the number of hours worked and the purposes of
   the employees' efforts; in addition, it must demonstrate that the claimed
   hourly rates reflect the employees' actual rates of compensation plus
   reasonable overhead and fringe benefits. See W.S. Spotswood & Sons,
   Inc.--Claim for Costs, B-236713.3, July 19, 1990, 90-2 CPD para. 50 at 3.
   While we do not believe that the 60-day timeframe should be applied in so
   harsh a manner that a protester receives no reimbursement merely because
   its initial, timely claim required some supplementation or elaboration,
   where the timely submission is of little or no value in supporting the
   claim, we will consider the claim untimely and regard it as forfeited.
   REEP, Inc.--Costs, supra. We note in this connection that a protester's
   failure to file an adequately documented claim within the 60-day period
   may result in forfeiture of its right to recover costs even where the
   parties have continued to negotiate after the 60-day period expired. H. G.
   Prop. A, L. P.--Costs, B-277572.8, Sept. 9, 1998, 98-2 CPD para. 62 at
   2-3.

   Here, ALF's initial, timely submission to the agency was so deficient as
   to be of basically no value in supporting its claim. As previously noted,
   the submission failed to furnish any detail regarding the claimed employee
   hours or supporting the claimed rates of compensation; in addition, it
   failed to include any documentation demonstrating ALF's obligation to
   compensate the consultant. Moreover, even when given the opportunity to
   supplement its submission to the agency, ALF never sought to overcome the
   second deficiency; that is, it never furnished the agency with
   documentation supporting its claimed rates of employee compensation--and,
   indeed, ultimately submitted documentation to our Office that clearly
   demonstrated that the initially claimed rates were substantially
   overstated.

   In addition, we are not persuaded that prior to seeking a recommendation
   regarding cost recovery from our Office, the protester made a reasonable
   attempt to reach an agreement with the agency, as contemplated by our
   Regulations. As noted above, it was not until the protester sought a
   recommendation from our Office that it for the first time furnished
   documentation substantiating its claimed rates of employee compensation.
   By failing to furnish such documentation to the agency, ALF effectively
   eliminated the possibility of the two parties arriving at an agreement. We
   do not think that it is appropriate to permit a protester to seek a
   recommendation regarding cost recovery from our Office where it has not
   previously made a reasonable effort to reach an agreement with the agency.

   Finally, we note with regard to ALF's claim for compensation for its
   consultant that there is no evidence in the record that ALF in fact paid
   the consultant during the 1-year period that elapsed between its receipt
   of the consultant's invoice and its filing with our Office. The fact that
   no payment has been made thus far leads us to question whether ALF is in
   fact obligated to compensate the consultant regardless of whether it
   recovers the consultant's costs from the government. We note in this
   connection that only if there is evidence of a non-contingent obligation
   by a protester to repay a subcontractor for its proposal preparation
   expenses will we regard them as recoverable. See Boines Constr. & Equip.
   Co., Inc.--Costs, B-279575.4, Apr. 5, 2000, 2000 CPD para. 56 at 5.

   The request is denied.

   Gary L. Kepplinger

   General Counsel

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

   [1] Subsection (f)(2) of 4 C.F.R. sect. 21.8 provides that if the
   protester and the contracting agency cannot reach agreement within a
   reasonable time as to the amount of proposal preparation and/or protest
   costs that the protester should recover from the agency, our Office may,
   upon request of the protester, recommend the amount of costs that the
   agency pay.