TITLE: B-298156.2, Alaska Structures, Inc.--Costs, July 17, 2006
BNUMBER: B-298156.2
DATE: July 17, 2006
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B-298156.2, Alaska Structures, Inc.--Costs, July 17, 2006

   Decision

   Matter of: Alaska Structures, Inc.--Costs

   File: B-298156.2

   Date: July 17, 2006

   Richard J. Conway, Esq., Robert J. Moss, Esq., and Justin A. Chiarodo,
   Esq., Dickstein Shapiro Morin & Oshinsky LLP, for the protester.

   Peter F. Pontzer, Esq., Department of the Army, for the agency.

   Louis A. Chiarella, Esq., and Christine S. Melody, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. Government Accountability Office will not recommend that protester be
   reimbursed its protest costs where the agency promptly took corrective
   action before the date set for filing its report on the protest.

   2. Request for recommendation for reimbursement of protest costs relating
   to subsequent protest of allegedly defective solicitation, undertaken
   after prior protest of original solicitation led to corrective action, is
   denied where the record does not show that the issue which the agency's
   corrective action failed to address was clearly meritorious.

   DECISION

   Alaska Structures, Inc. requests that we recommend that it be reimbursed
   the costs of filing and pursuing its protest challenging the terms of
   request for quotations (RFQ) No. 129731, issued by the Army Medical
   Research Acquisition Activity, Army Medical Material Agency, Department of
   the Army, for a portable hospital system. We dismissed the protest after
   the agency advised our Office that it would take corrective action by
   canceling, and subsequently revising and reissuing, the RFQ. Alaska
   Structures argues that it was forced to file its most recent protest, and
   incur the associated costs, because the agency failed to properly
   implement the corrective action promised in response to a prior protest
   filed by Alaska Structures raising the same alleged solicitation defects.

   We deny the request.

   On September 21, 2005, the Army issued RFQ No. 113332 for a 250-bed
   portable hospital system.[1] On September 26, Alaska Structures protested
   to our Office, arguing that the RFQ failed to provide vendors with
   sufficient time to prepare and submit quotations. On October 4, the Army
   provided notice that it was taking corrective action in response to Alaska
   Structures' protest by resoliciting the requirement and allowing more time
   for vendors to respond to the solicitation. Based on the agency's
   announced corrective action, we dismissed Alaska Structures' September 26
   protest without rendering a decision on the protest's merits. Alaska
   Structures, Inc., B-297286, Oct. 12, 2005.

   On October 26, the Army issued RFQ No. 117562 for a similar 250-bed
   portable hospital system. On December 15, Alaska Structures again
   protested to our Office, arguing that various solicitation requirements
   were defective.[2] On January 11, 2006, the Army provided notice that it
   was taking corrective action in response to Alaska Structures' protest by
   canceling the underlying RFQ and preparing a new solicitation.[3] We
   subsequently dismissed Alaska Structures' December 15 protest without
   rendering a decision on the protest's merits. Alaska Structures, Inc.,
   B-297743, Jan. 19, 2006.

   On March 1, the Army issued the instant solicitation, RFQ No. 129731, for
   a 150-bed portable hospital system. On March 31, Alaska Structures again
   protested to our Office, arguing that various terms of the RFQ were
   defective. Specifically, Alaska Structures alleged that the agency
   improperly intended to purchase non-Federal Supply Schedule (FSS) items
   using FSS procedures; the solicitation's functional characteristics were
   vague and ambiguous; the RFQ failed to provide vendors with equal
   information concerning mandatory compatibility requirements; the
   solicitation contained internally inconsistent evaluation criteria; and
   the evaluation criteria improperly contained requirements that were not
   also contained in the functional characteristics. Protest, Mar. 31, 2006,
   at 10-19.

   On April 26, the Army notified our Office of its intent to cancel the RFQ
   here, and to revise and reissue the solicitation. While not agreeing with
   all of the protester's arguments and allegations, the agency stated that
   it would address, in whole or in part, four of the five issues raised by
   Alaska Structures (i.e., all but the assertion that the RFQ's functional
   characteristics were improperly vague and ambiguous).[4] Army Letter to
   GAO, Apr. 26, 2006, at 3. We found that the cancellation of the RFQ
   rendered Alaska Structures' protest of that solicitation academic, and
   since it is not our practice to consider academic protests, we dismissed
   the protest.[5] Alaska Structures, Inc., B-298156, May 3, 2006.

   Alaska Structures now requests that our Office recommend that the agency
   reimburse the protester's costs of filing and pursuing its March 31
   protest, including attorneys' fees. Alaska Structures argues that, in
   light of the Army's failure to properly implement the corrective action as
   promised in response to the prior protest, Alaska Structures was forced to
   file the March 31 protest and thus expend unnecessary time and resources
   to obtain relief. Protester's Comments, June 2, 2006, at 2. The agency
   opposes Alaska Structures' request, arguing that its corrective action was
   promptly taken in light of when the protester first identified the
   deficiencies that became the basis for its corrective action.

   Under the Competition in Contracting Act of 1984, as amended, our Office
   may recommend that protest costs be reimbursed where we find that an
   agency's action violated a procurement statute or regulation. 31 U.S.C.
   sect. 3554(c)(1) (2000). Our Bid Protest Regulations, 4 C.F.R. sect.
   21.8(e) (2006), further provide that where an agency takes corrective
   action in response to a protest, our Office may recommend that the agency
   pay the protester its costs of filing and pursuing the protest. Our
   Regulations do not contemplate a recommendation for the reimbursement of
   protest costs in every case in which an agency takes corrective action,
   but rather only where an agency unduly delays taking corrective action in
   the face of a clearly meritorious protest.[6] Information Ventures,
   Inc.--Costs, B-294580.2 et al., Dec. 6, 2004, 2004 CPD para. 244 at 2;
   Oklahoma Indian Corp.--Claim for Costs, B-243785.2, June 10, 1991,
   91-1 CPD para. 558 at 2. As a general rule, so long as an agency takes
   corrective action in response to a protest by the due date of its protest
   report, we regard such action as prompt and decline to consider favorably
   a request to recommend reimbursement of protests costs. The Sandi-Sterling
   Consortium--Costs, B-296246.2, Sept. 20, 2005, 2005 CPD para. 173 at 2-3;
   Envirosolve--Costs, B-294420.3, Feb. 17, 2005, 2005 CPD para. 35 at 3. Our
   rule is intended to prevent inordinate delay in investigating the merits
   of a protest and taking corrective action once an error is evident, so
   that a protester will not incur unnecessary effort and expense in pursuing
   its remedies before our Office. PADCO, Inc.--Costs, supra, at 3-4.

   Here, there is no question that the agency's corrective action was prompt,
   as the decision to cancel the solicitation here occurred prior to the date
   set for the filing of the agency's report.[7] Under these circumstances,
   the recovery of protest costs is not appropriate. See QuanTech,
   Inc.--Costs, B-278380.3, June 17, 1998, 98-1 CPD para. 165 at 2-3.

   Alaska Structures argues that the reimbursement of its protest costs
   nevertheless is warranted here because the agency failed to implement in a
   timely manner the promised corrective action that prompted the dismissal
   of its prior protest. Specifically, the protester contends that, in
   response to its December 15 protest, the Army agreed to address, among
   other things, the key issue raised--that the specifications were so vague
   and ambiguous as to prevent vendors from competing intelligently and on an
   equal basis. Alaska Structures argues that, notwithstanding the Army's
   prior promise that it would correct this deficiency, the subsequent
   solicitation again contained specifications that were vague and ambiguous,
   thereby necessitating the filing of its March 31 protest. The protester
   contends that because it was forced to expend additional time and
   resources to, in effect, raise the same issue twice, it should be
   reimbursed the costs of pursuing its March 31 protest. Protest, May 4,
   2006, at 6-7.

   We have recognized that the reimbursement of protest costs may be
   appropriate where an agency does not timely implement the promised
   corrective action that prompted the dismissal of a clearly meritorious
   protest. See Career Quest, a division of Syllan Careers, Inc.--Costs,
   B-293435.5, Apr. 13, 2005, 2005 CPD para. 79 at 3 n.2; East Bay Elevator
   Co., Inc.--Costs, B-286315.2, July 26, 2001, 2001 CPD para. 128 at 2. As
   we have noted, the mere promise of corrective action, without reasonably
   prompt implementation, has the obvious effect of circumventing the goal of
   the bid protest system of effecting the economic and expeditious
   resolution of bid protests. Louisiana Clearwater, Inc.--Recon. & Costs,
   B-283081.4, B-283081.5, Apr. 14, 2000, 2000 CPD para. 209 at 6; Pemco
   Aeroplex, Inc.--Recon. & Costs, B-275587.5, B-275587.6, Oct. 14, 1997,
   97-2 CPD para. 102 at 7-8. Where an agency fails to implement the promised
   corrective action, or implements corrective action that fails to address a
   clearly meritorious issue raised in the protest that prompted the
   corrective action, such that the protester is put to the expense of
   subsequently protesting the very same procurement deficiency, the agency's
   action, even though promptly proposed, has precluded the timely,
   economical resolution of the protest. See Louisiana Clearwater,
   Inc.--Recon. & Costs, supra; Envirosolve LLC, B-294974.4, June 8, 2005,
   2005 CPD para. 106 at 7.

   In this case, we conclude that recovery of protest costs is not warranted
   because, while Alaska Structures raised the same issue of vague and
   ambiguous specifications in more than one protest, we cannot conclude that
   the issue was clearly meritorious.

   As set forth above, Alaska Structures' December 15 protest alleged that
   the Army's brand name or equal-type specification was vague, ambiguous,
   and unduly restrictive of competition. The Army then agreed to take
   corrective action by issuing a revised solicitation that would use
   performance or functionality-based specifications and avoid reference to
   any particular manufacturer's products. On March 31, Alaska Structures
   protested that, among other things, the agency's revised functional
   characteristics were vague and ambiguous.[8] While the Army agreed to
   again take corrective action in response to Alaska Structures' March 31
   protest, it was with regard to the four protest issues being raised for
   the first time, and not Alaska Structures' assertion that the
   characteristics were improperly vague and ambiguous.

   Alaska Structures' argument that the agency's corrective action in
   response to its December 15 protest was deficient because it failed to
   address the issue of vague and ambiguous specifications is premised upon
   an essential but unproven assumption--that the allegation was clearly
   meritorious. Alaska Structures has not established, and the record
   otherwise does not show, that the issue was in fact clearly meritorious;
   also, as noted above, because the corrective action was taken so early in
   development of the protests, no agency responses on the merits were
   prepared. See Career Quest, a division of Syllan Careers, Inc.--Costs,
   supra, at 3. In short, we cannot say that Alaska Structures' December 15
   protest presented what could reasonably be described as a clearly
   meritorious issue; thus, we have no basis to find that the Army's
   corrective action failed to address a clearly meritorious issue such that
   Alaska Structures was put to the expense of protesting again the very same
   procurement deficiency.

   The request for a recommendation that the agency reimburse Alaska
   Structures' protest costs is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] The Army is conducting this procurement on behalf of the Federal
   Emergency Management Agency, the user activity.

   [2] RFQ No. 117562 utilized a "brand name or equal"-type specification,
   which identified a specific manufacturer's products as well as various
   minimum essential characteristics for the portable hospital system
   requirement. Alaska Structures protested that a number of the RFQ's
   minimum essential characteristics were vague, ambiguous, and/or
   inconsistent, and with regard to one minimum essential characteristic,
   unduly restricted competition to the identified brand name product.
   Protest, Dec. 15, 2005, at 5-18.

   [3] As part of the outlined corrective action, the contracting officer
   stated that the revised solicitation would utilize new performance or
   functionality- based specifications that would avoid reference to any
   particular manufacturer's products. Army Letter to GAO, Jan. 11, 2006, at
   4.

   [4] The contracting officer also described these four issues as ones that
   Alaska Structures had not previously raised. Army Letter to GAO, Apr. 26,
   2006, at 3. With respect to the fifth issue, the Army stated that, despite
   its disagreement with the protester's arguments on this point, it reserved
   the right to further clarify the specifications in this area. Id. at 3
   n.1.

   [5] We subsequently denied the protester's request for reconsideration of
   our dismissal decision. Alaska Structures, Inc.--Recon., B-298156.3, June
   1, 2006.

   [6] A protest is clearly meritorious when a reasonable agency inquiry into
   the protester's allegations would show facts disclosing the absence of a
   defensible legal position (i.e., not a close question). PADCO,
   Inc.--Costs, B-289096.3, May 3, 2002, 2002 CPD para. 135 at 3.

   [7] Because the agency's action was prompt, we need not reach the second
   prong of our test--whether the March 31 protest was clearly meritorious.
   As noted below, however, there is insufficient support in the record for a
   determination that any of Alaska Structures' protests were clearly
   meritorious. Each protest was dismissed early in the development of the
   record and prior to preparation of an agency response on the merits of
   each.

   [8] It is important to note that the remaining issues raised by Alaska
   Structures in its March 31 protest--that the agency improperly intended to
   purchase non-FSS items using FSS procedures; the RFQ failed to provide
   vendors with equal information concerning mandatory compatibility
   requirements; the solicitation contained internally inconsistent
   evaluation criteria; and the evaluation criteria improperly contained
   requirements that were not also contained in the functional
   characteristics--were not ones that Alaska Structures raised in its
   December 15 protest.