Innovative Refrigeration Concepts--Claim for Costs, B-

B-258655.2 Jul 16, 1997 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights A firm claimed reimbursement for its bid preparation and protest costs pursuant to its protest of an Air Force contract award. GAO held that the protester could not recover: (1) its bid preparation and protests costs, since it failed to adequately document its employees' actual rates of compensation and reasonable overhead and fringe benefits; and (2) attorneys' fees incurred after the Air Force offered to settle the protester's claim, since the rejected settlement provided all the relief available to the protester. Accordingly, the claimant was entitled to reimbursement of attorneys' fees and costs it incurred prior to the settlement offer. View Decision Matter of: Innovative Refrigeration Concepts--Claim for Costs File: B-258655.2 Date: July 16, 1997 DIGEST Attorneys DECISION Innovative Refrigeration Concepts (IRC) requests that our Office determine the amount it is entitled to recover from the Department of the Air Force for its costs of preparing its bid under invitation for bids (IFB) No. F28609-94-B-0030 and for filing and pursuing its protest in Innovative Refrigeration Concepts, B-258655, Feb. 10, 1995, 95-1 CPD Para. 61. The IFB, issued as a total small business set-aside, sought bids for a chiller on a brand name or equal basis. Although the IFB identified the make and model of a large business for the brand name, the IFB required that the small business bidders offer only products manufactured by a small business. We sustained IRC's protest that the awardee's bid was nonresponsive because the awardee proposed to furnish the product of a large business in violation of the small business set-aside provisions of the IFB. As the chiller had been delivered and installed soon after award, [1] corrective action was not feasible, and we instead awarded IRC its costs of bid preparation and of filing and pursuing the protest, including reasonable attorneys' fees. IRC, as directed by our decision, submitted its claim for costs to the agency, supported by an itemized accounting of the claimed costs of IRC's employees as well as those for its attorney. The parties were unable to reach an agreement concerning the amount IRC is entitled to be reimbursed for its costs, and IRC has requested that we determine the amount of its entitlement pursuant to the then-applicable provisions of our Bid Protest Regulations, 4 C.F.R. Sec. 21.6(f)(2) (1995). For the costs incurred by its employees, IRC listed the services performed, dates of performance, hours performed, and hourly rate for each employment position. IRC claimed that its employees incurred costs of $5,367 for 47 hours of bid preparation and incurred costs of $3,707.50 for 32 hours of pursuing its protest. The Air Force objects to the reimbursement of any of IRC's costs claimed for its employees, because, despite the Air Force's request, IRC did not provide any information to establish that its employees' claimed hourly rates reflect actual rates of compensation. A protester seeking to recover the cost of pursuing its protest must submit sufficient evidence to support its monetary claim. McNeil Techs., Inc.--Claim for Costs, B-254909.3, Apr. 20, 1995, 95-1 CPD Para. 207 at 5. The amount claimed may be recovered to the extent that it is adequately documented and shown to be reasonable. Id. Although we recognize that the requirement for documentation may sometimes entail certain difficulties, we do not consider it unreasonable to require a protester to document in some manner the amount and purposes of its employees' claimed efforts and to establish that the claimed hourly rates reflect the employees' actual rates of compensation plus reasonable overhead and fringe benefits. W.S. Spotswood & Sons, Inc.--Claim for Costs, 69 Comp. Gen. 622, 623 (1990), 90-2 CPD Para. 50 at 3. Here, despite the agency's request, the documentation submitted by IRC does not demonstrate how IRC's hourly rates were calculated or that the claimed rates reflect actual rates of compensation. Rather, the record reflects that for one of the employees, namely IRC's president and chief engineer, the claimed rate represents a "market rate" as a professional consulting engineer, which presumably includes profit as an element. Moreover, given the high hourly rates claimed for the remaining employment positions ($65 to $85 per hour), it appears likely that the other claimed rates also represent "market rates" that may well include profit as an element. A protester may not recover profit on its own employee's time in filing and pursuing its protest or preparing its bid, and therefore claimed rates must be based upon actual rates of compensation, plus reasonable overhead and fringe benefits, and not market rates. See John Peeples--Claim for Costs, 70 Comp.Gen. 661, 663 (1991), 91-2 CPD Para. 125 at 3.