Sodexho Management, Inc.--Costs, B-289605.3, August 6, 2003

B-289605.3 Aug 06, 2003 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights A-76 is denied because such costs are not. Administrative appeals costs are tantamount to agency-level protest costs. Protester should not be paid costs incurred in filing and pursuing unsuccessful protest issues where those issues are readily severable from a successful protest issue. Protester claiming reimbursement of the costs of preparing its proposal and the costs of filing and pursuing its protest must submit evidence sufficient to support its claim that those costs were incurred and are reasonable and properly attributable to either proposal preparation or the filing and pursuit of the protest. GAO recommends that costs which are not adequately documented not be reimbursed. That claimed allowable costs which are aggregated with unallowable costs in a way that does not permit segregation of allowable costs be disallowed in their entirety. 4. View Decision Sodexho Management, Inc.--Costs, B-289605.3, August 6, 2003 DIGEST Attorneys DECISION Sodexho Management, Inc. requests that we determine the amount it should recover from the Department of the Navy for the costs of preparing its proposal and for the costs of filing and pursuing its protest of the Navy's determination, pursuant to Office of Management and Budget (OMB) Circular A-76, that it would be more economical to perform various community services in-house at the Pensacola Naval Regional Complex in Pensacola, Florida, rather than contract for these services with Sodexho under request for proposals (RFP) No. N00140-00-R-G513. We recommend that Sodexho be reimbursed $96,069.85 for the costs of preparing its proposal and $31,943.52 for the costs of filing and pursuing its protest, for a total of $128,013.37 out of its total claim of $687,614. BACKGROUND The Navy issued the RFP on February 4, 2000, as part of a Circular A-76 commercial activities study, to determine whether it would be more economical to perform various community support services in-house, using government employees, or under contract with a private-sector firm. /1/ After a private-sector competition, the Navy concluded that Sodexho's proposal, the only acceptable private-sector proposal, represented the best value to the government among the offers received from the private sector. The contracting officer, acting as the source selection authority (SSA), ultimately concluded that the in-house management plan met the requirements established by the PWS and offered the same level of performance and performance quality as did the Sodexho proposal. After adjustments, Sodexho's total cost to contract for services was $82,641,457 as compared with the in-house plan's cost of $54,460,369, a difference of $26,181,108. Because the in-house plan's costs were more than $26 million lower than Sodexho's adjusted costs, the agency made a tentative decision to perform the requirements in-house. Sodexho filed an administrative appeal on October 9, 2001. The agency's administrative appeal authority found merit in the appeal to the extent that the MEO's pricing was found to be understated by approximately $1.6 million, but otherwise ratified the determination to perform the requirements in-house. The appeal was denied on December 10. On December 27, Sodexho filed a protest in our Office challenging the administrative appeal decision. In view of the extensive number of protest allegations, and the challenges faced by the Navy in responding to all of them within the 30-day timeframe required by our regulations, the parties agreed to handle the protest as a timely agency-level protest pursuant to Federal Acquisition Regulation (FAR) Sec. 33.103, and Sodexho withdrew its GAO protest. The agency provided Sodexho with additional documents, and Sodexho filed a supplemental agency-level protest on February 25, 2002. After the agency submitted its response to Sodexho's agency-level protests, in which it found that the MEO's pricing was understated by a negligible amount but otherwise rejected Sodexho's allegations, Sodexho filed its protest with GAO on April 4. Sodexho's protest allegations fell into three categories. Sodexho first argued that the Navy's overall process was flawed and unfair because the cost comparison was based on an MEO that proposed to perform the requirements using non-appropriated funds instrumentality (NAFI) employees as 82 percent of its in-house workforce. Sodexho next argued that the MEO failed to meet numerous PWS requirements, and that the certification of the MEO was inadequately documented and "directed" by external Navy forces. Sodexho finally argued that the Navy improperly failed to adjust the in-house offer to equal the level of performance and performance quality offered by Sodexho.