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GSBCA 13084-C(12930-P) GRANTED;
GSBCA 13086-C(12936-P) GRANTED IN PART: August 8, 1995
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GSBCA 13084-C(12930-P), 13086-C(12936-P)
MATERIALS, COMMUNICATION & COMPUTERS, INC.,
and
NCI INFORMATION SYSTEMS, INC.,
Applicants,
v.
DEFENSE LOGISTICS AGENCY,
Respondent.
Kenneth S. Kramer, James M. Weitzel, Jr., and Louis D.
Victorino of Fried, Frank, Harris, Shriver & Jacobson,
Washington, DC, counsel for Applicant Materials, Communication &
Computers, Inc.
John R. Tolle and William T. Welch of Barton, Mountain &
Tolle, McLean, VA; and J. Patrick McMahon of Vienna, VA, counsel
for Applicant NCI Information Systems, Inc.
Jo H. DuBose and Walter Thomas, Office of General Counsel,
Defense Logistics Agency, Alexandria, VA, counsel for Respondent.
Before Board Judges PARKER, BORWICK, and VERGILIO.
BORWICK, Board Judge.
We consider the cost applications of Materials,
Communication & Computers, Inc. (MATCOM2) and NCI Information
Systems, Inc. (NCI), as prevailing parties in the protests of
Materials Communications & Computers, Inc. v. Defense Logistics
Agency, GSBCA 12930-P, et al., 94-3 BCA 27,261, 1994 BPD 269.
NCI seeks $226,904.09 for the costs of filing and pursuing its
protest and costs of proposal preparation; MATCOM2 seeks
$48,254.65 for the costs of filing and pursuing its protest.
Both MATCOM2 and NCI initially challenged respondent's
evaluations and award determination. The respondent, Defense
Logistics Agency (DLA), recognized that it had underestimated the
number of labor hours necessary to perform the contract and
issued an amended solicitation reflecting increased labor hours.
The protesters then objected to the respondent's refusal to allow
those vendors in the competitive range to submit new best and
final offers (BAFOs) in response to the amendment. MATCOM2,
however, maintained that amended technical BAFOs were not
required.
NCI also challenged the acceptability of both awardee's and
MATCOM2's proposals, based upon allegedly insufficient resumes
and experience of proposed employees. NCI challenged the
adequacy of respondent's discussions with NCI concerning its
pricing of certain sample tasks. Finally, NCI maintained that
respondent failed to conduct a cost-technical trade-off, as
required by the solicitation.
Shortly after the filing of the protests, respondent stated
its willingness to allow the vendors in the competitive range to
submit amended cost BAFOs, but not amended technical BAFOs.
Consequently, most of the hearing time was spent exploring the
significance of the change in labor hours to vendors' technical
proposals. A smaller portion of the hearing was spent on the
issue of the sufficiency of the resumes, the experience of
employees proposed, and the adequacy of discussions with NCI.
As to the BAFO issue, MATCOM2 and NCI were prevailing
parties, in that respondent agreed to seek new BAFOs in response
to the amended requirement for labor hours. We concluded that
regulation required respondent to request both technical and cost
BAFOs, and we revised respondent's delegation of procurement
authority accordingly.
NCI, while prevailing completely on the BAFO issue, did not
prevail on the issues of technical acceptability of its
competitors' proposals or the alleged inadequate discussions that
NCI had raised. We determined the issue of the alleged failure
to conduct a cost-technical trade-off to be moot considering the
relief granted. Materials Communications & Computers, Inc. v.
Defense Logistics Agency, GSBCA 12930-P, et al., 95-1 BCA
27,312, at 136,133, 136,135-36, 1994 BPD 269, at 14, 17-20. We
stated that because of the relief granted, NCI had the
opportunity to submit another proposal. Id. at 136,136, 1994 BPD
at 20.
MATCOM2 seeks $44,788.50 of legal fees for 145.2 hours of
attorney and paralegal work on the protests, and $3,466.15 for
ancillary expenses (courier, document reproduction, secretarial
overtime, and computerized legal research billed at cost), for a
total of $48,254.65 as the cost of filing and pursuing its
protest. MATCOM2's Application, Exhibits B, C. The hours
expended and costs incurred are supported by the record,
reasonable and related to filing and pursuing the protests.
NCI seeks a total of $114,670.80 for its counsel fees and
expenses as its costs of filing and pursuing the protests. NCI's
Application at 9.
The total of the invoices attached to NCI's application--
$118,338.29--is greater than $114,670.80.1 The invoices show
that NCI's counsel Barton Mountain & Tolle (BM&T) rendered
attorney services of 360.79 hours for this protest and on the
cost application for attorney fee of $86,384.15. BM&T incurred
$835.64 of expenses (courier, facsimile and reproduction), as
well, for a total of $87,219.79. NCI's Application, Exhibits 1-
4.
The invoices show that NCI's counsel J. Patrick McMahon
spent 219.89 hours on the protest and the cost application plus
$98.50 of expenses, for a total attorney fee and expense of
$31,148.50. NCI's Application, Exhibits 5-8.
The attorneys for both MATCOM2 and NCI kept detailed
schedules, which describe the work they did, when they did the
work, and how the work related to the filing and the pursuit of
the protest or the cost application.
NCI claims in-house protest costs of $11,042.54 and
references its Exhibit 9. NCI's Application at 9. The expenses
are for labor, overhead, general and administrative overhead on
the labor, "ODCs" ("other direct costs") and general and
administrative overhead on the other direct costs from May 13,
1994 through October 24, 1994. NCI's Application, Exhibit 9.
The breakout behind this schedule reflects nine employees
allegedly working a total of 131 hours on the protest for a total
direct labor cost claimed of $4,038.37. NCI does not describe
what work these employees did, how long it took the employees to
do the work, and how the work contributed to NCI's pursuit of the
protest. The breakout mentions travel and lunch, but the
breakout does not describe the dates of the travel or the
lunches, or the relationship of the expenses to pursuit of the
protest. The itemized "other direct costs" include $3,532.25 for
transcripts.
____________________
1 The cost application's breakout immediately below the
figure of $114,670.80 shows a total of $118,332.84. NCI's
Application at 9. There is a difference of $35.45 between the
total shown on the invoice and the breakout; in the breakout, NCI
states its costs for BM&T's services and expenditures dated
November 23, 1994 was $3,662. The invoices show a billed cost of
$3,697.45. NCI's Application, Exhibit 4. We conclude that the
appropriate figure to use for computations is $114,670.80--the
figure NCI requested in its application.
NCI claims proposal preparation costs of $101,190.71. NCI's
Application at 10. NCI argues:
These proposal costs were those that NCI incurred
before DLA's most recent request for BAFOs on cost and
technical. The costs were incurred in preparing the
proposal that was submitted in response to DLA's
original solicitation which contained an incorrect
number of labor hours. If DLA had included the correct
number of labor hours in the original solicitation, NCI
would not have needlessly incurred the proposal
preparation costs that it did.
Id.
Discussion
Prevailing parties are entitled to recover their costs of
filing and pursuing the protests, including reasonable attorney
fees and expenses, and in-house employee salaries and expenses.
40 U.S.C. 759(f)(5)(C) (1988); Sterling Federal Systems v.
Goldin, 16 F.3d 1177 (Fed. Cir. 1994); Integrated Systems Group,
Inc. v. Department of the Army, GSBCA 12622-C(12521-P, et al.),
94-2 BCA 26,819, 1994 BPD 65.
The extent of the protester's success is a crucial factor in
determining the proper amount of an award. In determining a
reasonable award, we deduct time spent on discrete and
unsuccessful claims. U.S. West Information Systems Inc., GSBCA
9114-C(8995-P), et al., 89-2 BCA 21,774, at 109,557, 1989 BPD
119, at 8. But where the successful and non-successful claims
are not readily severable, as in Planning Research Corp., GSBCA
10905-C(10694-P), et al., 91-3 BCA 24,159, at 120,879, 1991 BPD
147, at 4, it is inappropriate to treat protester's successful
and unsuccessful protest claims separately for purposes of an
award of costs. See Grumman Data Systems Corp. v. Department of
the Air Force, GSBCA 11799-C(11635-P), 93-2 BCA 25,773, at
128,243, 1993 BPD 16 at 7 (protester's cost-technical trade-off
claim required a comprehensive review of the RFP requirements and
how the parties offered to satisfy them); see also Laptop Falls
Church v. Department of Justice, GSBCA 12229-C(12117-P), 93-2 BCA
25,857, at 128,660, 1993 BPD 56, at 3 (Board refused to sever
cost claims by issue where protesters received substantial relief
on the basis of a complaint alleging factually-intertwined
Government errors).
NCI's petition
Attorney fees and expenses
NCI argues that the issue on which it prevailed--the
violation of regulation in DLA's refusal to allow amended
technical BAFOs--"[was] inextricably intertwined with the other
issues in the protest and not fully severable and distinct."
NCI's Application at 8. We disagree. The issue on which NCI
prevailed, the necessity for revised technical BAFOs, required
proof of the effect of respondent's labor hour changes on NCI's
proposal. Those facts were different from facts necessary to
prove the issues on which NCI lost. The issue of the adequacy of
discussions centered on the Government's communications with NCI
and whether portions of NCI's proposal were weaknesses or
deficiencies. The issue of technical acceptability of other
proposals related to the sufficiency of resumes and quality of
personnel, and did not concern the Government's estimate of labor
hours.
We have reviewed NCI's petition for attorney fees and
expenses, and conclude that the hourly rate and number of hours
worked are fair and reasonable given the standard hourly rate for
lawyers in the community and the number of issues in the protest.
Since the issues are segregable, we must make an apportionment to
take into account the degree of success obtained. In this case,
we conclude that $55,000 represents for NCI reasonable recovery
on the successful issue of protest.
NCI's in-house expenses
NCI claims $11,042.54 as its in-house expenses for filing
and pursuing the protest. Unfortunately, while the dollar amount
of the costs is documented, save for the transcripts, when the
costs were incurred, the purpose for incurring the costs and the
reasonableness of the costs are not. There is simply no way to
tell from the schedules submitted whether the expenses were
reasonable as to purpose or amount, or whether the costs were
validly incurred as costs of "filing and pursuing the protest."
40 U.S.C. 759(f)(5)(C) (1988). Our concern as to purpose of
some of the costs stems from learning that costs are claimed for
a period beginning from May 13, 1994. NCI's Application, Exhibit
9 at 2 (unnumbered page). NCI filed its protest on August 15,
some three months after May 13. There is no explanation in NCI's
submission of how expenses incurred in May served the purpose of
pursuing a protest filed in August. Expense claims must be
adequately documented as to necessity and reasonableness of
amount. Computer Data Systems, Inc. v. General Services
Administration, GSBCA 12297-C(12195-P), 93-3 BCA 26,201, at
130,423, 1993 BPD 174, at 2. NCI failed to submit the
documentation required. For example, while we recognize that NCI
must have incurred some in-house travel expenses, since two of
its employees testified at the hearing in Washington DC, we
cannot create for NCI that which NCI has failed to submit: a well
documented claim for expenses of pursuing the protest. We grant
NCI's claim for the transcript, in the amount of $3,532.25. The
remainder of NCI's claim for in-house expenses is denied.
NCI's claim for proposal preparation costs
A prevailing party is entitled to costs of proposal
preparation where the Government by violation of statute or
regulation caused the successful party to incur such costs
unnecessarily. Communications Technology Applications, Inc.,
GSBCA 10172-C(9978-P), 90-3 BCA 23,261, at 116,700, 1990 BPD
207, at 5. NCI is not entitled to proposal preparation costs
here. NCI maintains that if the Government had published an
accurate estimate of labor hours in the original solicitation,
NCI would not have submitted the proposal that it did. NCI
misfocuses the issue of protest. NCI did not allege or prevail
on a violation of regulation stemming from the DLA's inaccurate
statement of expected labor hours in the original solicitation.
NCI, rather, alleged and proved that the violation occurred when
respondent amended its labor hours without giving vendors an
opportunity to submit new technical BAFOs. Further, NCI's
initial proposal was not wasted; it enabled NCI to remain in the
competition and submit a second round of BAFOs.2 NCI's claim
for proposal costs is denied.
MATCOM2's application
We have reviewed MATCOM2's application for the costs of
filing and pursuing the protests (i.e., attorney fees and
expenses) and find them reasonable as to purpose and amount.
MATCOM2 is entitled to $48,254.65 as the cost of filing and
pursuing the protests.
Decision
NCI's application is GRANTED IN PART. NCI is entitled to
$58,532.25, which NCI necessarily and reasonably incurred in
filing and pursuing the protest. This sum shall be paid, without
interest, from the permanent indefinite judgment fund, 31 U.S.C.
1304 (1988). 40 U.S.C. 759(f)(5)(C) (1988). MATCOM2's
application is GRANTED. MATCOM2 is entitled to $48,254.65, which
MATCOM2 necessarily and reasonably incurred in filing and
____________________
2 The fee-shifting provisions of the Brooks Act were not
meant to insure businesses from the risks and the costs of doing
business with the Government. The Government's changing its mind
as to its estimated number of labor hours was, in this case,
simply a cost of doing business.
pursuing the protest. This sum shall be paid, without interest,
from the permanent indefinite judgment fund, 31 U.S.C. 1304
(1988). 40 U.S.C. 759(f)(5)(C) (1988).
________________________________
ANTHONY S. BORWICK
Board Judge
We concur:
______________________________ ______________________________
ROBERT W. PARKER JOSEPH A. VERGILIO
Board Judge Board Judge