Link: GAO Opinion
Agency: United States Marine Corps
Disposition: Claim denied.
1. Claim for costs is denied where protester fails to adequately document its claim to show that the hourly rates upon which costs are calculated reflect its employee’s actual rate of compensation plus reasonable overhead and fringe benefits, that the costs claimed were actually incurred, or that the costs claimed were properly attributable to the filing and pursuit of the protests.
2. Claim related to recovery of proposal preparation costs is denied where decision sustaining the protest did not include recommendation that protester recover its proposal preparation costs.
General Counsel P.C. Highlight:
GAO states that a recommendation from GAO that an agency reimburse a protester the costs of preparing its proposal, or filing and pursuing its protest, is not a blank check. A protester seeking to recover the costs of pursuing a protest must submit sufficient evidence to support its claim. At a minimum, claims for reimbursement must identify and support the amounts claimed for each individual expense (including cost data to support the calculation of claimed hourly rates for employees), the purpose for which that expense was incurred, and how the expense relates to the protest filed at GAO. Further, the award of costs is intended to relieve protesters with valid claims of the burden of vindicating the public interest which Congress seeks to promote; it is not intended as a reward to prevailing protesters or as a penalty imposed upon the government. Thus, a protester may not recover profit on its own employees’ time in filing and pursuing its protest. Although GAO recognizes that the requirement for documentation may sometimes entail certain practical difficulties, GAO does not consider it unreasonable to require a protester to document in some detail 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.
GAO has reviewed the record and agrees with the USMC that IPG has failed to provide sufficient support for its claim. With regard to the claimed costs of legal work performed by IPG’s legal assistant, IPG has failed to substantiate that $80 per hour represents its legal assistant’s actual rate of compensation, exclusive of profit, that the costs claimed were actually incurred, or that the costs claimed were properly attributable to the pursuit of IPG’s protests. First, in support of its claim that $80 per hour was the actual rate paid to its legal assistant and was actually incurred, IPG supplied a payroll system print-out stating only that the legal assistant’s wages were $16,083.23 in “QTR 2.” The supplied print-out did not set forth an hourly rate or record of hours worked and, in fact, does not so much as clearly designate the year or period to which “QTR 2” refers. The only information that relates the supplied payroll information to the $80 hourly rate claimed by IPG is IPG’s assertion that the payroll record “covered 200 hours of work on contracts, proposals, [and] legal issues.” This bare assertion is insufficient to establish that $80 per hour was the actual wage paid to IPG’s legal assistant.
Next, GAO notes that the “QTR 2” payroll record supplied by IPG indicates that IPG paid its legal assistant $16,083.23 in wages, far less than the $32,160 it claims that it incurred in legal costs of pursuing its protest. IPG explains this disparity with the statement that “[s]ince July 2008, [IPG’s legal assistant] has not received a payroll as well as most of IPG’s staff . . . due to loss of business . . . .” However, as IPG’s legal assistant’s work on the protest after July 2008 is not supported by the supplied payroll record or by any other customary business records, such as timecards or billing logs, to show that wages are actually owed, these amounts similarly cannot be reimbursed.
Finally, the evidence supplied is also insufficient to establish that the $16,083.23 in wages detailed by the payroll record was incurred in pursuit of the protest. IPG has asserted that the payroll record “covered 200 hours of work on contracts, proposals, [and] legal issues,” but has not provided GAO with any evidence, such as timecards or billing records, to demonstrate the specific dates on which portions of the $16,083.23 were incurred and for what purpose, that might allow us to establish what specific amounts were incurred in support of the protests. Where, as here, a protester has aggregated allowable and unallowable costs, such that GAO cannot tell from the record before us what portion is unallowable, the entire amount must be disallowed even though some portion of the claim may be properly payable. With regard to IPG’s claim for $10,396 related to preparation for competing for the protested requirements, GAO agrees with the USMC that these costs are not reimbursable. Even though GAO ultimately agreed with IPG that the USMC was incorrect to make an SDVOSBC sole-source award and to set aside another solicitation for competition restricted to SDVOSBC firms, without considering whether two or more qualified HUBZone firms were prepared to compete for the requirement, IPG was not eligible to compete for the protested solicitations as issued, and we did not recommend that IPG be reimbursed the costs of preparing proposals for the protested requirements. In sum, IPG has failed to provide sufficient evidence to warrant a recommendation for reimbursement for any part of its $32,160 claim for legal costs, or for any costs incurred in anticipation of preparing proposals. Accordingly, the claim for costs is denied.