Link: GAO Decision
Protestor: Shaka, Inc.
Agency: Department of the Army
Disposition: Reimbursement of requested amount recommended, as well as costs of pursuing this claim.
- GAO recommends that protester’s claim for attorneys’ fees be reimbursed where the attorneys’ hours charged are documented and reasonable, and the agency has not identified any specific hours as excessive or articulated a reasoned analysis as to why payment for such hours should be disallowed.
- Attorneys’ fees incurred by subcontractor of the protester in pursuit of the protest may be reimbursed where the attorneys’ fees were incurred in concert with, and on behalf of the protester pursuant to an agreement between the protester and subcontractor to split the legal costs of pursuing the protest.
General Counsel PC Highlight:
Shaka, Inc. requested that the GAO recommend that it be reimbursed in the amount of $22,275 for its costs in filing and pursuing its protest challenging the rejection of its bid under an IFB for the replacement of bridge bearings and related services on the Emsworth Locks and Dam main channel service bridge on the Ohio River in Pennsylvania. The IFB required that offerors submit an acceptable bid on a standard form (SF) 24. Shaka submitted the lowest bid on an SF 24, but was determined to be nonresponsive because it included a letter signed by Shaka and Joseph B. Fay Co. (Fay), its intended subcontractor, which the agency concluded conditioned the surety’s obligation to the government on a contractual relationship between Shaka and Fay.
The GAO sustained Shaka’s protest, and Shaka submitted a certified claim containing detailed documentation supporting each of its claimed costs. The agency responded that it was not permitted to reimburse attorneys’ fees at a rate above $150; Shaka pointed out that this limitation does not apply to small businesses. Shaka submitted a revised claim including its own attorneys’ hours at their full rate, and the portion incurred by Fay, a large business, at $150 per hour. In this request for reimbursement to the GAO, the agency no longer objected to the claimed hourly rates, but raised other objections.
The GAO first disagreed with the agency’s argument that the attorneys’ hours claimed were excessive because the protest issue was straightforward and simplistic in nature. It pointed out that the agency bears the burden of identifying specific hours as excessive and must provide a reasoned analysis supporting its assertions; it also noted that the issue was a case of first impression and was not narrow, simplistic, and uncomplicated. The GAO then found without merit the argument that the hours incurred by Fay were not reimbursable because it was not a party to the protest. It noted that Fay was not participating in the protest as a potential subcontractor acting independently of the interested party, but rather acted in concert with Shaka and had an agreement to split the legal costs of the protest.
A protestor should always keep detailed records indicating the amount of work dedicated to pursuing its protest against the agency. Records should be clearly separated by issue to prevent a denial of reimbursement should the agency take corrective action on the basis of a single issue. Although subcontractors can assist with the legal work in the pursuit of a protest, the parties must ensure that their legal work be conducted in concert with each other and that the subcontractor not be independently representing its own interests in the outcome of the protest.