Asking Too Much? GAO Grants Only 1% of Protester’s Claimed Costs

While GAO regulations allow GAO to recommend an agency reimburse a protester’s costs if the agency takes corrective action, recouping costs can still be an uphill battle.

In AeroSage, LLC, B-416381.6 (Comp. Gen. Mar. 13, 2019, decided before GAO last week, a protester requested $26,450 in costs, but was only reimbursed its initial filing fee, approximately 1 % of that amount.

In the underlying case, AeroSage, LLC, B-416381 (Comp. Gen. Aug. 23, 2018), AeroSage’s protest was partially sustained because the Defense Logistics Agency failed to take into consideration two of the ten contract line item numbers within request for proposals No. SPE605-18-R-0218. Accordingly, GAO “recommend[ed] that the agency reimburse the protester its costs associated with filing and pursuing the protest, including reasonable attorneys’ fees, if any,” but emphasized that “the protester was not represented by counsel in this protest” in a footnote.

Procedures for cost claims are located at 4 C.F.R. § 21.8. After GAO recommends the agency pay the protester’s filing and litigation or bid preparation costs, the protester must file its cost claim with the agency within 60 days. These costs typically include things like attorneys’ fees, time and effort spent submitting an initial claim to the contracting officer, filing fees, and time and effort spent on appeals to GAO. If the protester and agency can’t agree on an acceptable reimbursement amount, however, the protester has 10 days from the time the agency refuses to participate in further cost negotiations to request GAO recommend the owed costs.

In this case, AeroSage represented itself, and as any business that has protested or been protested knows, it takes a lot of time and effort to wade through the mandatory administrative process. In pursuing its cost claims, AeroSage, LLC stated that its President put in over 110 hours of work pursuing the protest, and that AeroSage should be reimbursed for his time at his typical $250 per hour rate. GAO disagreed.

GAO first noted, in accordance with long standing precedent, GAO’s recommendation “that an agency reimburse a protester the costs of preparing its proposal, or filing and pursuing its protest, is not a blank check” and that all cost claims require sufficient documentary support.

GAO took issue with AeroSage’s documentation of its President’s time: a payroll website printout that identified his hourly rate, but did not indicate that the rate came exclusively from his work with AeroSage, nor did additional information provided discuss the methodology used to calculated the rate. Rather than the documents AeroSage provided, the GAO stated that it instead required more “objective evidence of the rate, such as corporate payroll records, W-2 forms or tax records.”

GAO also denied AeroSage’s claim for reimbursement of costs specifically associated with pursuing its claim for costs (as opposed to pursuing the underlying protest). GAO stated that it only recommends reimbursement of this kind when the agency unreasonably delays or fails to give the underlying claim reasonable consideration.

Despite refusing to reimburse AeroSage for the time its President spent pursuing the protest, GAO agreed that AeroSage was owed the $350 GAO Electronic Protest Docketing System (EPDS) filing fee, which the agency did not dispute.

Overall, costs are an important consideration for any business looking to file a bid protest. While hiring an attorney, like those here at Koprince Law, may increase your chance for a successful protest, agencies and the GAO ultimately determine whether or not you’ll be reimbursed for you litigation expenses.