Take Two? GAO Grants Reconsideration of Cost Claim

Requests for reconsideration are rarely granted by GAO and reconsideration of cost claims is even more unique. But GAO recently granted one of these unicorns–recommending additional reimbursement of more than $20,000 to the protester.

The history of Voith Hydro, Inc., B-416243.5 (Comp. Gen. Jan. 31, 2020) goes back to April 2018. Voith Hydro protested a contract awarded by the Army Corps of Engineers for design, supply, and installation of turbines in several hydroelectric generator units at the McNary Lock and Dam Powerhouse in Oregon. In particular, Voith Hydro highlighted flaws in the Corps’ evaluation of technical, past performance, and price proposals which resulted in award to a different offeror.

After much back and forth at GAO (including filing of the protest, the initial agency report, a supplemental protest and supplemental agency report, and comments by both the protester and intervenor), the Corps requested “outcome prediction” alternative dispute resolution (or ADR), which GAO granted.

Typically, during the course of outcome prediction ADR, the assigned GAO attorney will give the parties a sneak peak into what GAO’s decision on the case is likely to be. From there, the parties are encouraged to take appropriate action to resolve the protest (i.e. the protester withdraw the protest or the agency take corrective action, as the case may be) before GAO issues a written opinion. Here, the GAO attorney informed Voith Hydro, the Corps, and the intervenor that GAO was likely to sustain the protest. In response, the Corps moved to take corrective action by reevaluating the proposals it had received and GAO dismissed the protest.

Because Voith Hydro’s protest was ultimately successful, Voith Hydro requested that it receive reasonable reimbursement of the costs associated with filing its protest to the tune of $120,618.74. Ultimately, GAO recommended the Corps pay around $98,500 of the sum requested, but refused to recommend payment of the remaining $22,000. In GAO’s estimation, the remaining amount was associated with Voith Hydro’s costs “in pursuit of its request for a recommendation of protest costs and costs associated with pursuing its claim.”

Typically, parties cannot claim additional costs for the time and effort spent preparing cost claims. Here, Voith Hydro explained that GAO misunderstood the $22,000 amount. Rather than accounting for the time it took Voith Hydro to calculate the amount it was due (referred to as its quantum claim), according to Voith Hydro, the amount was incurred for time spent reviewing the Corps’ proposed corrective action and GAO’s dismissal and preparing the entitlement portion of its claim (i.e. why it deserved cost reimbursement). GAO concurred, admitting its error and agreeing to recommend reimbursement of the full amount.

GAO also clarified its standard for reviewing cost entitlement claims. Importantly, it held that it is proper for GAO to recommend reimbursement of costs generally associated with preparing a request for entitlement, but not for any time taken to calculate how much is owed (the quantum claim).

All in all, GAO’s second take ultimately recommended that Voith Hydro receive the full amount it initially requested. Although cases like this are incredibly fact specific and few and far between, if you think you might have a similar claim deserving reconsideration, email us or give us a call at 785-200-8919.