B-213401.3, JUL 22, 1986, 86-2 CPD 88

B-213401.3: Jul 22, 1986

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AMOUNT CLAIMED FOR BID PREPARATION COSTS MAY BE RECOVERED TO THE EXTENT THAT IT IS ADEQUATELY DOCUMENTED AND NOT SHOWN TO BE UNREASONABLE. TO THE EXTENT THAT THE CLAIM IS INADEQUATELY DOCUMENTED. THE AGENCY'S SETTLEMENT OFFER IS CONSIDERED REASONABLE. CLAIMANT IS ENTITLED TO NO FURTHER RECOVERY. 2. ARE DENIED. SUCH COSTS ARE NOT RECOVERABLE IN THE ABSENCE OF EXPRESS STATUTORY OR CONTRACTUAL AUTHORITY. (FISCHER) REQUESTS THAT OUR OFFICE DETERMINE THE AMOUNT IT IS ENTITLED TO RECOVER FROM THE DEPARTMENT OF THE AIR FORCE FOR BID PREPARATION COSTS UNDER INVITATION FOR BIDS (IFB) NO. FISCHER AND THE AIR FORCE HAVE BEEN UNABLE TO REACH AN AGREEMENT ABOUT THE AMOUNT THAT FISCHER IS ENTITLED TO RECOVER.

B-213401.3, JUL 22, 1986, 86-2 CPD 88

BIDS - PREPARATION - COSTS - RECOVERY - QUANTUM OF CLAIM ESTABLISHMENT DIGEST: 1. AMOUNT CLAIMED FOR BID PREPARATION COSTS MAY BE RECOVERED TO THE EXTENT THAT IT IS ADEQUATELY DOCUMENTED AND NOT SHOWN TO BE UNREASONABLE. TO THE EXTENT THAT THE CLAIM IS INADEQUATELY DOCUMENTED, HOWEVER, THE AGENCY'S SETTLEMENT OFFER IS CONSIDERED REASONABLE, AND CLAIMANT IS ENTITLED TO NO FURTHER RECOVERY. 2. REQUESTS FOR PAYMENT OF INTEREST ON BID PREPARATION COST CLAIM, AND ATTORNEY'S FEES FOR PURSUING THE CLAIM, ARE DENIED. SUCH COSTS ARE NOT RECOVERABLE IN THE ABSENCE OF EXPRESS STATUTORY OR CONTRACTUAL AUTHORITY.

FISCHER-WHITE-RANKIN CONTRACTORS, INC.:

FISCHER-WHITE-RANKIN CONTRACTORS, INC. (FISCHER) REQUESTS THAT OUR OFFICE DETERMINE THE AMOUNT IT IS ENTITLED TO RECOVER FROM THE DEPARTMENT OF THE AIR FORCE FOR BID PREPARATION COSTS UNDER INVITATION FOR BIDS (IFB) NO. F05600-83-B-0055 FOR AN ADDITION TO AND ALTERATION OF THE COMMISSARY AT LOWRY AIR FORCE BASE.

WE RECOMMENDED THAT FISCHER BE REIMBURSED FOR THE COST OF PREPARING ITS BID WHEN WE SUSTAINED FISCHER'S PROTEST AGAINST THE AIR FORCE'S CONTRACT AWARD UNDER THE IFB. SEE FISCHER-WHITE-RANKIN CONTRACTORS, INC., B-213401, APR. 24, 1984, 84-1 CPD PARA. 471. /1/ WE AFFIRMED THIS RECOMMENDATION AFTER THE AIR FORCE REQUESTED RECONSIDERATION OF OUR DECISION. SEE DEPARTMENT OF THE AIR FORCE--REQUEST FOR RECONSIDERATION, B-213401.2, JUNE 19, 1984, 84-1 CPD PARA. 640. FISCHER AND THE AIR FORCE HAVE BEEN UNABLE TO REACH AN AGREEMENT ABOUT THE AMOUNT THAT FISCHER IS ENTITLED TO RECOVER. WE FIND THAT FISHER IS ENTITLED TO $4,361.68, AS EXPLAINED BELOW.

FISCHER CLAIMS THAT IT IS ENTITLED TO BE REIMBURSED $15,868.65 FOR THE LABOR HOURS INCURRED IN PREPARING ITS BID (INCLUDING PAYROLL TAXES AND EMPLOYEE BENEFITS) AND $1,762.04 FOR PRORATED OVERHEAD AND EXPENSES, OR A TOTAL OF $17,630.69. AT THE REQUEST OF THIS OFFICE AND THE AIR FORCE, THE DEFENSE CONTRACT AUDIT AGENCY (DCAA) CONDUCTED AN AUDIT OF FISCHER'S RECORDS IN CONNECTION WITH THIS CLAIM. DCAA QUESTIONED $6,614 OF FISCHER'S LABOR COST CLAIM AND $1,363 OF ITS OVERHEAD COST CLAIM. /2/ IN ADDITION, DCAA QUALIFIED THE RESULTS OF ITS AUDIT WITH RESPECT TO THE LABOR HOURS CLAIMED BECAUSE FISCHER WAS UNABLE TO SUPPLY ADEQUATE DOCUMENTATION TO SUPPORT THE CLAIMED COSTS, AND THEREFORE DCAA COULD NOT DETERMINE WHETHER THEY WERE REASONABLE.

THE AIR FORCE ALSO QUESTIONS FISCHER'S LABOR HOUR CLAIM AND ARGUES THAT THE CLAIM SHOULD BE REDUCED BY SUBSTANTIALLY MORE THAN THE $6,614 QUESTIONED BY DCAA BECAUSE, AS NOTED BY DCAA IN QUALIFYING THE RESULTS OF ITS AUDIT, THE CLAIM IS INADEQUATELY DOCUMENTED. SPECIFICALLY, THE ONLY DOCUMENTATION FOR THE CLAIM IS EMPLOYEE TIMECARDS THAT DO NOT IDENTIFY THE LABOR TASKS PERFORMED AND ARE NOT SIGNED BY THE EMPLOYEES. IN THIS CONNECTION, THE AIR FORCE STATES THAT FISCHER INFORMED THE AGENCY, DURING A FACT-FINDING SESSION ON THE CLAIM, THAT THERE WERE SIX OTHER BIDS UNDER PREPARATION AT THE TIME THE INSTANT BID WAS BEING PREPARED. THE AGENCY NOTES THAT FISCHER STATES IT PREPARED THE BID OVER A 3 WEEK PERIOD AND THAT THE FIRM IS CLAIMING THAT FIVE EMPLOYEES (THE PRESIDENT OF THE COMPANY, THREE ESTIMATORS AND A SECRETARY) SPENT 144 HOURS EACH, OR MORE THAN 3 ENTIRE WEEKS, ON THE BID. THE AIR FORCE CONCLUDES THAT THE CLAIM IS SIGNIFICANTLY OVERSTATED AND ASSERTS THAT A MORE REASONABLE LABOR HOUR ESTIMATION IS THAT THESE EMPLOYEES SPENT 25 PERCENT OF THEIR TIME DURING THE 3 WEEK PERIOD ON PREPARATION OF THIS BID. THEREFORE, THE AGENCY PROPOSES TO REIMBURSE FISCHER FOR ONLY 30 HOURS FOR EACH OF THESE EMPLOYEES. IN ADDITION, THE AIR FORCE QUESTIONS FISCHER'S CLAIM OF 80 HOURS FOR ANOTHER SECRETARY, AND PROPOSES TO REIMBURSE FISCHER FOR ONLY 20 HOURS FOR THIS EMPLOYEE, BUT DOES NOT DISPUTE FISCHER'S CLAIM THAT FOUR "BID HELPERS" SPENT 16 HOURS EACH IN PREPARING THE BID.

THE AIR FORCE CALCULATIONS, BASED ON THE CONTRACTOR'S CLAIMED HOURLY RATE FOR EACH OF THE EMPLOYEES (EXCEPT THE PRESIDENT WHOSE RATE WAS QUESTIONED BY DCAA AND FOR WHOM THE DCAA RECOMMENDED RATE IS USED), AND ON THE DCAA RECOMMENDED PAYROLL TAX AND EMPLOYEE BENEFIT RATES, ARE AS FOLLOWS:

(TABLE OMITTED)

IN THE ABSENCE OF ANY EVIDENCE TO THE CONTRARY, WE FIND THE AGENCY'S POSITION REASONABLE. WE AGREE THAT THE DOCUMENTATION FOR THE LABOR HOUR CLAIM IS INADEQUATE SINCE THE TIMECARDS SUPPLIED IN SUPPORT OF THE CLAIM INDICATE NOTHING MORE THAN THAT THE EMPLOYEES ACTUALLY WORKED DURING THE PERIOD IN QUESTION. WE ALSO HAVE NO BASIS TO QUESTION THE AIR FORCE'S ASSERTION THAT ITS CALCULATIONS ARE BASED ON ITS REASONABLE ESTIMATION OF THE TIME NECESSARY TO PREPARE A BID OF THIS NATURE. WHILE FISCHER DOES ASSERT THAT IT CONSULTED AN EXPERT WHO REPORTED THAT THE STANDARD IN THE INDUSTRY FOR BID PREPARATION COSTS IS ONE-HALF TO THREE-QUARTERS OF ONE PERCENT OF THE CONTRACT PRICE ($3,750,000 HERE), THE FIRM PROVIDES NO FURTHER SUBSTANTIATION FOR THIS ASSERTION. ACCORDINGLY, WE FIND THAT FISCHER HAS NOT PROVIDED SUFFICIENT EVIDENCE TO SUPPORT ITS LABOR HOUR CLAIM, AND CONCLUDE THAT THE AIR FORCE'S SETTLEMENT OFFER IS REASONABLE. SEE INTROL CORP., B-218339.2, MAR. 21, 1986, 65 COMP.GEN. ***, 86-1 CPD PARA. 279.

WE NOW TURN TO FISCHER'S CLAIM OF $1,762.04 FOR THE OVERHEAD AND OTHER EXPENSES ASSOCIATED WITH PREPARING ITS BID. THIS CLAIM IS BASED ON THE THEORY THAT BID PREPARATION CONSUMED ONE-THIRD OF THE EXPENSES OF THE COMPANY FOR A PERIOD OF 3 WEEKS, AND IS CALCULATED AS FOLLOWS:

(TABLE OMITTED)

DGAA DETERMINED THAT FISCHER'S CLAIMED OVERHEAD COST EQUATED TO 11.1 PERCENT OF THE FIRM'S LABOR COSTS, INCLUDING PAYROLL TAXES AND EMPLOYEE BENEFITS, AND FOUND THIS RATE TO BE OVERSTATED BY 6.8 PERCENT. AS A RESULT, DCAA QUESTIONED $1,363 OF THE OVERHEAD COSTS CLAIM. THE AIR FORCE, HOWEVER, BELIEVES THAT IT WOULD BE MORE EQUITABLE TO REIMBURSE FISCHER ON THE BASIS OF THE ACTUAL COSTS CLAIMED TO THE EXTENT THAT THERE IS ADEQUATE DOCUMENTATION FOR THE CLAIMED AMOUNTS. IN ADDITION, THE AIR FORCE QUESTIONS FISCHER'S UNSUBSTANTIATED ASSERTION THAT ONE THIRD OF ITS OVERHEAD FOR THE 3 WEEK BID PREPARATION PERIOD IS ATTRIBUTABLE TO THIS BID, AND PROPOSES INSTEAD TO REIMBURSE FISCHER FOR 25 PERCENT OF ITS OVERHEAD COSTS FOR THE 3 WEEK PERIOD. CONSEQUENTLY, THE AIR FORCE PROPOSES TO REIMBURSE FISCHER $1.052.83 FOR OVERHEAD COSTS, AS DISCUSSED MORE FULLY BELOW.

THE AIR FORCE ACCEPTS FISCHER'S CLAIM OF $3,200 FOR RENT FOR THE BASE PERIOD OF ONE MONTH. THE AGENCY ALSO ACCEPTS THE BASE FIGURE OF $904.00 FOR TELEPHONE SERVICE, AND THE CLAIM OF $18 FOR TRAVEL. THE AIR FORCE QUESTIONS THE BASE FIGURES CLAIMED BY FISCHER FOR UTILITIES AND POSTAGE, AND THE CLAIMS FOR CREDIT INVESTIGATIONS OF SUBCONTRACTORS AND OFFICE SUPPLIES AND EQUIPMENT.

REGARDING THE UTILITIES CLAIM OF $600 AS A BASE AMOUNT, THE AIR FORCE ASSERTS THAT THE DOCUMENTATION FOR THIS FIGURE IS INADEQUATE, AND THAT FISCHER HAS PROVIDED NO EXPLANATION OF HOW IT ARRIVED AT THE CLAIMED AMOUNT. NEVERTHELESS, THE AIR FORCE NOTES THAT, ATTACHED TO FISCHER'S CLAIM, ARE ELECTRIC BILLS FOR TWO COMPANY LOCATIONS COVERING THE TIME PERIOD WHEN THE BID WAS PREPARED. THESE BILLS ARE FOR $103.68 AND $104.16, AND THE AIR FORCE ACCEPTS THESE AMOUNTS. IT ALSO ACCEPTS AN AMOUNT OF $21 FOR TRASH SERVICE, FOR WHICH FISCHER HAS SUPPLIED A COPY OF THE BILL.

THERE ARE ALSO COPIES OF BILLS FOR THE RELEVANT TIME PERIOD FOR GAS AND FOR WATER AND SEWER SERVICE. THE AIR FORCE PROPOSES TO REIMBURSE FISCHER NOTHING FOR GAS USAGE BECAUSE IT BELIEVES NO GAS WAS USED DURING THE BID PREPARATION PERIOD. OUR REVIEW, HOWEVER, DISCLOSES THAT FISCHER ACTUALLY WAS BILLED $6.92 FOR GAS USAGE FOR THE RELEVANT PERIOD, ALTHOUGH IT RECEIVED A CREDIT DUE TO A "FLOW THROUGH REFUND" FROM THE SUPPLIER. ACCORDINGLY, WE BELIEVE THAT FISCHER IS ENTITLED TO BE REIMBURSED FOR GAS USAGE BASED ON THE BILLED AMOUNT OF $6.92. REGARDING WATER AND SEWER SERVICE, THE AIR FORCE STATES THAT THE BILL SUBMITTED BY FISCHER IS FOR $14, BUT FISCHER'S PAYMENT CHECK IS FOR $27.80. THE AIR FORCE PROPOSES TO REIMBURSE FISCHER ON THE BASIS OF THE BILLED AMOUNT ONLY. OUR REVIEW SHOWS THAT FISCHER ACTUALLY WAS BILLED $14 FOR WATER, PLUS ANOTHER AMOUNT- - $55.20. THE LATTER AMOUNT WAS CROSSED OUT AND AMENDED BY FISCHER TO READ "$13.80 - 1 BATH," THUS EXPLAINING THE TOTAL PAYMENT OF $27.80. WHILE IT IS NOT CLEAR FROM THE BILL WHAT THE $55.20/$13.80 AMOUNT REPRESENTS (BECAUSE THE IDENTIFYING CODE NUMBER HAS BEEN OBSCURED BY FISCHER'S "PAID" STAMP), WE THINK IT IS REASONABLE TO ASSUME FROM FISCHER'S "1 BATH" ANNOTATION THAT IT REPRESENTS SEWER SERVICE. THEREFORE FIND THAT FISCHER IS ENTITLED TO BE REIMBURSED ON THE BASIS OF THE FULL AMOUNT OF ITS $27.80 PAYMENT FOR WATER AND SEWER SERVICE.

THERE ARE NO OTHER UTILITY BILLS FOR THE RELEVANT TIME PERIOD, NOR IS THERE ANY OTHER DOCUMENTATION TO SUBSTANTIATE THE $600 FIGURE CLAIMED BY FISCHER. ACCORDINGLY, WE FIND THAT THE TOTAL AMOUNT FOR UTILITIES TO BE USED IN CALCULATING FISCHER'S CLAIM IS $263.56, CONSISTING OF THE FOLLOWING AMOUNTS: ELECTRICITY - $207.84 ($103.68 $104.16); TRASH SERVICE - $21.00; GAS - $6.92; WATER AND SEWER SERVICE $27.80.

REGARDING FISCHER'S BASE CLAIM FOR POSTAGE ($1,000) AND ITS CLAIMS FOR CREDIT INVESTIGATIONS OF SUBCONTRACTORS ($143.60), AND OFFICE SUPPLIES AND EQUIPMENT ($301.64), THE AIR FORCE NOTES THAT FISCHER HAS SUPPLIED NO SUBSTANTIATING DOCUMENTATION AT ALL FOR THESE AMOUNTS. OUR REVIEW OF THE RECORD CONFIRMS THIS POSITION. WE THEREFORE ACCEPT THE AIR FORCE'S ESTIMATION OF REASONABLE AMOUNTS FOR THESE CLAIMS. SEE INTROL CORP., B-218399.2, 65 COMP.GEN. ***, SUPRA. IN ADDITION, IN THE ABSENCE OF ANY PERSUASIVE EVIDENCE TO THE CONTRARY, WE ACCEPT THE AGENCY'S POSITION THAT IT IS MORE REASONABLE TO CALCULATE FISCHER'S BID PREPARATION COSTS ON THE BASIS THAT 25 PERCENT OF THE FIRM'S OVERHEAD COSTS ARE ATTRIBUTABLE TO THIS BID THAN ON THE UNSUBSTANTIATED 33 PERCENT FIGURE USED BY FISCHER. ID.

WE CONCLUDE THAT FISCHER IS ENTITLED TO RECOVER $1,056.40 FOR ITS OVERHEAD COST CLAIM, CALCULATED AS FOLLOWS:

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WE FIND THAT FISCHER IS ENTITLED TO RECOVER A TOTAL OF $4,361.68 FOR ITS BID PREPARATION COSTS. THIS CONSISTS OF $3,305.28 FOR LABOR, PAYROLL TAXES AND EMPLOYEE BENEFITS, AND $1,056.40 FOR OVERHEAD COSTS.

FISCHER ALSO REQUESTS THAT IT BE REIMBURSED FOR INTEREST ON ITS CLAIM FROM THE DATE OF OUR DECISION SUSTAINING ITS PROTEST AND FOR ITS ATTORNEY'S FEES INCURRED IN FILING AND PURSUING THE CLAIM. INTEREST ON CLAIMS AGAINST THE GOVERNMENT IS NOT RECOVERABLE UNLESS IT IS EXPRESSLY AUTHORIZED BY STATUTE OR BY CONTRACT, WHICH IS NOT THE CASE HERE. SEE EFFECTIVE LEARNING, INC.-- REQUEST FOR REVIEW OF PRIOR CLAIM DECISION, B-215505, FEB. 19, 1985, 85-1 CPD PARA. 207. SIMILARLY, LEGAL FEES ARISING OUT OF A CLAIM ARE NOT COMPENSABLE WHERE, AS HERE, NO STATUTE OR CONTRACT PROVISION AUTHORIZES THEIR RECOVERY. HARCO INC. - CLAIM FOR LEGAL FEES AND BID PREPARATION COSTS, B-189045, JAN. 26, 1979, 79-1 CPD PARA. 55. ACCORDINGLY, FISCHER'S REQUESTS FOR PAYMENT OF INTEREST AND ATTORNEY'S FEES IS DENIED.

/1/ WE AGREED WITH FISCHER'S CONTENTION THAT THE AWARDEE'S BID WAS AMBIGUOUS AND SHOULD HAVE BEEN REJECTED.

/2/ SPECIFICALLY, DCAA FOUND, BASED ON PAYROLL RECORDS, THAT THE COMPANY PRESIDENT'S LABOR RATE WAS OVERSTATED BY $7.21 PER HOUR, THE CLAIMED PAYROLL TAX RATE WAS OVERSTATED BY 4.5 PERCENT, AND THE EMPLOYEE BENEFIT RATE WAS OVERSTATED BY 18.9 PERCENT. DCAA ALSO FOUND FISCHER'S OVERHEAD RATE TO BE OVERSTATED BY 6.8 PERCENT.