B-228501.2, Apr 29, 1988, 88-1 CPD 418

B-228501.2, Apr 29, 1988, 88-1 CPD 418

PROCUREMENT - Bid Protests - GAO procedures - Preparation costs PROCUREMENT - Competitive Negotiation - Offers - Preparation costs DIGEST: Protester is entitled to recover the costs of proposal preparation and of filing and pursuing its protest, including attorneys' fees, where, although given an opportunity to compete for a subsequent contract, it has unreasonably been excluded from a significant portion of prior contract.

Hydro Research Science, Inc.-- Reconsideration:

Hydro Research Science, Inc. (HRS), requests that we reconsider our dismissal of its protest of the award of a contract to Hydronetics, Inc., under request for proposals (RFP) No. DACW07-87-R-0049, issued by the United States Army Corps of Engineers (Corps). The RFP sought services for the operation and maintenance of the San Francisco Bay/Delta Model. We dismissed the protest as academic, because, before we could resolve the matter, the Corps informed us that, due to flaws in the procurement, it would terminate the contract and competitively resolicit the RFP requirements.

In requesting reconsideration, HRS contends that our dismissal of its protest as academic was improper because HRS did not receive the relief it requested. Specifically, HRS argues that we should have recommended award of the contract to HRS where the Corps admitted errors in its procurement or, in the alternative, found HRS to be entitled to the costs of its proposal preparation and of filing and pursuing its protest.

Upon reconsideration, we find that the protest should not have been dismissed as academic since the protester was entitled to the recovery of its costs of proposal preparation and of filing and pursuing its protest. Specifically, the protest had merit, as acknowledged by the agency, and we sustain it.

The RFP, issued August 12, 1987, as a 100 percent small business set aside, contemplated the award of a fixed-price, requirements contract for the operation and maintenance of the San Francisco Bay-Tidal Hydraulic Model for 1 basic and 4 option years. The RFP listed the following evaluation factors, in descending order of importance:

1. Contractor's basic management plan;

2. Past experience and accomplishment of the contractor in the successful management of hydraulic laboratory facility to include the conduct of physical model studies; and

3. Past experience of key personnel directly responsible for the operation and maintenance of the model facility.

The RFP advised that award would be made on the basis of a combination of technical merit and price, "such that the selection official can determine that the higher price of a particular offer is more advantageous to the Government by virtue of greater technical merit." Offerors' price proposals were to be based upon a 1-week hypothetical model test. The relative importance of price to technical merit was not explicitly stated.

By the closing date for receipt of proposals, only HRS and Hydronetics had submitted proposals. The technical review panel rated the two proposals as follows:

(TABLE OMITTED)

The Corps informed us that the RFP did not list the evaluation factors in the order of importance in which they were applied during technical evaluation and that award had been made, without discussions, to other than the offeror offering the lowest overall cost to the government. The Corps stated that it would terminate Hydronetics' contract at the conclusion of the current work order being performed by Hydronetics and that it would reprocure the necessary services. The Corps also stated that termination of the current work order would not be in the best interest of the government because termination costs would be substantial and the government would suffer additional costs related to inefficiencies involved in suspending the current work.

On December 30, 1987, the Corps terminated Hydronetics' contract, except to the extent necessary to complete the current work order. We dismissed HRS's protest on January 5, 1988. The Corps issued solicitation number DACW07-88-R-0023 on January 19, 1988, to procure the required services. /1/

HRS argues that since the Corps admitted that it erred in awarding a contract to Hydronetics that we should have recommended award of the contract to HRS. We do not agree that HRS was entitled to the award of a contract.

In this case, only HRS and Hydronetics submitted proposals in response to the RFP. After evaluation of initial proposals, the Corps found Hydronetics to be the technically superior, higher priced offeror. While award could not properly be made, as it was, on the basis of initial proposals to other than the offeror offering the "lowest overall cost" to the government, see Pan Am Support Services, Inc.-- Request for Reconsideration, 66 Comp.Gen. *** (1987), 87-1 CPD Para. 512, the Corps could have conducted discussions and ultimately selected Hydronetics' proposal for award as the most advantageous, price and other factors considered.

HRS also argues in its request for reconsideration that, as an alternative to recommending the award of a contract, we should have found HRS to be entitled to the costs of its proposal preparation and filing and pursuing this protest. Our Bid Protest Regulations permit the recovery of the costs of filing and pursuing a protest where the protester has been unreasonably excluded from the procurement, unless we recommend that the contract be awarded to the protester and the protester receives the award. 4 C.F.R. Sec. 21.6(e) (1987). Generally, where the protester is given an opportunity to compete for the award under a corrected solicitation, the recovery of the costs of filing and pursuing the protest is inappropriate. See Federal Properties of R.I., Inc., B-218192.2, May 7, 1985, 85-1 CPD Para. 508; The Hamilton Tool Co., B-218260.4, Aug. 6, 1985, 85-2 CPD Para. 132. However, where we have found that the protester, although given an opportunity to compete for a subsequent contract, has lost the opportunity to compete for and be awarded a significant portion of the prior contract, we have allowed the recovery of the costs of filing and pursuing the protest. See Pride Computer Service, Inc., B-227805, Sept. 25, 1987, 87-2 CPD Para. 302; E.H. Pechan & Associates, Inc., B-221058, Mar. 20, 1986, 86-1 CPD Para. 278. Additionally, the recovery of costs for proposal preparation may be allowed where the protester was unreasonably excluded from the competition and no other practicable remedy is available. Pride Computer Service, Inc., B-227805, supra.

In this case, Hydronetics has received two work orders under the requirements contract for the training of its personnel and for the maintenance of the model. The negotiated, fixed-price for these two work orders was approximately $97,500. HRS states that during its prior contract at the Bay/Delta Model it had total vouchers of $374,660. The work orders received by Hydronetics represented more than 25 percent of the amount received by HRS under its prior contract. We find the work performed by Hydronetics to be a significant portion of the services to be competed. Accordingly, since HRS will not be given the opportunity to compete for that portion of the award because of the Corps' improper action, we find that HRS is entitled to the costs of filing and pursuing the protest, including attorneys' fees, and of preparing its proposal. HRS should submit its claim for these costs directly to the agency. C.F.R. Sec. 21.6(f).

/1/ On February 11, 1988, HRS filed a new protest, B-230208, against the new solicitation, which is pending, arguing that as structured, it is unduly restrictive of competition.