_____________________________________________ MOTION FOR COSTS GRANTED: October 29, 1998 _____________________________________________ GSBCA 12317-C(12208-P) WESTINGHOUSE KSC CO., INC., Protester, v. NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, Respondent. Richard O. Duvall, Timothy J. Bloomfield, Richard L. Moorhouse, William J. Dempster, Michael H. Ditton, and Giannina Lynn of Dunnells, Duvall & Porter, Washington, DC, counsel for Protester. David P. Forbes, Sumara M. Thompson-King, and Robert M. Stephens, Office of the General Counsel, National Aeronautics and Space Administration Headquarters, Washington, DC; and Dudley R. Cannon, Jr., and Douglas G. Hendriksen, National Aeronautics and Space Administration, Kennedy Space Center, FL, counsel for Respondent. Before Board Judges DANIELS (Chairman), HENDLEY, and VERGILIO. HENDLEY, Board Judge. The protester seeks to recover its costs of filing and successfully pursuing its protest before this Board. Under 40 U.S.C. 759(f)(5)(B), (C) (1988), when this Board determines that a challenged agency action violates a statute or regulation or the conditions of any delegation of procurement authority, . . . it may . . . further declare an appropriate interested party to be entitled to the costs of--(i) filing and pursuing the protest, including reasonable attorney's fees, and (ii) bid and proposal preparation. This statute authorizes the Board to award costs and exercise discretion to determine both if a party is "appropriate" and entitled to payment of costs from the permanent indefinite judgment fund, and if the amount requested is "reasonable." On December 2, 1992, the Board docketed a protest filed by EG&G Florida, Inc., contending that the respondent, the National Aeronautics and Space Administration (NASA), had improperly selected Lockheed Space Operations Company, an intervenor in the protest, for award of a contract for automatic data processing services. That protest was followed by protests filed by Bamsi, Inc. on December 3 and Westinghouse KSC Company, Inc. on December 4. Each protester intervened in the other protests. The protests were consolidated for further proceedings before this Board. The respondent's delegation of procurement authority was suspended on December 10. In our order on proceedings of December 4, we set forth a schedule for resolving the protests. However, shortly before the originally scheduled hearing date, the parties sought a postpone- ment of the hearing and informed the Board that they were in the process of settling the cases. We rescheduled the hearing, and a settlement ensued. On January 26, 1993, the parties filed a "joint stipulation of dismissal without prejudice" in each protest. The requested dismissals were to become dismissals "with prejudice 10 working days after debriefings following the announcement of a selection of an awardee based on the evaluation of best and final offers ('BAFOS') submitted in accordance with the revised BOC [Base Operations Contract] request for Proposals ('RFP')." Accordingly, on January 28, 1993, the Board dismissed without prejudice Westinghouse's protest pursuant to Westinghouse's and the respondent's signed joint stipulation of dismissal without prejudice, with attached settlement agreement. EG&G Florida, Inc. v. National Aeronautics and Space Administration, GSBCA 12204-P, et. al, 1993 BPD 28 (Jan. 28, 1993). Under the terms of the motion to dismiss, which we expressly declined to make a part of our order of dismissal, we note that the respondent was obliged to engage in another round of BAFOs, that the protesters, for the purposes of the agreement, are deemed prevailing parties in these protests, and that the respondent agrees that the protesters' "attorneys' fees and partial bid and proposal costs in a sum not to exceed $1.2 million for each protester may be recoverable under these protests." In particular, the parties agreed that: 11. NASA acknowledges that it failed to evaluate the offerors' proposals in accordance with NASA FAR Supplement 18-15.613-71(b)(5). NASA agrees that for the purposes of recovering protest costs, including any reasonable attorneys' fees and disbursements, protesters shall be deemed to have prevailed on the merits of this proceeding under 40 U.S.C. sect. 759(f)(5)(C). In compromise of the protesters' claims for protest costs and full bid and proposal costs, and in consideration of the foregoing provisions and the implementation of the revisions and actions specified herein, the parties agree that attorneys' fees and partial bid and proposal costs in a sum not to exceed $1.2 million for each protester may be recoverable under these protests. Protestors shall follow the procedures of Rules 35 and 36 of the Board's Rules of Procedure in seeking recovery of these costs. The record clearly demonstrates that the protester prevailed in its protest. The proposed award to another offeror was canceled and another round of offers received and evaluated. On February 26, 1993, Westinghouse filed a motion for award of its costs of filing and successfully pursuing its protest, which was docketed as GSBCA 12317-C(12208-P). This motion and its corresponding exhibits were stamped on each page with the protective seal. On March 11, 1993, Westinghouse, in response to this Board's directions, filed a substitute motion for the award of protest costs and proposal preparation costs, in which it withdrew the protective seal from every page of the motion except for those limited portions of the motions and exhibits containing Westinghouse proprietary information. That motion was supplemented on March 12, 1993 and again on April 15, 1993.[foot #] 1 On March 25, 1993, the respondent responded to the protester's motion, conceding that $257,164.15 in protest costs and $942,835.85 in proposal preparation costs were compensable under 40 U.S.C. 759(f)(5)(C). These costs total $1,200,000.00. In its response, the respondent further stated: Westinghouse has provided an estimate on a category-by- category basis of the proportion of its proposal preparation effort that was wasted. (Exhibits 1 and 5). After review of documentation provided by the company in support of its petition, the Agency also believes that the company has adequately established a nexus between the procurement violation and the wasted effort to the ceiling established in the Joint Stipulation. From the above, we conclude that the respondent clearly has conceded that wasted effort was incurred by the protester, and that this was a direct result of respondent's violation of law. In light of the fact that the respondent canceled the proposed award to another, it had no motive in agreeing to the amount of the costs of the protester's wasted effort. There can be no suspicion of "Fed Mail" in its agreement involving the protester's costs of wasted effort. We therefore conclude that ----------- FOOTNOTE BEGINS --------- [foot #] 1 We note that protester's April 15th supplement did not request additional funds and was merely provided as additional support for its original motion. ----------- FOOTNOTE ENDS ----------- the amounts involved are reimbursable. We consider Communications Technology Applications, Inc., GSBCA 10172-C(9978-P), 90-3 BCA 23,261, 1990 BPD 207, cited by the dissent, to be inapposite. In that case the Board had already found in our prior decision on the merits of the protest the facts necessary to reach a decision as to entitlement. In the instant case, we did not decide the merits of the original protest. In addition, in the instant case, further litigation would not adduce any evidence inconsistent with the result reached by the parties in their agreement because the parties agree as to all evidence which might be pertinent. Although NASA, in its response, moved that we award those costs, it further stated that "NASA recognizes a need for an audit of these costs, as to their incurrence, accounting and previous or pending Government reimbursements." In light of the respondent's reservation of the right to audit the amounts, we contacted the parties and suggested that issue be clarified. We noted that the parties do not appear to differ on the amounts due the successful protester. On October 25, 1993, we received a letter from respondent's counsel which states that: NASA, therefore, again moves the Board to award protest costs of $257,164.15 and proposal preparation costs of $942,835.85 to Westinghouse based on the documented costs presented in its cost petition. We have examined the detailed expenses and find them to be both reasonable and appropriately documented. Decision The protester's motion for attorney's fees and other costs associated with the pursuit of this protest together with a portion of the cost of the preparation of its proposal is GRANTED. The protester is awarded $1,200,000.00 as costs incurred in pursuing this protest and preparing its proposal. This award is to be paid, without interest, from the permanent indefinite judgment fund, 31 U.S.C. 1304 (1988); 40 U.S.C. 759(f)(5)(C) (1988). ______________________ JAMES W. HENDLEY Board Judge I concur: _________________________ STEPHEN M. DANIELS Board Judge VERGILIO, Board Judge, dissenting in part. I respectfully dissent from the conclusion of the majority that the protester is entitled to recover proposal preparation costs. The record in this case and the prior case law at this Board dictate a denial of the requested proposal preparation costs. To me, the record does not demonstrate that the changes to the solicitation were made because the existing clauses were improper or that efforts and expenses were wasted as a result of the underlying agency-acknowledged misevaluations and violations. Previously, the Board has denied a motion for the award of proposal preparation costs, stating: Although the respondent made substantive changes in the solicitation requirements, none of the subsequent amendments to the solicitation followed from the protest or were required by our decision. In fact, and more to the point, the protester had not protested any of the terms of the original solicitation. Consequently, our decision never dealt with the propriety of any of the solicitation terms. Our decision dealt solely with the actions taken by the respondent in evaluating and awarding the contract. The protester has not and can not point out any change in the solicitation requirements that resulted from our decision. It can not do so for the simple reason that neither the protest nor our decision dealt with the propriety of the terms of the solicitation. Communications Technology Applications, Inc., GSBCA 10172-C (9978-P), 90-3 BCA 23,261 at 116,700, 1990 BPD 207 at 5. The Board noted that it has "declined to award proposal costs to successful protesters because the agency lawfully changed its requirements." Id. The majority in the present case recites its analysis thusly: From the above, we conclude that the respondent clearly has conceded that wasted effort was incurred by the protester, and that this was a direct result of respondent's violation of law. In light of the fact that the respondent canceled the proposed award to another, it had no motive in agreeing to the amount of the costs of the protester's wasted effort. There can be no suspicion of "Fed Mail" in its agreement involving the protester's costs of wasted effort. We therefore conclude that the amounts involved are reimbursable. Majority opinion at 3-4. The changes to the terms of the solicitation described in the protester's justification of its request[foot #] 2 do not demonstrate to me that the costs were incurred because of agency violations and represent wasted effort. As noted in Communications Technology, an agency may legitimately alter its requirements during the course of a procurement. Every amendment does not entitle an offeror to recover some of its proposal preparation costs through the protest process at this Board. While an agency may choose to not object to the payment (through non-reimbursed funds) of the proposal preparation costs of potential contractors, the lack of objection cannot serve as the touchstone of this Board's determinations. The Brooks Act should not be read as legitimizing a wholesale shift in the costs of doing business with the Government. ______________________ JOSEPH A. VERGILIO Board Judge ----------- FOOTNOTE BEGINS --------- [foot #] 2 The Board has also described the solicitation amendments in findings of fact in a subsequent protest to this Board. Electronic Systems & Associates, Inc. v. ________________________________________ National Aeronautics & Space Administration, GSBCA 12494-P, 1993 ____________________________________________ BPD 207 (July 28, 1993).