GRANTED IN PART: March 10, 1995 GSBCA 10000-C-REM(9835-P) STERLING FEDERAL SYSTEMS, INC., Protester, v. NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, Respondent. Alan I. Saltman and Kevin R. Garden of Saltman & Stevens, P.C., Washington, DC, counsel for Protester. David P. Forbes and Sumara M. Thompson-King, Office of General Counsel, National Aeronautics and Space Administration, Washington, DC; and Rosamond M. French, NASA-Ames Research Center, Moffett Field, CA, counsel for Respondent. Before Board Judges DANIELS (Chairman), PARKER, and DeGRAFF. DANIELS, Board Judge. On March 6, 1989, the Board granted a protest brought by Sterling Federal Systems, Inc. (Sterling), against a procurement action taken by the National Aeronautics and Space Administration (NASA). NASA had determined to negotiate with only Computer Sciences Corporation (CSC) for the provision of automatic data processing support services to the NASA-Ames Research Center. We held that NASA's determination was in violation of law because the agency could not reasonably have concluded that CSC's proposal was the one most advantageous to the United States. Sterling succeeded through this protest in securing an additional opportunity to persuade NASA, through discussions and proposal revisions, that it should be selected for award. Sterling Federal Systems, Inc., GSBCA 9835-P (Mar. 6, 1989) (opinion issued subject to protective order; see 89-2 BCA 21,662, 1989 BPD 78). On April 5, 1989, Sterling moved, pursuant to 40 U.S.C. 759(f)(5)(C) (1988) and Board Rule 35, that the Board further award to the firm its costs of filing and pursuing the protest. 2 Thereupon began a long and tortuous history which has by now lasted nearly six years. Sterling asked the Board to reimburse costs it incurred for attorney fees, disbursements made by its counsel, consultant fees and expenses, and employee salaries and expenses. On December 23, 1992, the Board resolved the bulk of Sterling's request by awarding the protester $517,436.30. This sum covered attorney fees incurred in pursuit of the protest ($397,515.25) and in furtherance of the cost motion through September 15, 1992 ($49,044.50), counsel's disbursements in pursuit of the protest ($60,478.92) and the cost motion through September 15, 1992 ($3,668.96), and, for Sterling's consultant and employees who assisted in developing the case, witness fees at $30 per day and per diem allowances and travel expenses ($4,046). Sterling Federal Systems, Inc. v. National Aeronautics & Space Administration, GSBCA 10000-C(9835-P), 94-1 BCA 26,270, 1993 BPD 7 (1992). NASA moved for reconsideration of this decision; on March 23, 1993, the motion was denied. Sterling Federal Systems, Inc. v. National Aeronautics & Space Administration, GSBCA 10000-C-R(9835-P), 94-1 BCA 26,271, 1993 BPD 86. By June 4, 1993, both parties had filed certificates of finality as to this award. This decision, consequently, resolved all matters covered by the cost motion other than consultant fees and expenses and employee salaries and expenses. Those other matters have been the subject of protracted litigation. On May 22, 1992, the full Board, in a split decision, held that with the limited exception of witness fees and associated expenses, the Board lacks the authority to reimburse a party for consultant fees and expenses or employee salaries and expenses, even if those costs are reasonably incurred in pursuit of a protest. Sterling Federal Systems, Inc. v. National Aeronautics & Space Administration, GSBCA 10000-C(9835-P), 92-3 BCA 25,118, 1992 BPD 141. Sterling appealed this decision to the Court of Appeals for the Federal Circuit. On January 28, 1994, the Court vacated our decision and remanded the case to us for further action. Sterling Federal Systems, Inc. v. Goldin, 16 F.3d 1177 (Fed. Cir. 1994). Under instruction from the Court, the Board must now determine, consistent with the Court's opinion, Sterling's allowable costs of filing and pursuing its protest. Sterling Federal v. Goldin, 16 F.3d at 1189. Sterling continues to seek an award in the amount of $176,169.67.1 This sum consists of the following components: consultant fees and expenses, $94,024.51; employee salaries and expenses, $47,047.18; attorney ____________________ 1 This number does not appear anywhere in Sterling's submissions. It is the total of the latest components of protester's claim. 3 fees incurred in pursuit of the cost motion from September 16, 1992, through November 16, 1994 ($37,557.50); and disbursements made by counsel for the same purpose during the same time period ($1,556.48); less the amount previously awarded in witness fees and per diem allowances and travel expenses of witnesses ($4,016).2 Discussion I. The Board's authority to consider protests against agency procurements was established by Congress in the Brooks Automatic Data Processing Act, 40 U.S.C. 759 (1988). That Act provides that whenever the 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 filing and pursuing the protest, including reasonable attorney's fees." 40 U.S.C. 759(f)(5)(B), (C) (1988). The objective of the provision authorizing cost awards is to make each prevailing party whole "from pursuing its protest so long as the fees and costs it seeks to recover are reasonable." United States v. Compusearch Software Systems, 936 F.2d 564, 566 (Fed. Cir. 1991). Until the issuance of our decision in Sterling Federal Systems, Inc. v. National Aeronautics & Space Administration, GSBCA 10000-C(9835-P), 92-3 BCA 25,118, 1992 BPD 141, the Board regularly granted reimbursement of costs incurred for consultant fees and expenses, and for employee salaries and expenses, where we were convinced that the costs were both necessary for the pursuit of the protest and reasonable. See, e.g., as to consultant fees and expenses, Horizon Data Corp. v. Department of the Navy, GSBCA 11018-C(10831-P), 92-2 BCA 24,852, at 123,979-80, 1992 BPD 49, at 7; PRC Inc. v. Department of the Army, GSBCA 11428-C(11246-P), 92-2 BCA 24,777, 1992 BPD 40; Falcon Microsystems, Inc. v. Department of the Treasury, GSBCA 10782-C(10656-P)-REIN, 92-2 BCA 24,781, 1992 BPD 38; Centel Federal Systems, Inc. v. Department of the Army, GSBCA 11315-C (11238-P), 92-2 BCA 24,779, 1992 BPD 37; US Sprint Communications Co. Limited Partnership, GSBCA 10885-C(10684-P), 92-1 BCA 24,595, 1991 BPD 312; Computer Marketing Corp., GSBCA 8276-C(8131-P), 87-1 BCA 19,405, at 98,122, 1986 BPD 167, at 6; and as to employee salaries and expenses, National Capitol Systems, Inc. v. Department of the Navy, GSBCA 11019-C(10823-P), 92-2 BCA 24,851, at 123,974, 1992 BPD 50, at 4-5; Horizon Data Corp., 92-2 BCA at 123,980, 1992 BPD 49, ____________________ 2 Sterling misstates the last amount; the correct number is $4,046. 4 at 8; PRC; Centel; US Sprint; Berkshire Computer Products, GSBCA 10452-C(10338-P), 90-2 BCA 22,734, 1990 BPD 45; Rocky Mountain Trading Co. - Systems Div., GSBCA 9791-C(9712-P), 89-3 BCA 22,085, 1989 BPD 200; Severn Companies, Inc., GSBCA 9425-C(9344-P), 89-3 BCA 21,915, at 110,267, 1989 BPD 141, at 3; Locom Corp., GSBCA 9101-C(8951-P), 88-3 BCA 20,902, 1988 BPD 120; ISYX, GSBCA 9473-C(9407-P), 89-2 BCA 21,668, at 108,983, 1989 BPD 82, at 2; Rocky Mountain Trading Co., GSBCA 9054-C(8958-P), 88-3 BCA 20,939, 1988 BPD 131; Grammco Computer Sales, Inc., GSBCA 9049-C(8940-P), 88-2 BCA 20,691, 1988 BPD 57; Morton Management, Inc., GSBCA 8556-C(8419-P), 87-3 BCA 20,094, 1987 BPD 153; Genasys Corp., GSBCA 8841-C(8734-P), 87-2 BCA 19,726, 1987 BPD 46. In our 1992 Sterling decision, we considered the applicability of the Supreme Court's decision in West Virginia University Hospitals, Inc. v. Casey, 499 U.S. 83 (1991), to our inclusion of consultant and employee expenses within the term "costs of filing and pursuing the protest." The Court held there that the term "costs" in a cost-shifting statute refers to taxable costs described in 28 U.S.C. 1920, and that expert or consultant fees are not encompassed within that term and must be specified separately if they are to be reimbursable. We held that because these restrictions apply to Federal courts in their implementation of cost-shifting statutes, and "the fact that we are not a court may not be taken to mean that we may take actions that a court cannot," we were constrained by the Court's decision to reverse our longstanding practice. Sterling Federal v. NASA, GSBCA 10000-C (9835-P), 92-3 BCA 25,118, 1992 BPD 141. In its 1994 opinion, the Court of Appeals for the Federal Circuit rejected this reasoning and conclusion. Sterling Federal v. Goldin, 16 F.3d 1177. The appellate court held that the Brooks Act's reference to "costs of filing and pursuing the protest" is broad. This phrase, the Court of Appeals determined, is not limited by either 28 U.S.C. 1920 or the restrictions contained in the Equal Access to Justice Act, 5 U.S.C. 504. "Congress's use simply of 'costs' in the [Brooks Act], and failure to specify particular costs . . . , indicates that Congress intended a general allowance of litigation expenses in [that Act] over application of . . . a detailed list of costs." Id. at 1185. The Board's authority, the Court held, is not less than a court's in every aspect; "the most that can be said is that [it] is different." Id. at 1186. The Court concluded that the Brooks Act demonstrates, "by providing that the GSBCA may shift nonparticularized costs of litigation . . . , that Congress has entrusted the GSBCA with some discretion to define precisely what those costs are." Sterling Federal v. Goldin, 16 F.3d at 1187. In writing such a definition, the Court said, we are not required to follow past practice. "In view of [that] practice, however, to deny Sterling 5 the expert fees and employee salaries it seeks in this case, the GSBCA must either distinguish these costs from those awarded under previous cases or justify a change in practice." Id. at 1188. The Court provided this instruction: [T]he GSBCA, in determining the allowability of particular costs, should, as it has done in the past, analyze and weigh the relevant factors, including the reasonableness and relevance of such costs to "filing and pursuing the protest," the extent to which such costs have been and are awarded by agencies and courts under other cost-shifting statutes, the promotion of efficiency in the procurement process, and the like. Id. II. Whether any particular costs qualify for reimbursement under the Brooks Act's cost-shifting provision is primarily a matter for case-by-case analysis; the "reasonableness and relevance of such costs to 'filing and pursuing the protest'" depends on individual circumstances. In part III of this opinion, we apply this kind of analysis to the items for which Sterling continues to request an award. Considering those items in detail would be pointless, however, for categories of costs as to which we have determined that entitlement to reimbursement does not exist. Consequently, before examining particular items, we decide whether we should continue our prior practice of awarding consultant fees and expenses, and employee salaries and expenses, wherever these costs are necessary and reasonable. We begin our inquiry by looking to the purpose of the statute in question. As we explained many years ago, in language cited by the Court of Appeals, Congress enacted the legislation establishing the Board's protest review authority -- to encourage private enforcement of the laws and regulations mandating the acquisition of . . . automatic data processing equipment and services through full and open competition, and to open the "federal marketplace to all responsible computer companies." Computer Marketing Corp., 87-1 BCA at 98,120, 1986 BPD 167, at 4 (quoting H.R. Rep. No. 861, 98th Cong., 2d Sess. 1430 (1984)) (cited in Sterling Federal v. Goldin, 16 F.3d at 1187). Congress intended that enforcement of the requirement for an open, competitive marketplace would advance the goal of economy and efficiency in Government procurement. 40 U.S.C. 759(f)(5)(A) 6 (1988). The cost-shifting provision furthers this purpose by "reliev[ing] parties with valid claims of the [financial] burden of vindicating the public interests which Congress seeks to promote." Computer Marketing Corp., 87-1 BCA at 98,122, 1986 BPD 167, at 7 (cited at 16 F.3d 1188). Consistently, the Court of Appeals has said that we should apply the provision so as to make each prevailing party whole. United States v. Compusearch Software Systems, 936 F.2d at 566. The Brooks Act uses a very long sentence, from which we have previously quoted only a part, in authorizing the Board to make prevailing parties whole. The Court of Appeals for the Federal Circuit found in the structure of the sentence a "most persuasive indication that 'costs' does not mean those costs provided for in section 1920 [of title 18, United States Code]." Sterling Federal v. Goldin, 16 F.3d at 1185. The same analysis amply supports a further conclusion that the term "costs" does encompass consultant fees and expenses and employee salaries and expenses. The complete sentence says that whenever the Board finds a violation of law, 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. 40 U.S.C. 759(f)(5)(C) (1988). The Court noted that this sentence uses the word "costs" once; the clauses describing both categories are dependent on that single word. Because the whole of a statute should be considered in ascertaining the meaning of language therein, and language in any section of a statute should not be read so as to render other language in that section nonsensical, the word "costs" appearing once in the sentence must be given the same meaning insofar as it applies to both dependent clauses. Sterling Federal v. Goldin, 16 F.3d at 1185. The costs of bid and proposal preparation invariably represent the salaries and expenses of the company employees who are responsible for the firm's presentation to the Government, and sometimes also include the fees and expenses of consultants who are retained to assist the employees in that work. Because consultant and employee expenditures are costs as far as one part of the sentence is concerned, we see no reason why these expenditures should not be 7 considered legitimate costs as far as the other part is concerned as well.3 The Court of Appeals' decision also suggests another reason for concluding that in making parties whole, we should reimburse costs associated with work on a case by consultants and employees. The Court counsels that because we are dealing here with an issue of Government contract law, the way in which the Federal Acquisition Regulation (FAR), 48 CFR ch. 1, views the term "costs" may be enlightening to the issue at hand. Sterling Federal v. Goldin, 16 F.3d at 1184 n.11. This regulation "contains cost principles and procedures for (a) the pricing of contracts, subcontracts, and modifications to contracts and subcontracts whenever cost analysis is performed . . . and (b) the determination, negotiation, or allowance of costs when required by a contract clause." 48 CFR 31.000 (1993). With regard to "costs related to legal and other proceedings," the FAR says that the term "costs" includes "the costs of the services of accountants, consultants, or others retained by the contractor to assist it," and "costs of employees, officers, and directors," provided that each of these is incurred for and bears a direct relationship to a judicial or administrative proceeding. Id. at 31.205-47(a). The statute authorizing protests to this Board is a formalization of the court-made rule that the unfair consideration by an agency of a vendor's proposal is a breach of the Government's implied contract to consider all offers fairly. NCR Comten, Inc., GSBCA 8229(8091-P), 86-2 BCA 18,822, at 94,853, 1986 BPD 24, at 12 (Lieblich, B.J., dissenting in part) (citing Heyer Products Co. v. United States, 140 F. Supp. 409 (Ct. Cl. 1956)); cf. Parcel 49C Limited Partnership v. United States, 31 F.3d 1147, 1152 (Fed. Cir. 1994), CACI, Inc.-Federal v. United States, 719 F.2d 1567, 1572-75 (Fed. Cir. 1983) (both discussing derivation of authority of Court of Federal Claims to ____________________ 3 We are cognizant that another cost-shifting statute with which we have experience, the Equal Access to Justice Act (EAJA), 5 U.S.C.A. 504 (West Supp. 1994), has been interpreted to restrict recovery to money that was actually spent by a litigant; opportunity costs -- earning potential forgone in exchange for doing something else -- are not compensable under that law. American Power, Inc., GSBCA 10558-C(8752), 91-2 BCA _____________________ 23,766, at 119,048-49, and cases cited therein. The EAJA is distinguishable from the Brooks Act in two critical regards. First, the EAJA limits reimbursement to "expenses," whereas the Brooks Act uses the term "costs." The latter term, freed from its dependence on 18 U.S.C. 1920, may well be broader than the former. Second, the EAJA does not contain a sentence structured like the Brooks Act sentence discussed above. The EAJA does not include, as a sub-element of cost, a category such as "bid and proposal preparation" which clearly includes employee salaries and expenses and consultant fees and expenses. 8 hear protests involving Government procurements). Thus, the FAR cost principle for allowable legal "costs" for Government contracts carries considerable weight in determining the scope of the same term in the implied-contract context of bid protests.4 We asked the parties, in briefing the issue of allowability of the costs in question here, to direct us to other cost- shifting statutes, for the purpose of seeing how those laws have been applied to requests for reimbursement of the classes of costs in question. The only statute which either party noted is the one most closely allied to the Brooks Act in allowing cost- shifting -- 31 U.S.C. 3554(c)(1) (1988), which concerns protests filed with the Comptroller General regarding executive agency procurements. This statute was enacted in the Competition in Contracting Act of 1984 (CICA), title VII of Public Law 98-369, the same Act that established this Board's protest authority. The provision states: If the Comptroller General determines that a solicitation for a contract or a proposed award or the award of a contract does not comply with a statute or regulation, the Comptroller General may declare an appropriate interested party to be entitled to the costs of -- (A) filing and pursuing the protest, including reasonable attorneys' fees; and (B) bid and proposal preparation. The Comptroller General understands the term "the costs of filing and pursuing the protest," as used in this statute, to ____________________ 4 The theory expressed by Judge DeGraff in her separate opinion, that employee salaries may not ever be considered costs of filing and pursuing a protest because those salaries "would have been the same whether [a company] filed its protest or whether [it] never filed its protest," ignores the FAR's principle of allocability. Although a company can modify its employee costs over time in response to changing business conditions, at any particular point in time, every employee cost is incurred regardless of the actions a company takes. For purposes of business planning and pricing, firms routinely assign costs, including employee salaries, to appropriate cost objectives. "A cost is allocable if it is assignable or chargeable to one or more cost objectives on the basis of relative benefits received or other equitable relationship." FAR 31.201-4. A salary could be allocated to "filing and pursuing protest X" just as appropriately as it could be allocated to "manufacture of widget Y" or "maintenance of computer Z." 9 include the costs of fees and expenses of a protester's expert consultant, and the salaries and expenses of a protester's employees, which were reasonably and necessarily incurred in pursuit of a protest. National Test Pilot School, B-237503.4 91-2 CPD 488 (Nov. 25, 1991); Omni Analysis, 69 Comp. Gen. 433 (1990); Princeton Gamma-Tech, Inc., 68 Comp. Gen. 400 (1989), 89-1 CPD 401. Given the close similarity of the two statutes, the fact that the Comptroller General has ascribed to an identical term the same interpretation we have previously given it, lends support to our earlier allowance of such costs, to which we now return. Neither does it surprise us that the parties have not been able to point to any cost-shifting statutes other than the one relating to procurement protests to the Comptroller General. The interpretation of other statutes provides little insight into the unique provision of the Brooks Act and its CICA counterpart. As set out by the Supreme Court in West Virginia University Hospitals, 499 U.S. at 88-94, virtually every other cost-shifting statute either expressly authorizes award of expert (or consultant) fees or has been read by the Court as not authorizing them. Even a term which is clearly more extensive than "costs" -- "the cost of suit" -- may not be interpreted to include expert fees. 499 U.S. at 94. As the Court of Appeals held in Sterling Federal v. Goldin, however, neither the Supreme Court's decision nor 28 U.S.C. 1920 precludes award of these fees, or of the salaries and expenses of a protester's employees, as "the costs of filing and pursuing [a Brooks Act] protest." 16 F.3d at 1188. We add a note from our own experience as to the appropriateness of reimbursing expenditures associated with consultants and employees as an element of protest costs. Frequently, consultants and employees understand the technical issues of protest far more quickly and knowledgeably than lawyers do. Given the time constraints applicable to the protest process, 40 U.S.C. 759(f)(4)(B) (1988) (each protest to be decided within 45 working days after the date of filing), these consultants and employees often are required to help the lawyers get to the bottom of issues more economically and efficiently than the lawyers would if left to their own devices. The participation of these individuals thus frequently speeds protests to prompt and reasoned conclusion, frequently at less cost than would be incurred if protesters approached a case by devoting more attorney hours to the matter. The level of consultant and employee participation can often assist in making a protest less intrusive on the procurement process as a whole. We conclude, considering all of these factors, that our prior practice of allowing reimbursement of reasonable consultant fees and expenses, and employee salaries and expenses, in appropriate circumstances was a wise policy which should be continued. NASA has provided no persuasive, contrary argument; 10 its current objection to awarding costs to Sterling, as discussed below, centers on specific costs within the categories in question. III. A. We turn now to the particular items for which Sterling requests reimbursement. The history of this matter is curious. Immediately after Sterling filed its cost motion, in 1989, NASA not only opposed an award of any consultant or employee costs, but also contested the reasonableness of numerous particular costs that protester had claimed. Respondent's Opposition to Protester's Motion for Costs (May 2, 1989) (May 1989 Opposition); Response to Protester's Reply to Respondent's Opposition to Protester's Motion for Award of Costs (Sept. 16, 1989) (September 1989 Opposition). Then in 1991, NASA changed its position, telling the Board that it did not -- further dispute the reasonableness -- as that term connotes prudence in the commonly accepted business sense -- of Protester's incurred costs in this protest. Respondent disputes only Protester's legal entitlement to categories of costs not eligible for fee- shifting under West Virginia. Motion for Cancellation of Hearing (July 22, 1991) at 4. Three years later, shortly after the Court of Appeals issued its decision in Sterling Federal v. Goldin, NASA, consistent with its 1991 stance, stipulated to a judgment in favor of Sterling which encompassed all the amounts claimed for consultant and employee costs. Joint Stipulation for Entry of Judgment (Mar. 23, 1994); see also (as to accounting) Letter from Kevin R. Garden to Board (Mar. 29, 1994). The Board then issued an order explaining that the parties' stipulation is not self-effectuating; under the Brooks Act, costs may not be recovered unless the Board has independently determined that reimbursement is appropriate and has made an award. We asked the parties to submit further evidence and argument as to Sterling's entitlement to the costs at issue. Orders (Apr. 8 and 14, 1994). In response, NASA again reversed its position, arguing strenuously that the Board should not require the Government to reimburse Sterling for any of the costs. According to the agency, the procurement and the proposals were so simple that an educated layman (and even a lawyer!) could understand them without need for any expert assistance; Sterling's consultant was not an expert in any relevant field; and his fees were unreasonably high. Additionally, the agency maintained, Sterling's employee costs 11 have already been paid by the Government under other Government contracts, and in any event, if any such costs are to be compensable under the Brooks Act, only out-of-pocket employee expenses should qualify. Respondent's Response to Sterling's Brief (May 18, 1994) at 5-17. Sterling contends that in light of the statements made by NASA in 1991 and March 1994, "NASA is estopped to deny the reasonableness of Sterling's costs." Protester's Reply Brief (May 27, 1994) at 5. There are two problems with this proposition. First, although an agency's position may be helpful to the Board in resolving applications for cost reimbursement, it can never be viewed as an admission on the basis of which the case may be resolved. Under the Brooks Act, the duty of deciding whether to grant a cost motion is the Board's alone (subject to review on appeal). "The fact that respondent has no objection to the amounts claimed does not relieve us of the responsibility to examine claims carefully on our own." Berkshire Computer Products, 90-2 BCA at 114,124, 1990 BPD 45, at 2 (citing Gallegos Research Group Corp., GSBCA 10125-C(9983-P), 90-1 BCA 22,609, 1990 BPD 21; and Systemhouse Federal Systems, Inc., GSBCA 9446-C(9313-P), 89-2 BCA 21,773, 1989 BPD 118). Thus, NASA's change of position does not cause us to vary our approach to the case.5 Second, Sterling has not proven a critical element of estoppel, that the party advancing the theory actually relied to its detriment on a commitment made by the other party. See State Street Management Corp. v. General Services Administration, GSBCA 12374, 94-1 BCA 26,500, at 131,908 (citing USA Petroleum Corp. v. United States, 821 F.2d 622, 625 (Fed. Cir. 1987), and American Electronic Laboratories, Inc. v. United States, 774 F.2d 1110, 1113 (Fed. Cir. 1985)). Sterling attempts to meet this standard by suggesting that if NASA had not made its earlier statements, Sterling would have made a much greater effort to present evidence as to the necessity and reasonability of its consultant and employee costs. Under the Board's Rules, however, Sterling was obliged to present its evidence along with its motion. Rule 35(b) (48 CFR 6101.35(b) (1988)) (in effect when motion was filed); Rule 35(c)(3) (58 Fed. Reg. 69,246, 69,264 (Dec. 30, 1993) (to be codified at 48 CFR 6101.35(c)(3)) (current version). Furthermore, Sterling has supplemented its motion on several occasions, most prominently on December 17, 1990, when it filed a several-inches-thick response to NASA's motion to compel the production of documents supporting the claim. If Sterling ____________________ 5 Curiously, in a letter dated December 2, 1994, NASA reversed course yet again, telling the Board that it "takes no exception to the amended in-house labor costs being requested." This change of heart, like the others, does not affect our independent review of the cost application. 12 had any evidence critical to its request for costs, it should have provided that evidence well before NASA first stated its view that the claimed costs are reasonable. Additionally, Sterling's supplementation of the record with still more evidence subsequent to NASA's change of position, and the Board's consideration of that information in deciding this case, have had a curative effect on any problems that the modification might have presented. B. Sterling asks that we award it reimbursement of consultant fees and expenses, employee salaries and expenses, and attorney fees and disbursements. We examine each of these groups in turn. In doing so, we review the concerns raised by NASA, many of which pose the precise questions we have ourselves and would have discussed whether the agency had mentioned them or not. We first examine the claimed costs of retaining a consultant for assistance in pursuing the protest. Sterling's counsel employed, as a consultant in this case, Paul Connolly, a retired president of Sterling. Sterling's payments to Mr. Connolly fall into three categories: payment for services, at $1,500 per day; payment for signing an agreement not to compete against the intervenor, $25,000; and reimbursement for transportation and other travel expenses, $10,524.51. NASA contends first that no consultant services were required for Sterling to pursue the protest. We reject this contention. The issues involved in the case required a careful examination of the proposals submitted by both Sterling and CSC, and of NASA's evaluation of both proposals. Because some of the material was proprietary and other was source-selection- sensitive, the Board issued a protective order which precluded Sterling and CSC employees from access to the most important evidence. Sterling then had to decide whether to proceed on the basis of just its lawyers' review of the information, or whether the assistance of an expert was necessary for a truly informed analysis and presentation of the case. Sterling opted for the latter. Although no member of the panel of judges which is resolving the cost motion was personally involved in deciding the underlying protest (the three judges on that panel are no longer members of the Board), our review of the decision in that case makes evident that the proposals, evaluations, and issues were sufficiently complex that even a skilled Government contracts lawyer would need assistance in understanding them. The determination to hire a consultant was therefore both necessary and reasonable. NASA next asserts that Mr. Connolly was not an expert at all and that his services were not needed by Sterling's counsel. Sterling's arguments to the contrary are convincing. Because Mr. Connolly had prepared cost proposals on prior procurements for 13 the work involved in the protested procurement, and was familiar with all phases of the technical work required on the contract, he had a detailed understanding of the matters at issue in the case. Protester's Reply to Opposition (June 27, 1989) at 58. The consultant was intensively involved in the development of Sterling's case; he reviewed all materials produced in discovery, made an exhaustive examination of the protest file, discovered key facts relative to NASA's analysis of the intervenor's cost proposal, and discovered that NASA had made unjustified assumptions regarding the intervenor's labor rates and qualifications of that offeror's proposed staff. Id. at 59 and at page 35 of Appendix thereto (Affidavit of Alan I. Saltman 29); see also Declaration of Alan I. Saltman (Apr. 29, 1994) (attachment to Protester's Brief (Apr. 29, 1994)). We also reject NASA's suggestion that the daily fee was excessive. Sterling's counsel affirmed that the fee "was reasonable and consistent with what the affiant understands to be the fees customarily charged by individuals possessing Mr. Connolly's expertise and ability. The affiant makes this statement based on his years of experience as a litigating attorney. Protester's Reply to Opposition (June 27, 1989) at page 35 of Appendix thereto (Affidavit of Alan I. Saltman 30). Mr. Connolly's bills show that he worked very long days on this protest -- generally as many as 12 to 14 hours per day. Motion for Award of Protest Costs (Apr. 5, 1989), Exhibit 1. $1,500 is not an excessive charge for the services of an individual of his experience and knowledge, given the number of hours he worked. We do accept three of NASA's thoughts as to deductions from the total amount claimed for the consultant's services, however. First, Mr. Connolly billed for assistance not only during the development of the case and the hearing, but also for the eight days while posthearing briefs were being written. Motion for Award of Protest Costs (Apr. 5, 1989), Exhibit 1. Sterling maintains that the consultant provided critical help in the writing of the brief. Protester's Reply to Opposition (June 27, 1989) at 61, and at pages 35-36 of Appendix thereto (Affidavit of Alan I. Saltman 31). We can imagine that attorneys writing a brief might have occasions to ask a consultant for help on an abstruse point in brief-writing, and might benefit from a consultant's review of the brief's treatment of technical matters. Generally, however, we expect that by the time a hearing is over, the issues are sufficiently developed that the attorneys would understand them and the relevance of particular evidence to them, that briefs could be written by counsel alone. While the consultant's extensive help on this part of the case might have been useful, it was not necessary. We allow the costs of one day of consulting, as an approximation of the time required for occasional help, during the writing of posthearing briefs. We deduct as excessive Mr. Connolly's charges for seven days of consulting during that activity -- $10,500. 14 Second, in exchange for NASA and CSC agreeing not to object to Mr. Connolly's request for access to protected material, the consultant signed an agreement not to compete with CSC for a period of two years. Protester's Reply to Opposition (June 27, 1989) at 17. After signing the agreement, Mr. Connolly expressed displeasure at being bound by it. Sterling agreed to pay an additional $25,000 to the consultant, providing that the agreement remained in effect, which it did. Id. at 18 and at pages 9 (Affidavit of Geno P. Tolari 6, 7) and 49-50 (Affidavit of Paul Connolly 4) of Appendix thereto. This extra payment was not directly related to the services provided; indeed, having been established after Sterling and Mr. Connolly had concurred that $1,500 per day was the appropriate price for those services, the additional $25,000 can only be understood as for something entirely different from the services. Although it may have been essential to keep Mr. Connolly from abandoning his work, we do not deem it reasonable or necessary for the services as to the protest. Third, some of the travel costs that Mr. Connolly incurred appear to have been unnecessary to the case. While the protest was in its discovery phase, the consultant traveled round-trip from Washington, D.C. (where Sterling's counsel was located), to San Francisco, California (corporate headquarters), with a stopover each way at his home in Sun Valley, Idaho. Our best reckoning, based on the information provided, is that the additional cost of airfare due to the stopover was $866. We deduct this amount as having been spent for the consultant's personal convenience, rather than in pursuit of the protest. Additionally, because we are not convinced that the consultant's services were necessary in writing the posthearing brief, we deduct the cost of expenses incurred by Mr. Connolly while in Washington during that phase of the case -- $1,833.29. See Motion for Award of Protest Costs (Apr. 5, 1989), Exhibit 1. The total sought for consultant fees and expenses is $94,024.51. The total we allow is $55,825.22. C. NASA's principal objection to Sterling's request for reimbursement of employee salaries and expenses is that the Government has already paid these costs in another form, so any award would amount to a windfall for the protester. The agency notes that all of Sterling's work, at the time of the protest, was for the Federal Government. Respondent's Opposition to Protester's Motion for Costs (May 2, 1989), Exhibit A. NASA asserts that except for one individual (for whose time Sterling limits its claim to an amount which has already been compensated through the earlier award of witness fees), the salaries of all the Sterling employees who spent time on the case are indirect costs, charged as general and administrative (G&A) costs against existing contracts. The travel costs of these individuals, NASA says, are also G&A costs. The agency maintains that the Board 15 should therefore deny payment of the costs here. Respondent's Opposition at 8. Sterling responds by explaining that at the outset of the protest, the company established a separate cost center to which each employee who worked in connection with the protest charged his or her time. "These hours were not charged to any other contract nor was Sterling Federal compensated for these hours under any other contract. Furthermore, because they were not directly charged, or charged in any manner to any other contract, these hours did not serve as a direct cost pool from which G&A or overhead costs were computed on any other government contract." Protester's Reply to Opposition (June 27, 1989), at pages 20-21 of Appendix thereto (Affidavit of William Dwyer, Sterling's vice president for corporate finance, 2); see also Declaration of Suellen Johnson, Sterling's controller (May 23, 1994) (attachment to Protester's Reply Brief (May 27, 1994) 3, 4). Sterling's explanation persuades us that the claimed employee salaries and expenses should not be deemed per se unallowable. NASA's theory is predicated on facts not in evidence -- that Sterling has included the claimed hours in an indirect cost pool which was used as the basis for a G&A markup that the Government has paid on various contracts; that Sterling's contracts with the Government are all of a cost- reimbursement nature; and that removing the claimed hours from the company's G&A pool will have no effect on future G&A rates. See Response to Protester's Reply to Respondent's Opposition to Protester's Motion for Award of Costs (Sept. 16, 1989) at 4. Without proof of any of these "facts," we have no reason to doubt Sterling's affirmations that the hours in question were charged to only one cost objective, pursuit of the protest, and will not be charged again to the Government through improper accounting techniques. NASA's second objection to the claim for employee salaries and expenses strikes a responsive chord in us, however -- the amount of the claim is excessive. Unlike the claims for attorney and consultant fees and expenses, which are well organized and documented, Sterling's request for reimbursement of employee costs is buttressed only by statements of total amounts attributable to each of various individuals and a mass of disorganized copies of timesheets and receipts, many of which are illegible. From among the papers Sterling has sent us in support of this claim, we are able to find documentation for no more than $38,520.59 -- $33,588.50 in burdened salaries and $4,932.09 in out-of-pocket costs for transportation, meals, lodging, and miscellaneous items. A certification by Sterling's controller that the costs claimed were actually incurred (Motion for Award of Costs (Apr. 5, 1989), Exhibit 3) is insufficient to overcome the debility of an absence of documentation. Thus, even if we were persuaded that all the claimed employee salary and expense 16 costs had been appropriately incurred, we could award no more than $38,520.59. We do not believe that all the costs were reasonable and necessary for the pursuit of the protest, however. Sterling has asked that we award costs for 355 hours devoted to the case by three top executives of the company. The protester's assertion that the executives assisted counsel in the preparation of the case, particularly in understanding complex cost issues and in responding to four sets of interrogatories and four sets of requests for the production of documents, is credible. See Protester's Reply to Opposition (June 27, 1989) at 14-15. That all the time claimed for the entire case was necessary is dubious, however. The key issues of protest involved evaluations of the various proposals submitted, and the evidence and analysis regarding those evaluations was under protective order and consequently unavailable to Sterling's executives. The protester hired Mr. Connolly, its consultant, to act in lieu of its own personnel in assisting counsel on these matters. For the same reasons that the charges for the consultant are reasonable, the claim for employee salaries and expenses is not. Determining the necessity of each hour and expense claimed by Sterling for its employees' involvement in the protest would be impracticable. In our judgment, no more than $15,000 of the $47,047.18 in costs claimed in this category were appropriately incurred in filing and pursuing the protest. We award that amount. D. The Board has already awarded $4,046 in witness fees, per diem allowances, and travel expenses, for the consultant and Sterling employees. Sterling Federal Systems, Inc. v. National Aeronautics & Space Administration, GSBCA 10000-C(9835-P), 94-1 BCA 26,270, 1993 BPD 7 (1992). To ensure that Sterling is not compensated twice for the same costs, this amount must be deducted from the award we make today. In so deciding, we clarify our rule regarding the relationship between incurred costs and witness fees. Initially, "we disallow[ed], as costs of filing and pursuing a protest, personnel costs for salaried employees who appeared as witnesses;" instead, we allowed reimbursement of witness fees for those individuals. Computer Marketing Corp., 87-1 BCA at 98,122, 1986 BPD 167, at 7. Later, we said that this rule applied only to the days on which an employee testifies; for all other time that such an individual devoted to pursuit of a protest, we authorized reimbursement of the costs associated with his or her salary. Grammco, 88-2 BCA at 104,581, 1988 BPD 57, at 2; MBI Business Centers, Inc., GSBCA 8560-C(8427-P), 87-2 BCA 19,702, at 99,750, 1987 BPD 37, at 4. Most recently, we held that even on days when an employee testifies, because the protester incurs salary costs for the employee's time, but does not pay the 17 individual a witness fee, reimbursement of the salary but not the fee is appropriate. National Capitol Systems, 92-2 BCA at 123,974, 1992 BPD 50, at 5. We hold now that the last rule is the most faithful application of the statute; we will follow this practice in the future. E. The final element of Sterling's request for an award of costs is for attorney fees incurred in pursuit of the cost motion from September 16, 1992, through May 26, 1994 ($37,557.50), and disbursements made by counsel for the same purpose during the same time period ($1,556.48). The "costs of filing and pursuing a protest" include the necessary and reasonable costs incurred in filing and pursuing an application for recovery of protest costs. Compusearch Software Systems, GSBCA 10483-C(10329-P), 90-2 BCA 22,912, at 115,031, 1990 BPD 94, at 9-10, aff'd sub nom. United States v. Compusearch Software Systems, 936 F.2d 564 (Fed. Cir. 1991) (citing Digital Equipment Corp., GSBCA 9285-C(9131-P), 89-3 BCA 22,181, 1989 BPD 248; React Corp., GSBCA 9530-C(9456-P), 88-3 BCA 21,026, 1988 BPD 161; and Computervision Corp., GSBCA 8864-C(8744-P), 1988 BPD 128, at 3 (June 22, 1988)). We find that the claimed costs were appropriately incurred, given the occasional requirement for attention to the case during its long pendency here and the need for briefing which followed the Court of Appeals' direction that we revisit the merit of awarding consultant and employee costs. The amounts are properly documented. F. In summary, we find that Sterling necessarily and reasonably incurred the following costs in filing and pursuing this protest: Category of costs Requested Awarded Consultant fees and expenses $ 94,024.51 $ 55,825.22 Employee salaries and expenses 47,047.18 $ 15,000.00 Witness fees previously awarded ( 4,016.00) ( 4,046.00) Attorney fees and disbursements 39,113.98 39,113.98 Total $176,169.67 $105,893.20 Decision We GRANT IN PART Sterling's motion and award to this firm the sum of $105,893.20, which reflects all amounts, exclusive of costs previously awarded, which Sterling necessarily and reasonably incurred in filing and pursuing the protest. This sum 18 shall 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). _________________________ STEPHEN M. DANIELS Board Judge I concur: _________________________ ROBERT W. PARKER Board Judge DeGRAFF, Board Judge, concurring in part and dissenting in part. I agree with the majority's decision, with one exception: I do not agree that Sterling should recover the costs of its employees' salaries. In concluding that Sterling should recover its employees' salaries, the majority relies upon (1) its conclusion that 40 U.S.C. 759(f)(5)(C)(i) must include such costs because 40 U.S.C. 759(f)(5)(C)(ii) includes such costs, (2) a provision of the Federal Acquisition Regulation (FAR), (3) the practice of the Comptroller General, and (4) its belief that time spent by employees is at least as efficient as time spent by attorneys. I am not persuaded by the majority's analysis, for the following reasons. In Sterling Federal Systems, Inc. v. Goldin, 16 F.3d 1177 (Fed. Cir. 1994), the Court of Appeals considered 40 U.S.C. 759(f)(5)(C)(i) and (ii) when it analyzed the Government's argument concerning 28 U.S.C. 1920. In deciding that section 1920 does not define the costs which we may award pursuant to subsection (i), the Court relied in part upon the fact that subsection (ii), which permits us to award the costs of bid and proposal preparation, is nonsensical if it is subject to the definition of costs contained in section 1920. The issue of whether subsection (i) must include the same costs as does subsection (ii) was not presented to the Court of Appeals. For this reason, the Court did not hold that the costs of bid and proposal preparation must always be the same as the costs of 19 filing and pursuing a protest. I know of no reason why, as the majority states, the costs of employee salaries must be part of the costs of filing and pursuing a protest because they are included as part of the costs of bid and proposal preparation. Given that subsections (i) and (ii) have very different legal underpinnings, there may be good reasons why employee salaries are part of bid and proposal preparation costs and not part of the cost of filing and pursuing a protest. I see no reason to address this issue in this case because the question with which we are presented is far narrower and, in my view, easily resolved by a plain reading of subsection (i). I would leave any decision concerning the proper boundaries of subsection (ii) to a case where that issue is before us. Part 31 of the FAR contains cost principles to be used by agencies and contractors when pricing contracts and modifications to contracts. FAR 31.205-47 explains that employee costs which are directly related to a judicial or administrative proceeding are generally unallowable, except in certain defined circumstances not relevant here. This FAR provision does not provide any guidance concerning whether the employee salaries sought by Sterling are the costs of filing and pursuing a protest. Rules concerning allocability are similarly unhelpful in deciding whether to award the costs sought by Sterling. The method a company uses to allocate its costs is not dispositive of whether those costs are the costs of filing and pursuing a protest. In National Test Pilot School, Omni Analysis, and Princeton Gamma-Tech, the Comptroller General simply decided, without engaging in any discussion or revealing any rationale, that the protesters were entitled to recover their employee salaries. I have not been able to find any decision that contains any suggestion as to why the Comptroller General believes such a recovery is either advisable or consistent with statute. I am not willing to rely upon the Comptroller General's decisions because they lack any reasoned basis. Much the same as some pro se litigants, employees of parties can devote considerable amounts of time to addressing points which are irrelevant to the ultimate disposition of a case. Whether a particular employee's participation in a case has achieved any savings is impossible to quantify and, more important, is irrelevant to the issue of whether the employee's salary is part of the costs of filing and pursuing a protest. I would not award Sterling the costs of its employees' salaries because such an award is not consistent with the plain language of the statute. The statute provides for an award of the costs of "filing and pursuing" a protest. The employee costs that Sterling incurred are not the costs of filing and pursuing its protest. Rather, they are the costs of hiring employees and 20 agreeing to pay the employees' salaries. Unlike the costs of the expert that it hired, Sterling's employee salary costs would have been the same whether Sterling filed its protest or whether Sterling never filed its protest. Costs which would have been incurred regardless of a protest having been filed are not costs of filing and pursuing a protest. In the past, we have awarded employee salaries as costs of filing and pursuing a protest and the Court of Appeals stated that we should distinguish our prior holdings or justify a change in practice if we wish to deny Sterling's cost application. 16 F.3d 1188. There are two reasons for deviating from our prior decisions. First, our decisions, like the Comptroller General's decisions, simply awarded employee salaries without ever considering whether there was a legal basis for doing so. Thus, our prior decisions are precedent, but not persuasive precedent. Second, an award to Sterling would not be consistent with the statute. For these reasons, I have no reservations about changing our practice. ____________________________ MARTHA H. DeGRAFF Board Judge