GRANTED IN PART: August 5, 1993 GSBCA 11893-C(11734-P) RMTC SYSTEMS, INC., Protester, v. NUCLEAR REGULATORY COMMISSION, Respondent. Michael D. Hays and Stephen C. Crampton of Dow, Lohnes & Albertson, Washington, DC, counsel for Protester. Dennis C. Dambly, Catherine M. Holzle, and Brian T. Kildee, Office of General Counsel, Nuclear Regulatory Commission, Rockville, MD, counsel for Respondent. Before Board Judges LABELLA, HYATT, and WILLIAMS. HYATT, Board Judge. Pursuant to Rule 35, protester, RMTC Systems, Inc. (RMTC), filed a timely motion for the recovery of its costs of pursuing the underlying protest. RMTC seeks an award of protest costs in the amount of $30,062.92 and bid preparation costs of $3,442.50. Respondent, the Nuclear Regulatory Commission (NRC), has opposed the application, arguing it should be denied altogether or, alternatively, that the amount should be substantially reduced to reflect the limited success achieved by RMTC. For the reasons stated, we grant the application, but reduce the amount of the award claimed. Background RMTC protested the terms of an invitation for bids (IFB), number RS-IRM-92-201, issued by NRC for the acquisition of modems and associated automatic data processing equipment. Protester initially alleged that the IFB's specifications were unnecessarily restrictive because they precluded all equipment except that of a brand name vendor and overstated the agency's needs. Protester subsequently amended its protest, adding that certain specifications stated in the IFB were ambiguous. RMTC Systems, Inc. v. Nuclear Regulatory Commission, GSBCA 11734-P, 92-3 BCA 25,133, 1992 BPD 137. Protester did not submit a bid in response to the solicitation, which was protested prior to the closing date. After RMTC filed its protest, the procurement was promptly suspended. Protester's Reply to Respondent's Opposition to Protester's Motion for Costs at 19-20. In ruling on the merits of the protest, the Board rejected protester's arguments that the solicitation was ambiguous and that it overstated the agency's needs. Nonetheless, the protest was granted in part, because the Board found that the preponderance of the evidence supported the conclusion that the Microcom modem might well be the only responsive modem that could be offered in light of the particular combination of features stated by respondent to be mandatory. We granted the protest to this extent and directed the agency to ascertain whether there was in fact more than one product that met all of its stated requirements with respect to each item to be acquired. If there was not, the agency could either seek the appropriate authorization to proceed sole source, relax the specifications so as to permit adequate competition, or proceed in any other manner that accorded with applicable statute and regulations. RMTC Systems, 92-3 BCA at 125,208, 1992 BPD 137, at 16. In accordance with the Board's decision, respondent conducted a survey of firms that had submitted bids in response to the IFB. Respondent was unable to identify any modems satisfying all of the solicitation requirements other than the brand name modem, Microcom. Respondent decided, therefore, to review its needs and determine how best to proceed with the procurement. Respondent's Opposition to Award of Costs at 7 n.1. The protest was initially pursued by protester's president, who is not an attorney. A few weeks prior to the date when record submissions were due, RMTC retained counsel. In its application, RMTC documented $30,062.92 incurred in pursuing the protest. This amount included $16,485 in legal fees billed by RMTC's lawyers, $1,674.26 in disbursements made by counsel, and $11,903.70 in costs incurred directly by RMTC in pursuing the protest. Of the costs incurred directly by RMTC, $11,353.50 is attributable to the time spent by protester's president in pursuing the protest. The remainder is attributable to time spent on the protest by other RMTC employees and out-of-pocket disbursements by the company. Shortly after filing the initial application, protester supplemented its request for an award of attorney fees to include an additional $3,442.50, representing the cost of preparing its bid. This request followed respondent's cancellation of the IFB, which occurred after NRC actually determined that no modem other than Microcom's would satisfy the stated specifications. Discussion Under the Brooks Act, when an agency has violated statute, regulation, or the conditions of a delegation of procurement authority, the Board may grant an "appropriate interested party" the costs of "filing and pursuing the protest, including reasonable attorney's fees, and . . . bid and proposal preparation." 40 U.S.C. 759(f)(5)(C) (1988). An "appropriate interested party" has been defined as a "prevailing party" or "one that has succeeded on any significant issue in the litigation that achieves some of the benefit it sought in bringing suit." Bedford Computer Corp., GSBCA 9837-C(9742-P), 89-2 BCA 21,827, at 109,811, 1989 BPD 121, at 3; see also Julie Research Laboratories, Inc., GSBCA 9693-C (9474-P), 91-1 BCA 23,389, 1990 BPD 345. Here, the protester was a "prevailing party," but only on the issue of whether the solicitation was so restrictive as to c o n s t i t u t e a d e f a c t o s o l e s o u r c e procurement.[foot #] 1 Where there are claims that are "distinct in all respects from [the] successful claims, the hours spent on [the] unsuccessful claim[s] should be excluded in considering the amount of a reasonable fee." Hensley v. Eckerhart, 461 U.S. 424, 440 (1983)(quoted in Julie Research Laboratories, 91-1 BCA at 117,375, 1990 BPD 345, at 3); see also Storage Technology Corp., GSBCA 9939-C(9793-P), 91-3 BCA 23,041, 1990 BPD 150; Digital Equipment Corp., GSBCA No. 9285-C(9131-P), 89-3 BCA 22,181, 1989 BPD 248. Thus, when a protest is granted only in part, we will, in appropriate circumstances, attempt to distinguish between the work done for the successful and unsuccessful counts and limit the recovery of fees to those aspects of protester's claim for which it obtained at least some relief. We deem this case to be one in which the unsuccessful claims, concerning ambiguities in the specifications, are readily segregable from the issue on which protester ultimately prevailed and will, therefore, limit the grant of fees to those associated ----------- FOOTNOTE BEGINS --------- [foot #] 1 Respondent argues that the protester did not fully or sufficiently prevail on any issue and, therefore, does not qualify for an award of any protest costs. We find this argument unconvincing because protester's efforts in fact persuaded us that there was a strong likelihood that the IFB improperly restricted competition to one product, causing us to find that the agency needed to perform a market survey and proceed based on its findings and its actual needs. The agency subsequently found that the IFB did, in fact, exclude all but the particular Microcom modem referenced in the IFB. Our decision justifies an award of costs to protester for its successful efforts on this issue. ----------- FOOTNOTE ENDS ----------- with the de facto sole source procurement issue and with general matters concerning the overall case in order to fashion an award that relates reasonably to the success achieved. Attorney Fees Protester has claimed $16,485 in attorney fees attributable to the efforts of outside counsel. The firm retained by protester has documented that hours expended on the protest totalled 127.7. An hourly rate for the three attorneys who worked on the case was not initially provided, but the average hourly rate over the 127.7 hours claimed was $129.10.[foot #] 2 This is reasonable overall.[foot #] 3 We consider it appropriate to allow costs for the hours claimed by counsel to the extent the costs relate to general preparatory matters, the successful arguments supporting the de facto sole source procurement argument, and the motion for costs. These amount to 90.7 hours, or $11,709.37.[foot #] 4 We also grant $1,674.26 in disbursements made by outside counsel and $483.58 in disbursements expended by RMTC, which we find to be adequately documented as well. The award excludes recovery of 37 hours (or $4,776.70) of attorney fees reflecting time devoted by RMTC's attorneys to preparing an opposition and supplemental opposition to NRC's ----------- FOOTNOTE BEGINS --------- [foot #] 2 In response to NRC's objections, counsel subsequently indicated the hourly rates charged by the attorneys who worked on the protest and confirmed that these are the rates customarily charged to RMTC and other clients. These individual rates are reasonable and the documentation is sufficient to support the application. See General Technology Inc. v. Defense ___ __________________________________ Communications Agency, GSBCA 11216-C(11117-P), 92-2 BCA 24,890, _____________________ 1992 BCA 65. [foot #] 3 Cf. Grumman Data Systems Corp. v. Department of __ ___________________________________________ the Air Force, GSBCA 11799-C(11635-P), 1993 BPD 16 (Jan. 11, ______________ 1993) (Board found that the $215 per hour unitary rate charged by protester's counsel was permissible); SMS Data Products Group, _________________________ Inc. v. Department of the Treasury, GSBCA 10783-C(10644-P)-REIN, ___________________________________ 93-1 BCA 25,427, 1992 BPD 238 (Board recognized that the rates prevailing in Washington, D.C. at the time of the protest were over $250 per hour). [foot #] 4 We include in the award attorney fees in full for time spent on protester's brief in support of its record submission because the lion's share of that brief is devoted to argument concerning the de facto sole source procurement issue as opposed to the ambiguities perceived in the solicitation. ----------- FOOTNOTE ENDS ----------- motion to strike.[foot #] 5 These fees are excluded even though respondent's motion to strike was denied by the Board. RMTC Systems, Inc. v. Nuclear Regulatory Commission, GSBCA 11734-P, 92-3 BCA 25,034, 1992 BPD 114. Protester's success in defending against this motion achieved nothing other than to allow protester to proceed with its added counts concerning specification ambiguities, issues which it ultimately lost. The Board does not generally award fees for successful defense of motions when the result is merely to set the stage for further litigation of an ultimately unsuccessful issue. See Racal Information Systems, Inc., GSBCA 10435-C (10264-P), et al., 91-1 BCA 23,468, 1990 BPD 360; Computervision Corp., GSBCA 8838-C(8709-P), 87-2 BCA 19,818, 1987 BPD 70. We next examine protester's claim for $11,420 in in-house labor expenses expended by RMTC in pursuing the protest, the bulk of which is attributable to the work of protester's president. Although this individual's pro se representation of RMTC at the outset of the protest pinpointed the ultimately successful issue, it is nonetheless now established, in a decision issued by the full Board, that protest costs attributable to efforts of in- house nonlegal personnel are not recoverable under the Brooks Act's fee-shifting provision. Sterling Federal Systems, Inc. v. National Aeronautics & Space Administration, GSBCA 10000-C(9835- P), 92-3 BCA 25,118, 1992 BPD 141, appeal docketed, No. 92- 1552 (Fed. Cir. Sept. 28, 1992); see also Old Stone Leasing Corp. v. Department of the Army, GSBCA 10747-C(10613-P), 93-2 BCA 25,607, 1992 BPD 331; Rocky Mountain Trading Co. v. Department of the Army, GSBCA 11033-C(10879-P), 1993 BPD 20 (Jan. 14, 1993). Protester makes the novel, but unpersuasive, argument that the extensive experience of RMTC's president in pursuing protests before the Board makes him comparable to an attorney for purposes of awarding attorney's fees. Notwithstanding this individual's considerable experience in pursuing protests at this Board, the record does not reflect that he is a member of any bar and the statute simply does not authorize us to compensate protester for the time he has spent pursuing the protest. The in-house personnel costs of RMTC's other employees are similarly not ----------- FOOTNOTE BEGINS --------- [foot #] 5 On April 8, 1992, protester's attorneys billed 10.20 hours collectively for general background work on the case, drafting the brief supporting RMTC's record submission, which was successful, and drafting and filing an opposition to NRC's motion to strike, which was unsuccessful. Protester did not separate these time records. As we have said before, "counsel risks a lower award than otherwise might be justified if it had segregated its efforts according to the issues presented." Wang ____ Laboratories, Inc., GSBCA 9288-C(9131-P), 89-3 BCA 22,180, at ___________________ 111,612, 1989 BPD 249, at 6. With no clear guidance from protester, we award 6.8 hours, or two-thirds, of that day's billings. ----------- FOOTNOTE ENDS ----------- recoverable. Rocky Mountain Trading Co., 1993 BPD 20. Protester's claim for the amount of $11,420.12, representing in- house labor costs, must be denied. Bid Preparation Costs Finally, protester claims the amount of $3,442.50, representing the time spent by its president in preparing a bid in response to the IFB. RMTC filed this protest before it submitted a bid. The procurement was suspended pending its resolution. Meanwhile, protester continued to prepare a bid that would meet the original IFB specifications "in the event the IFB would not be interpreted to only allow Microcom modems." Protester's Reply to Respondent's Opposition to Protester's Motion for Costs at 20. Protester now contends that NRC's cancellation of the solicitation, which it did not protest, caused the time RMTC spent preparing this bid to be "wasted" and that RMTC is thus entitled to bid preparation costs. The Board ordinarily does not award proposal preparation costs "unless the Government has by violating statute or regulation caused the successful protester to incur such costs unnecessarily." Xerox Corp. v. Government Printing Office, GSBCA 12408-C(12322-P), slip op. at 5 (May 14, 1993) (quoting Recognition Equipment, Inc., GSBCA 9408-C(9363-P), 89-1 BCA 21,281, at 107,351, 1988 BPD 228, at 3); Bedford Computer Corp., GSBCA 9837-C(9742-P), 89-2 BCA 21,827, at 109,814, 1989 BPD 121, at 8. In Xerox, we explained that in addition to the requisite violation of regulation or statute, the Board must also find that the claimed proposal preparation costs were wasted or rendered unnecessary as a result of the violation, and that the claimed costs are accurate and reasonable. Xerox, slip op. at 5. When, as in this case, "the protester, as a result of the protest, can be afforded a meaningful opportunity to compete further for the contract at issue, we impose upon the protester a burden to show that its expenses have nevertheless been wasted." Bedford, 89-2 BCA at 109,814, 1989 BPD 121, at 8. RMTC's protest caused NRC to reconsider the specifications required for the modems it needed. RMTC was successful to the extent that NRC may now issue a less restrictive solicitation. There is no basis on this record to surmise that any revised solicitation will differ dramatically from the one already issued. RMTC has not demonstrated that its efforts in preparing a bid responsive to the initial IFB could not readily be utilized in responding to a less restrictive IFB. Nor has RMTC shown that, as a result of any action taken by NRC, it will not be in a position to submit a bid on a new solicitation. Since we cannot find that RMTC's efforts were wasted, RMTC is not entitled to recoup its bid preparation costs. To hold otherwise would unfairly subsidize RMTC's bid proposal costs to the disadvantage of other bidders. Of even more significance, the principal ground of protest asserted by RMTC was that the IFB's specifications limited competition to one product. Under these circumstances, RMTC's decision to continue working on its proposal in the midst of its protest was a business decision on its part, and any expenses that were incurred after filing the protest would not in any event be reimbursable by the Government. See Rocky Mountain Trading Co. -- Systems Division, GSBCA 9791-C(9712-P), 89-3 BCA 22,085, 1989 BPD 200. Decision For the reasons stated above, protester's motion is GRANTED IN PART. Protester is awarded $13,867.21. This award may 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). ___________________________ CATHERINE B. HYATT Board Judge We concur: _______________________ ___________________________ VINCENT A. LABELLA MARY ELLEN COSTER WILLIAMS Board Judge Board Judge