_______________________________________________ GSBCA 13084-C(12930-P) GRANTED; GSBCA 13086-C(12936-P) GRANTED IN PART: August 8, 1995 _______________________________________________ GSBCA 13084-C(12930-P), 13086-C(12936-P) MATERIALS, COMMUNICATION & COMPUTERS, INC., and NCI INFORMATION SYSTEMS, INC., Applicants, v. DEFENSE LOGISTICS AGENCY, Respondent. Kenneth S. Kramer, James M. Weitzel, Jr., and Louis D. Victorino of Fried, Frank, Harris, Shriver & Jacobson, Washington, DC, counsel for Applicant Materials, Communication & Computers, Inc. John R. Tolle and William T. Welch of Barton, Mountain & Tolle, McLean, VA; and J. Patrick McMahon of Vienna, VA, counsel for Applicant NCI Information Systems, Inc. Jo H. DuBose and Walter Thomas, Office of General Counsel, Defense Logistics Agency, Alexandria, VA, counsel for Respondent. Before Board Judges PARKER, BORWICK, and VERGILIO. BORWICK, Board Judge. We consider the cost applications of Materials, Communication & Computers, Inc. (MATCOM2) and NCI Information Systems, Inc. (NCI), as prevailing parties in the protests of Materials Communications & Computers, Inc. v. Defense Logistics Agency, GSBCA 12930-P, et al., 94-3 BCA 27,261, 1994 BPD 269. NCI seeks $226,904.09 for the costs of filing and pursuing its protest and costs of proposal preparation; MATCOM2 seeks $48,254.65 for the costs of filing and pursuing its protest. Both MATCOM2 and NCI initially challenged respondent's evaluations and award determination. The respondent, Defense Logistics Agency (DLA), recognized that it had underestimated the number of labor hours necessary to perform the contract and issued an amended solicitation reflecting increased labor hours. The protesters then objected to the respondent's refusal to allow those vendors in the competitive range to submit new best and final offers (BAFOs) in response to the amendment. MATCOM2, however, maintained that amended technical BAFOs were not required. NCI also challenged the acceptability of both awardee's and MATCOM2's proposals, based upon allegedly insufficient resumes and experience of proposed employees. NCI challenged the adequacy of respondent's discussions with NCI concerning its pricing of certain sample tasks. Finally, NCI maintained that respondent failed to conduct a cost-technical trade-off, as required by the solicitation. Shortly after the filing of the protests, respondent stated its willingness to allow the vendors in the competitive range to submit amended cost BAFOs, but not amended technical BAFOs. Consequently, most of the hearing time was spent exploring the significance of the change in labor hours to vendors' technical proposals. A smaller portion of the hearing was spent on the issue of the sufficiency of the resumes, the experience of employees proposed, and the adequacy of discussions with NCI. As to the BAFO issue, MATCOM2 and NCI were prevailing parties, in that respondent agreed to seek new BAFOs in response to the amended requirement for labor hours. We concluded that regulation required respondent to request both technical and cost BAFOs, and we revised respondent's delegation of procurement authority accordingly. NCI, while prevailing completely on the BAFO issue, did not prevail on the issues of technical acceptability of its competitors' proposals or the alleged inadequate discussions that NCI had raised. We determined the issue of the alleged failure to conduct a cost-technical trade-off to be moot considering the relief granted. Materials Communications & Computers, Inc. v. Defense Logistics Agency, GSBCA 12930-P, et al., 95-1 BCA 27,312, at 136,133, 136,135-36, 1994 BPD 269, at 14, 17-20. We stated that because of the relief granted, NCI had the opportunity to submit another proposal. Id. at 136,136, 1994 BPD at 20. MATCOM2 seeks $44,788.50 of legal fees for 145.2 hours of attorney and paralegal work on the protests, and $3,466.15 for ancillary expenses (courier, document reproduction, secretarial overtime, and computerized legal research billed at cost), for a total of $48,254.65 as the cost of filing and pursuing its protest. MATCOM2's Application, Exhibits B, C. The hours expended and costs incurred are supported by the record, reasonable and related to filing and pursuing the protests. NCI seeks a total of $114,670.80 for its counsel fees and expenses as its costs of filing and pursuing the protests. NCI's Application at 9. The total of the invoices attached to NCI's application-- $118,338.29--is greater than $114,670.80.1 The invoices show that NCI's counsel Barton Mountain & Tolle (BM&T) rendered attorney services of 360.79 hours for this protest and on the cost application for attorney fee of $86,384.15. BM&T incurred $835.64 of expenses (courier, facsimile and reproduction), as well, for a total of $87,219.79. NCI's Application, Exhibits 1- 4. The invoices show that NCI's counsel J. Patrick McMahon spent 219.89 hours on the protest and the cost application plus $98.50 of expenses, for a total attorney fee and expense of $31,148.50. NCI's Application, Exhibits 5-8. The attorneys for both MATCOM2 and NCI kept detailed schedules, which describe the work they did, when they did the work, and how the work related to the filing and the pursuit of the protest or the cost application. NCI claims in-house protest costs of $11,042.54 and references its Exhibit 9. NCI's Application at 9. The expenses are for labor, overhead, general and administrative overhead on the labor, "ODCs" ("other direct costs") and general and administrative overhead on the other direct costs from May 13, 1994 through October 24, 1994. NCI's Application, Exhibit 9. The breakout behind this schedule reflects nine employees allegedly working a total of 131 hours on the protest for a total direct labor cost claimed of $4,038.37. NCI does not describe what work these employees did, how long it took the employees to do the work, and how the work contributed to NCI's pursuit of the protest. The breakout mentions travel and lunch, but the breakout does not describe the dates of the travel or the lunches, or the relationship of the expenses to pursuit of the protest. The itemized "other direct costs" include $3,532.25 for transcripts. ____________________ 1 The cost application's breakout immediately below the figure of $114,670.80 shows a total of $118,332.84. NCI's Application at 9. There is a difference of $35.45 between the total shown on the invoice and the breakout; in the breakout, NCI states its costs for BM&T's services and expenditures dated November 23, 1994 was $3,662. The invoices show a billed cost of $3,697.45. NCI's Application, Exhibit 4. We conclude that the appropriate figure to use for computations is $114,670.80--the figure NCI requested in its application. NCI claims proposal preparation costs of $101,190.71. NCI's Application at 10. NCI argues: These proposal costs were those that NCI incurred before DLA's most recent request for BAFOs on cost and technical. The costs were incurred in preparing the proposal that was submitted in response to DLA's original solicitation which contained an incorrect number of labor hours. If DLA had included the correct number of labor hours in the original solicitation, NCI would not have needlessly incurred the proposal preparation costs that it did. Id. Discussion Prevailing parties are entitled to recover their costs of filing and pursuing the protests, including reasonable attorney fees and expenses, and in-house employee salaries and expenses. 40 U.S.C. 759(f)(5)(C) (1988); Sterling Federal Systems v. Goldin, 16 F.3d 1177 (Fed. Cir. 1994); Integrated Systems Group, Inc. v. Department of the Army, GSBCA 12622-C(12521-P, et al.), 94-2 BCA 26,819, 1994 BPD 65. The extent of the protester's success is a crucial factor in determining the proper amount of an award. In determining a reasonable award, we deduct time spent on discrete and unsuccessful claims. U.S. West Information Systems Inc., GSBCA 9114-C(8995-P), et al., 89-2 BCA 21,774, at 109,557, 1989 BPD 119, at 8. But where the successful and non-successful claims are not readily severable, as in Planning Research Corp., GSBCA 10905-C(10694-P), et al., 91-3 BCA 24,159, at 120,879, 1991 BPD 147, at 4, it is inappropriate to treat protester's successful and unsuccessful protest claims separately for purposes of an award of costs. See Grumman Data Systems Corp. v. Department of the Air Force, GSBCA 11799-C(11635-P), 93-2 BCA 25,773, at 128,243, 1993 BPD 16 at 7 (protester's cost-technical trade-off claim required a comprehensive review of the RFP requirements and how the parties offered to satisfy them); see also Laptop Falls Church v. Department of Justice, GSBCA 12229-C(12117-P), 93-2 BCA 25,857, at 128,660, 1993 BPD 56, at 3 (Board refused to sever cost claims by issue where protesters received substantial relief on the basis of a complaint alleging factually-intertwined Government errors). NCI's petition Attorney fees and expenses NCI argues that the issue on which it prevailed--the violation of regulation in DLA's refusal to allow amended technical BAFOs--"[was] inextricably intertwined with the other issues in the protest and not fully severable and distinct." NCI's Application at 8. We disagree. The issue on which NCI prevailed, the necessity for revised technical BAFOs, required proof of the effect of respondent's labor hour changes on NCI's proposal. Those facts were different from facts necessary to prove the issues on which NCI lost. The issue of the adequacy of discussions centered on the Government's communications with NCI and whether portions of NCI's proposal were weaknesses or deficiencies. The issue of technical acceptability of other proposals related to the sufficiency of resumes and quality of personnel, and did not concern the Government's estimate of labor hours. We have reviewed NCI's petition for attorney fees and expenses, and conclude that the hourly rate and number of hours worked are fair and reasonable given the standard hourly rate for lawyers in the community and the number of issues in the protest. Since the issues are segregable, we must make an apportionment to take into account the degree of success obtained. In this case, we conclude that $55,000 represents for NCI reasonable recovery on the successful issue of protest. NCI's in-house expenses NCI claims $11,042.54 as its in-house expenses for filing and pursuing the protest. Unfortunately, while the dollar amount of the costs is documented, save for the transcripts, when the costs were incurred, the purpose for incurring the costs and the reasonableness of the costs are not. There is simply no way to tell from the schedules submitted whether the expenses were reasonable as to purpose or amount, or whether the costs were validly incurred as costs of "filing and pursuing the protest." 40 U.S.C. 759(f)(5)(C) (1988). Our concern as to purpose of some of the costs stems from learning that costs are claimed for a period beginning from May 13, 1994. NCI's Application, Exhibit 9 at 2 (unnumbered page). NCI filed its protest on August 15, some three months after May 13. There is no explanation in NCI's submission of how expenses incurred in May served the purpose of pursuing a protest filed in August. Expense claims must be adequately documented as to necessity and reasonableness of amount. Computer Data Systems, Inc. v. General Services Administration, GSBCA 12297-C(12195-P), 93-3 BCA 26,201, at 130,423, 1993 BPD 174, at 2. NCI failed to submit the documentation required. For example, while we recognize that NCI must have incurred some in-house travel expenses, since two of its employees testified at the hearing in Washington DC, we cannot create for NCI that which NCI has failed to submit: a well documented claim for expenses of pursuing the protest. We grant NCI's claim for the transcript, in the amount of $3,532.25. The remainder of NCI's claim for in-house expenses is denied. NCI's claim for proposal preparation costs A prevailing party is entitled to costs of proposal preparation where the Government by violation of statute or regulation caused the successful party to incur such costs unnecessarily. Communications Technology Applications, Inc., GSBCA 10172-C(9978-P), 90-3 BCA 23,261, at 116,700, 1990 BPD 207, at 5. NCI is not entitled to proposal preparation costs here. NCI maintains that if the Government had published an accurate estimate of labor hours in the original solicitation, NCI would not have submitted the proposal that it did. NCI misfocuses the issue of protest. NCI did not allege or prevail on a violation of regulation stemming from the DLA's inaccurate statement of expected labor hours in the original solicitation. NCI, rather, alleged and proved that the violation occurred when respondent amended its labor hours without giving vendors an opportunity to submit new technical BAFOs. Further, NCI's initial proposal was not wasted; it enabled NCI to remain in the competition and submit a second round of BAFOs.2 NCI's claim for proposal costs is denied. MATCOM2's application We have reviewed MATCOM2's application for the costs of filing and pursuing the protests (i.e., attorney fees and expenses) and find them reasonable as to purpose and amount. MATCOM2 is entitled to $48,254.65 as the cost of filing and pursuing the protests. Decision NCI's application is GRANTED IN PART. NCI is entitled to $58,532.25, which NCI necessarily and reasonably incurred in filing and pursuing the protest. This sum 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). MATCOM2's application is GRANTED. MATCOM2 is entitled to $48,254.65, which MATCOM2 necessarily and reasonably incurred in filing and ____________________ 2 The fee-shifting provisions of the Brooks Act were not meant to insure businesses from the risks and the costs of doing business with the Government. The Government's changing its mind as to its estimated number of labor hours was, in this case, simply a cost of doing business. pursuing the protest. This sum 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). ________________________________ ANTHONY S. BORWICK Board Judge We concur: ______________________________ ______________________________ ROBERT W. PARKER JOSEPH A. VERGILIO Board Judge Board Judge