Bid Protests - Reimbursement of Costs

It should be fairly common knowledge that companies who prevail in a bid protest situation are entitled to reimbursement for reasonable costs related to the protest. This, is to relieve protesters, with valid claims, f the burden of vindicating the public interests which Congress seeks to promote. It is not intended to be a reward to prevailing protesters or as a penalty imposed upon the Government.

In a recent case, a company who won a bid protest, then applied for reimbursement for 93 hours of attorney's time. The Army refused stating that 93 hours was excessive because the protest issue was straightforward and simplistic in nature and should not have required that much effort. The company filed another appeal.

The Comptroller General (CG) examined the reasonableness of attorney hours to determine whether they exceed, in nature and amount, what a prudent person would incur in pursuit of his or her protest. In this case, the Army did not identify specific hours as excessive nor did it "articulate a reasoned analysis as to why payment for those hours should be disallowed". The CG stated that "...simply concluding that the hours claimed are excessive ... is inadequate to justify denying a claim for protest costs".

The CG's review furnished no basis for concluding that the number of hours exceeded, in nature or amount, what a prudent person would incur in pursuit of this protest. Nor did the CG find any basis to agree with the Army that the issue raised by the protester was a narrow, simplistic, and uncomplicated legal issue that did not justify the hours claimed.

The CG told the Army to pay the attorney fees and also to reimburse protest cost associated with the second appeal.

Companies filing bid protests need to segregate costs associated with their appeal in their accounting records in order to facilitate the preparation of reimbursement requests if/when they prevail. Remember, the rules of "reasonableness" apply.