“Educating the Government Contracting Community”

GAO Limits Recommendation of Protest Costs Reimbursement

GAO recently issued its decision in response to a request for protest cost reimbursements by a protester whose protest was dismissed after the agency agreed to take corrective action after GAO notified the parties of its’ inclination to sustain the protest. After dismissal of the protest and the agency’s agreement to take corrective action, Wisconsin Physicians Service Insurance Corporation (WPS), the protester, submitted it request for reimbursement to the GAO. The GAO decision granted in part and denied in part WPS’s request for reimbursement.

In rendering its decision, the GAO affirmed a protester’s right to seek reimbursement for costs related to a protest in which an agency decides to take corrective action. However, GAO will only recommend reimbursement of protest costs “where an agency unduly delays taking corrective action in the face of a clearly meritorious protest.” Moreover, the extent of a protestor’s recovery of protest costs is limited to only costs associated with the protester’s meritorious claims.

Here, in reviewing the protest, GAO found that one of WPS’s protest challenges constituted a “clearly meritorious protest” and that “a reasonable agency inquiry into WPS’s allegation would have revealed facts showing the absence of a defensible legal position” of that protest claim. Thus, the agency’s delayed corrective action was considered “undue” and thus a ground upon which GAO could recommend reimbursement of its WP’s protest costs.

However, GAO’s recommendation is limited to only those costs “reasonably related to protester’s pursuit of” the protest claim which GAO found “clearly meritorious.” GAO specifically excluded costs associated with protest allegations that did not meet the “clearly meritorious standard necessary for [GAO] cost reimbursement recommendation” and that were not severable from the meritorious claim.

http://www.gao.gov/assets/660/653307.pdf

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