United States Government Accountability Office 

Washington, DC 20548 

Comptroller General

of the United States

 

Decision 

Matter of: DGR Associates, Inc.--Costs 

File: B-401791.5 

Date: February 16, 2010 

Darcy V. Hennessy, Esq., Hennessy and Boe, P.A., for the protester. 

Christopher S. Cole, Esq., Department of the Air Force, for the agency. 

Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office of the 

General Counsel, GAO, participated in the preparation of the decision. 

DIGEST 

Request for recommendation that portion of protest costs be reimbursed is denied 

where record fails to establish a nexus between the bases of protest raised by the 

protester and the basis for the agency’s corrective action. 

DECISION 

DGR Associates, Inc., of Dallas, Texas, requests that we recommend that it be 

reimbursed a portion of the costs that it incurred in protesting the award of a 

contract to Inuit Services, Inc., of Anchorage, Alaska, under request for proposals 

(RFP) No. FA5004-09-R-C014, issued by the Department of the Air Force for military 

family housing maintenance services at Eielson Air Force Base, Alaska. Specifically, 

DGR asks that it be reimbursed for protest costs that it incurred after the agency was 

placed on notice that Inuit was not a small business and thus was ineligible for 

award under the solicitation, which was set aside for qualified Historically 

Underutilized Business Zone (HUBZone) small business concerns. 

We deny the request. 

The contracting officer notified DGR of the award to Inuit, the offeror submitting the 

lowest-priced proposal that had received a past performance rating of substantial 

confidence, on August 10, 2009. DGR protested to our Office on August 20, arguing 

that the agency lacked a basis for assigning Inuit a past performance rating of 

substantial confidence. The protester asserted in this connection that Inuit’s Small 

Business Administration (SBA) profile and information on Fedvendor.com both 

indicated that Inuit lacked recent relevant experience. DGR also filed a timely 

protest of Inuit’s size status. 
On September 1, counsel for Inuit notified the parties and GAO that Inuit had 

recalculated its average annual revenues for the past 3 completed fiscal years and 

made a preliminary determination that it did not meet the size standards for the 

contract, and that, given these circumstances, it could not and would not accept the 

award. By letter of September 3, the Air Force notified our Office that “[i]n light of 

the Awardee’s intent to withdraw from the award of the contract and because the 

prices on the proposals have expired,” it intended to resolicit the requirement. Air 

Force Letter to GAO, Sept. 3, 2009. On September 9, SBA issued a size status 

determination finding that Inuit was ineligible for award under the referenced 

solicitation because it was other than a small business concern. By email of 

September 15, the Air Force informed us that it was terminating Inuit’s contract. The 

Air Force subsequently learned that Inuit intended to appeal the SBA ruling, 

however, and by email of September 17, the agency advised our Office that it had 

decided not to terminate Inuit’s contract until SBA had decided the appeal. 

While these events were transpiring, our Office continued with development of the 

protest before us. In late September, the agency furnished a report responding to the 

protester’s allegation that Inuit lacked recent relevant experience and thus could not 

reasonably have been assigned a past performance rating of substantial confidence, 

and on October 5, DGR filed its comments on the agency report. 

In its comments, DGR raised additional arguments that were based on information 

furnished in the agency report. The protester argued that in evaluating the awardee’s 

past performance, the agency had failed to consider the scope and range of Inuit’s 

involvement in the contracts identified in its proposal; in the foregoing connection, 

DGR noted that Inuit had been the prime contractor on only one of the projects that 

it had listed. 

On October 9, SBA denied Inuit’s size status appeal. On October 23, the Air Force 

notified us that it was terminating Inuit’s contract, and that “because the contract 

requirements [had] changed,” it intended to resolicit the requirement. On 

October 28, we dismissed DGR’s protest of the award to Inuit as academic. 

DGR argues that it should be reimbursed for the costs that it incurred in preparing its 

comments on the agency report because the filing of these comments would have 

been unnecessary if the agency had terminated Inuit’s contract at the time it was 

informed that SBA had determined Inuit to be other than small and thus ineligible for 

award in mid-September. 

Under the Competition in Contracting Act of 1984, our Office may recommend that 

protest costs be reimbursed where we find that the agency’s action violated a 

procurement statute or regulation. 31 U.S.C. § 3554(c)(1) (2006). Our Bid Protest 

Regulations provide that where the contract agency decides to take corrective action 

in response to a protest, we may recommend that the protester be reimbursed the 

costs of filing and pursuing its protest, including reasonable attorneys’ fees. 4 C.F.R. 

§ 21.8(e) (2009). This does not mean that we will recommend that costs be 

Page 2 B-401791.5 
Page 3 B-401791.5 

reimbursed in every case in which an agency takes action that renders a protest 

academic; rather, we will recommend that a protester be reimbursed its costs only 

where the record establishes that (1) the agency action that rendered the protest 

academic was taken in response to the protest, and (2) the agency unduly delayed 

taking the action in the face of a clearly meritorious protest. RANA Tech.--Costs, 

B-400471.2, Feb. 3, 2009, 2009 CPD ¶ 38 at 3. 

Here, it is apparent from the record that the Air Force took the corrective action of 

terminating Inuit’s contract in response to the SBA determination that Inuit was 

other than small, rather than in response to the arguments raised by the protester in 

its submissions to our Office. Because the record fails to establish a nexus between 

the grounds of protest raised by the protester and the agency’s corrective action, 

there is no basis for us to recommend that DGR recover any portion of its protest 

costs. 

The request is denied. 

Lynn H. Gibson 

Acting General Counsel