United States Government Accountability Office 

Washington, DC 20548 

Comptroller General

of the United States

 

Decision 

Matter of: DTV Transition Group, Inc.--Costs 

File: B-401466.2 

Date: April 7, 2010 

Stephen Thomas Yelverton, Esq., Yelverton Law Firm PLLC, for the protester. 

Maureen Duignan, Esq., and Derek A. Yeo, Esq., Federal Communications 

Commission, for the agency. 

Eric M. Ransom, Esq., and Christine S. Melody, Esq., Office of the General Counsel, 

GAO, participated in the preparation of the decision. 

DIGEST 

Claim for costs is denied where protester fails to adequately document its claim and 

aggregates allowable and unallowable costs such that the allowable costs cannot be 

determined on the basis of the record. 

DECISION 

DTV Transition Group, Inc. (DTG) of Washington, D.C., requests that our Office 

determine the amount that it should recover for the costs of preparing its proposal 

under Federal Communications Commission (FCC) solicitation No. 09000057, for 

walk-in centers to provide consumer assistance related to the transition to digital 

television. 

We deny the claim for costs. 

DTG filed its original protest on June 8, 2009, alleging that the FCC failed to comply 

with the small business set-aside provisions of the solicitation and made awards that 

would not meet the agency’s needs. Our Office dismissed that protest as academic 

on July 15, following the FCC’s decision to take corrective action consisting of 

agreeing to pay DTG’s reasonable proposal preparation costs. Payment of costs was 

the only available corrective action in the protest because, due to the impending 

nationwide transition to digital television, the FCC made a determination under 

Federal Acquisition Regulation § 33.103(f)(3) to continue performance of the 

awarded contracts, and the contracts were largely performed during the pendency of 

the protest. 
In our decision dismissing the protest, our Office cautioned DTG that costs claimed 

by a protester may be recovered only to the extent that they are adequately 

documented and shown to be reasonable. We further noted that claims for 

reimbursement of expenses must identify and support the amounts claimed for each 

individual expense, the purpose for which that expense was incurred, and how the 

expense relates to the claim. 

On July 24, DTG submitted a claim for costs to the FCC in the amount of $118,500, 

supported by a short affidavit from the managing director of DTG. The affidavit 

explained that the costs were related to services provided by two firms, SinoPowell 

Capital LCC and Yelverton Law Firm PLLC, which were engaged in the preparation 

of the proposal. This affidavit further stated: 

Considering the size and scope of DTG’s $18 Million Bid Proposal 

and the specialized and complex research and analysis that was 

required, SinoPowell Capital and Yelverton Law Firm were engaged 

for flat fees of 2.5% each of the bid amount awarded by the FCC, 

with a minimum fee due to SinoPowell Capital of $100,000.00 and to 

Yelverton Law Firm of $18,500.00. These fees were due in the event 

that the bid proposal was not implemented for any reason. 

Claim for Costs, July 24, 2009, Affidavit, at 1. The claim for costs also included an 

invoice from SinoPowell in the amount of $100,000 for “market, demographic, 

financial, cost, and Bid Proposal analysis and assistance,” stating that “[w]ork 

included detailed analysis and financial modeling for the 240 facilities outlined in the 

Bid Proposal for Region 6.” Id., SinoPowell Invoice. 

The FCC responded to DTG on October 6, concluding that its claim was not 

adequately documented to allow the FCC to determine what costs were actually 

incurred, the correlation between those costs and the preparation of DTG’s proposal, 

and the reasonableness of those costs.1 The FCC therefore requested that DTG 

submit additional information, including copies of the analysis performed by 

SinoPowell, documentation of attorneys’ fees, and supporting records such as 

timesheets, calendars, expense reports, billing statements, and receipts. The FCC 

also requested documentation to support that the fees charged were within the range 

of what other firms would charge for such services, and noted that the apparent 

commonality of interests between DTG and SinoPowell (the FCC asserted that the 

 

1

 In its filing with our Office, the FCC also expressed concern regarding the total 

amount of the costs claimed by DTG, noting that the solicitation had limited 

technical proposals to three pages in length. FCC Response, Jan. 27, 2010, at 1. The 

FCC also noted that DTG’s proposal was for only one of the six regions at a 

proposed price of $18 million; in contrast, the total amount allocated by the FCC for 

all six regions was only $11.6 million, and was eventually reduced to $11,410,000. Id. 

Page 2 B-401466.2 
managing director of DTG was also the managing director of SinoPowell) might 

indicate the lack of an arms-length transaction. 

DTG responded to the FCC’s request on November 10, but did not provide any of the 

requested documentation of its claimed costs. Rather, DTG explained that, in view 

of the circumstances of the procurement, “DTG believed in good faith . . . that it was 

certain to receive some part of the overall awards” and that “[t]he professionals that 

were needed to put the bid proposal together . . . thus negotiated as their 

compensation [that] they would be an integral part of implementing the project . . . 

and would be paid for their services on such basis.” DTG Response, Nov. 10, 2009, 

at 1. 

The FCC denied DTG’s claim in full on December 8, concluding that DTG’s 

November 10 response indicated that DTG had not actually incurred proposal 

preparation costs for any services provided by the identified firms and that, in any 

event, DTG had not provided adequate documentation of any proposal preparation 

costs, or shown that any costs incurred were reasonable. DTG filed its claim with 

our Office on December 28. 

Even where an agency agrees to reimburse a protester’s reasonable proposal 

preparation costs, a protester seeking to recover such costs must submit sufficient 

evidence to support its claim. John Peeples--Costs, B-233167.2, Aug. 5, 1991, 91-2 

CPD ¶ 125 at 3. At minimum, claims for reimbursement must identify and support 

the amounts claimed for each individual expense (including cost data to support the 

calculation of claimed hourly rates for employees), the purpose for which each 

expense was incurred, and how the expense relates to the claim. Maintenance and 

Repair--Costs, B-251223.4, June 24, 1994, 94-1 CPD ¶ 381 at 4. Although we recognize 

that the requirement for documentation may sometimes entail certain practical 

difficulties, we do not consider it unreasonable to require a protester to document in 

some detail the amount and purposes of its claimed efforts. W.S. Spotswood & Sons, 

Inc.--Costs, B-236713.3, July 19, 1990, 90-2 CPD ¶ 50 at 3. It is our obligation to 

ensure that any protester seeking to recover costs meets these minimum standards. 

Here, we have reviewed the record and agree with the FCC that DTG has failed to 

provide sufficient support for its claim. Even after the FCC’s specific request for the 

necessary documentation, DTG failed to provide more than the vague SinoPowell 

invoice as evidence of its costs. Further, DTG’s statements have raised doubts as to 

whether any amounts due to SinoPowell and Yelverton Law Firm were incurred for 

the preparation of the proposal. For example, in the claim for costs filed with our 

Office, DTG states that SinoPowell and Yelverton Law Firm “negotiated as their 

compensation for bid preparation that they would be an integral part of 

implementing the $18 million project to be awarded to DTG, and would be paid for 

their services on such an integrated basis, and not just for bid preparation.” Claim 

for Costs, Dec. 28, 2009, at 2 (emphasis in original). 

Page 3 B-401466.2 
Page 4 B-401466.2 

We interpret DTG’s various statements to the agency and to our Office to indicate 

that there is a portion of the “integrated” costs included in its claim for $118,500 that 

is not attributable to the preparation of its proposal under the solicitation, and is 

therefore not properly reimbursable. Where, as here, a protester has aggregated 

allowable and unallowable costs, and provided such insufficient documentation that 

we cannot tell from the record before us what portion is allowable, the entire 

amount must be disallowed even though some portion of the claim may be properly 

payable. TRESP Assocs., Inc.--Costs, B-258322.8, Nov. 3, 1998, 98-2 CPD ¶ 108 at 4. 

Accordingly, DTG’s claim must be denied in full. 

The claim is denied. 

Lynn H. Gibson 

Acting General Counsel