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Claim for labor and overhead costs incurred while waiting for resolution of a bid protest is denied. The contractor sought to recover the salary of a key employee it hired for performance of the contract. But the contractor paid the employee to do nothing during the protest. ASBCA declined to reimburse the contractor for money squandered on an unproductive employee. The contractor also sought overhead costs, but ASBCA denied that claim, finding that the protest had not extended the time for performance, and the contractor had not been on standby during the protest.

The Army awarded a contract to Advanced Global Resources, LLC for information technology support services. A disappointed bidder filed a GAO protest, challenging the award to AGR. As a result of the protest, the Army issued a Stop Work Order to AGR, which directed the company to cease performance and take reasonable steps to minimize costs. After GAO denied the protest, AGR submitted a claim to the Army for labor and overhead costs it incurred during the stop work period. The Army denied the claim. AGR appealed to ASBCA.

AGR’s contract did not include FAR 52.233-3, the clause that provides for cost adjustments due to a protest. Without a provision that gives the government the right to stop performance, an order stopping work on a contract is a breach. Nevertheless, the board held that where a contract does not contain FAR 52.233-3, the board may incorporate that provision pursuant to the Christian doctrine, which allows ASBCA to insert clauses into a contract that express deeply ingrained procurement policy.

Aside from this, as part of its claim, AGR sought to recover the salary it paid an employee during the stop work period. AGR had hired this employee right after it received award and kept him on through the protest. But this employee did not perform any work while the protest was pending. Rather than seek to limit its costs, AGR had paid the employee to do nothing. Needless to say, the board denied the claim for this employee’s salary.

Additionally, AGR sought to recover $124,000 in home office overhead costs it incurred during the protest under the formula announced in Eichleay, Inc., ASBCA 60-2 ¶ 2688. Under the Eichleay formula a claimant must show (1) government caused delay, (2) that the delay extends the time for performance, (3) that the contractor planned to finish performance early, and (4) that the contractor was on standby and unable to perform other work. While there was no dispute that the delay in this case was caused by the government, the board found that AGR was unable to satisfy the other elements of the formula.

First, the delay did not extend the performance period. Second, AGR could not show that it planned to finish the contract early. The contract obligated AGR to provide IT services throughout the contract period. This was not the type of work that could be completed early.

Finally, AGR failed to establish it was on standby. To establish that it was required to be on standby, a contractor must show that the delay was indefinite and that they were required to resume at full capacity once the stop work period ends. Under GAO’s regulations, a bid protest has a maximum duration of 100 days, so the delay was not indefinite. Also, AGR’s contract was a “rebadge,” which means that AGR planned to simply employ the incumbent’s employees. Thus, AGR had not been required to sit around ready to resume at full capacity.

AGR is represented by David Yang of Oles Morrison Rinker Baker, LLP. The government is represented by Raymond M. Saunders, Major Wayne T. Branom III, and Captain Jeremy D. Burkhart of the U.S. Army