A successful protester requested reimbursement of protest costs. The protester sought costs incurred by an administrative specialist who formatted and edited the protest. The protester claimed this administrative employee’s compensation rate was $350 per hour. GAO found this rate far-fetched. It was not clear to GAO why this administrative work could not have been performed at a cheaper rate. What’s more, the protester had not provided any evidence to show why this administrative employee’s compensation rate was the same as the protester’s COO.
Rice Solutions, LLC—Costs, GAO B-420475.2
Background
Indian Health Services (IHS) awarded a contract for nurse anesthetist services. Rice Solutions filed a GAO protest challenging the award. GAO sustained the protest and recommended Rice be reimbursed its protest costs. Rice submitted a claim to the IHS for costs. IHS didn’t respond, so Rice requested a recommendation of reimbursement from GAO.
Rice sought over $13,000 in protests costs. IHS agreed that $3,500 of those costs were reimbursable but objected to the remainder.
Analysis
Work Performed by Rice’s COO
Rice sought over $6,300 for 18`hours of work performed by it Chief Operating Offices on the protest. Rice claimed this amount was based on the COO’s $350 per hour wage.
When seeking to recover an employee’s time, claimed rates must be based on actual rates of compensation and not market rates that include profit. GAO noted that Rice alleged the COO $350 per hour rate was based on market rates. Because market rates include profit, GAO refused to approve the request. Moreover, Rice had failed to provide any evidence that the COO’s actual compensation was $350 per hour.
Director of Administrative Services
Rice also sought reimbursement for its director of administrative services. Rice submitted an employment agreement for this employee, which showed she was compensated at a rate of $350 per hour.
GAO questioned the reasonableness of this request. This director had been paid $350 to format and edit the protest document. It was not clear why other people at the company could not have performed this work at a cheaper rate. Rice had not provided any evidence to show that it was reasonable for this person, who performed a purely administrative task, would be paid at the same rate as the COO.
Contract Specialist
Lastly Rice sought to recover costs incurred by a contract specialist at $350 per hour. It was not clear, however, what this person had actually done on the protest. Rice had provided an invoice for the contract specialist, but it only described tasks performed in general terms—e.g., “management,” “protest prep.” This was not enough to support a request for costs.
Rice is represented by Derek Kroll. The agency is represented by Megan Nathan and Terrius Greene of the Department of Health and Human Services. GAO attorneys Emily R. O’Hara and Peter H. Tran participated in the preparation of the decision.
–Case summary by Craig LaChance, Senior Editor
