GAO rejects Peraton's request for protest cost payments

Peraton scored victories on two fronts when the company prevailed in its protest of an Air Force contract that was won by Science Applications International Corp..

For one, the company got back into the competition for the $655 million Engineering Development Integration and Sustainment contract known as EDIS. Peraton also won the right to ask the Air Force to reimburse its costs.

But the cost request quickly became its own dispute, which allows us to get some insight into how companies pay to pursue a protest and how agencies can push back on having to pay those costs.

Peraton first asked the Air Force for $105,819, but later reduced that to $96,475. The Air Force balked and offered much less.

Peraton made several claims in its protest, but GAO only sustained the claim involving SAIC’s small business participation plan. GAO denied the other claim involving how the technical proposals were evaluate.

The Air Force argued it should only pay for the portion of Peraton’s costs that are linked to the sustained portion of the protest.

GAO has agreed with the Air Force and says the military service should only pay Peraton $26,166.

In arguing for the lower amount, the Air Force parsed through Peraton’s costs and used a variety of methods to separate the winning portions of the protest from the unsuccessful portions. The Air Force looked at the time periods for which attorney fees were claimed.

For work between May 13 and May 31, 2019, the Air Force would reimburse all of Peraton’s attorney fees at $14,648. But for work between April 4 and May 1, 2019, the Air Force would only reimburse a portion of those costs and $11,168 to be exact.

To calculate that, the Air Force divided the number of pages of Peraton’s filings that dealt with the portion they won by the total number of pages. The Air Force then used this percentage to calculate what they would pay.

The Air Force declined to pay any of Peraton’s costs before April 4, 2019 because all of that work was related to portions of the protest that GAO rejected.

That’s how the Air Force took Peraton’s $96,475 claim and cut it down to $26,166. Peraton then filed another protest for costs with GAO after rejecting this offer.

GAO usually says that a protest should be reimbursed for all of the costs. But in this case, GAO agreed with the Air Force’s argument that the issues Peraton raised were so separate they were basically different protests.

What I learned from this: It costs a lot of money to pursue a protest or maybe it doesn’t.

If you are the incumbent, the calculation is easy to make. A delay in an award manes more time to perform the work, and additional revenue gained during the delay more than covers the cost of protest.

But it's a different animal for the challenger. You have to consider both the cost and likelihood of prevailing.

In this case, Peraton was a challenger. SAIC was as well. The incumbent was Lockheed Martin and they have not pursued a protest. Though I suppose Lockheed is continuing to provide services during this protest period, and for now are perhaps the real winners.