Foot-dragging proves costly for winning protester

Systems Studies & Simulation won a bid protest last year, and the Government Accountability Office said S3--as the Huntsville, Ala., company is known--should be reimbursed for its cost.

Nothing unusual there, and the company submitted a claim in July asking for $97,407.22, which included $75,585.60 in attorney’s fees and $21,407.62 in proposal preparation costs. In September, the agency--in this case, the Army--countered with an offer to pay $22,559.63.

That’s a huge drop from the original claim. You probably should make a counterclaim or something but you probably shouldn’t do what S3 apparently did – nothing.

The Army’s counter offer was met with silence to the point that in January, the Army emailed the company and asked what it intended to do. S3 didn’t respond to the Army but instead filed a request for GAO a few days later asking the watchdog agency to recommend that it be reimbursed $66,078.62 in attorney’s fees.

S3 argued that the Army failed to request a purchase order, failed to remit payment, and failed to provide a timetable for making the proposed payment.

But GAO sided with the Army in that S3 was the one who failed to take any action, even at the least telling the Army that it either accepted or rejected the proposed settlement. The Army told GAO that when it made its counteroffer, it told S3 to contact them if they had any questions or concerns about the settlement offer.

I reached out the S3’s attorneys, but I didn’t get a response.

The GAO decision denying S3’s request goes into other trouble spots involving the company’s request for reimbursement including allowable and unallowable costs. Apparently, S3 lumped them together and the allowable and unallowable costs couldn’t be determined or separated, so they had to rule that all the costs were unallowable.

The company apparently mixed the costs of an earlier protest involving the Army contract with the protest that GAO eventually ruled on. The first protest was dismissed because of a corrective action. The costs for the first protest are unallowable, but since all the attorney’s fees for both protests were combined, GAO couldn’t separate the allowable from the unallowable.

But the bigger lessons here is about the responsive and timeliness. S3 was sunk because it took longer to respond or even acknowledge the Army’s counteroffer than it took for GAO to hear the protest.

From reading the GAO report, the company would have had a shot at a larger reimbursement if it had responded in a timely manner and more clearly itemized its costs.

But with GAO’s denial of its reimbursement request, the company likely has lost its chance to get even the $22,000 the Army offered back in September.