Are costs related to the possibility of a protest unallowable even if the protest was never prepared and never occurred?
This response is based on the information provided. We suggest you discuss with your contracting and finance team, program manager and/or legal department as appropriate.
We believe the most appropriate/closely FAR part 31 subsection is FAR 31.205-33, Professional and Consultant Service Costs.
"(d) In determining the allowability of costs (including retainer fees) in a particular case, no single factor or any special combination of factors is necessarily determinative. However, the contracting officer shall consider the following factors, among others:
(1) The nature and scope of the service rendered in relation to the service required.
(2) The necessity of contracting for the service, considering the contractor’s capability in the particular area.
(3) The past pattern of acquiring such services and their costs, particularly in the years prior to the award of Government contracts.
(4) The impact of Government contracts on the contractor’s business.
(5) Whether the proportion of Government work to the contractor’s total business is such as to influence the contractor in favor of incurring the cost, particularly when the services rendered are not of a continuing nature and have little relationship to work under Government contracts.
(6) Whether the service can be performed more economically by employment rather than by contracting.
(7) The qualifications of the individual or concern rendering the service and the customary fee charged, especially on non-Government contracts.
(8) Adequacy of the contractual agreement for the service (e.g. description of the service, estimate of time required, rate of compensation, termination provisions)."
From the background you provided, the charges are not related to prosecuting a protest, but into researching the implications and outcomes possible should the company submit a proposal. Given the data provided, we believe the questioned costs are allowable.