GRANTED IN PART: September 8, 1992 GSBCA 10781-C(10642-P)-REIN SYSOREX INFORMATION SYSTEMS, INC., Protester, v. DEPARTMENT OF THE TREASURY, Respondent. Carleton S. Jones, Campbell Killefer, and Jonathan T. Cain of Shaw, Pittman, Potts & Trowbridge, Washington, DC, counsel for Protester. William L. Murphy and Mark K. Hingston, Office of the General Counsel, Department of the Treasury, Washington, DC, counsel for Respondent. Before the Full Board. DANIELS, Board Judge, with whom LaBELLA, DEVINE, BORWICK, NEILL, PARKER, HYATT, WILLIAMS, and VERGILIO, Board Judges, concur. On July 20, 1990, this Board granted a protest brought by Sysorex Information Systems, Inc. (Sysorex) against the award of a contract by the Department of the Treasury (Treasury) to Sears Business Systems Centers, a unit of Sears, Roebuck and Co. The contract, known as the Departmental Microcomputer Acquisition Contract (DMAC-II), was an indefinite delivery-indefinite quantity vehicle through which Treasury and all its bureaus might order microcomputer hardware, software, local area networks, and services. We found, as Sysorex and its fellow-protesters alleged, that the award was in violation of statute and regulation because the proposal made by the awardee did not meet ten separate mandatory requirements of the solicitation. Sysorex Information Systems, Inc., GSBCA 10642-P, et al., 90-3 BCA 23,181, 1990 BPD 193, reconsideration denied, 91-1 BCA 23,334, 1990 BPD 255. On August 20, 1990, Sysorex timely filed a motion under Rule 35 for award of costs incurred in prosecuting these protests. Sysorex sought an award of $414,854.07 in protest costs, consisting of $290,547.50 in legal fees and $124,306.57 in disbursements. The latter category includes $81,312.52 in expert consultant and witness fees and $42,994.05 in charges for courier service, local transportation, long-distance telephone service, deposition and hearing transcripts, secretarial and legal assistant overtime, document reproduction and exhibit production, computerized legal research, telecopier usage, and equipment rental and testing. Sysorex supplemented its motion on September 17, 1990, to request reimbursement for an additional $7,150.91 in specified disbursements, almost all of which was for copies of hearing transcripts. Our decision in the underlying protest was then appealed to the Court of Appeals for the Federal Circuit. On November 1, 1990, in accordance with Board policy, we dismissed Sysorex's cost case without prejudice, pending resolution of the case by the Court of Appeals. Sysorex Information Systems, Inc., GSBCA 10781-C (10642-P), 1990 BPD 365. The Court affirmed our protest decision on July 30, 1991. SMS Data Products Group, Inc. v. Austin, 940 F.2d 1514 (Fed. Cir. 1991). On August 14, 1991, Sysorex timely moved to reinstate the case involving its request for reimbursement of costs. Sysorex then supplemented its motion on September 12, 1991, to ask that reimbursement also be made for seventy-five percent of the attorney fees expended in the proceeding before the Court of Appeals -- $28,076.25. (Sysorex made a twenty-five percent reduction in costs incurred before the Court in light of the fact that of the four issues addressed by the firm on appeal, one pertained to the Board's holding in a related protest, SMS Data Products Group, Inc., GSBCA 10864-P, 91-1 BCA 23,464, 1990 BPD 348. Sysorex intervened in that protest on the side of the Government.) Treasury responded to the request, as amended, by raising two objections. First, the agency noted that the hourly rate billed by Sysorex's lead counsel was $260 (actually, only $255 until the case went on appeal), and maintained that this rate is excessive. Treasury suggested that no rate above $200 be approved. Second, the agency urged us to rely on a holding of the Court of Appeals for the Federal Circuit by denying all claimed costs incurred on appeal. The case has been referred to the full Board for the purpose of overruling Board precedent as to the second matter raised by Treasury. The decision also expressly states that the Board does not require Treasury to reimburse the permanent indefinite judgment fund in an amount equal to the funds awarded to Sysorex. Discussion The Brooks Act provides that whenever this Board "determines that a challenged agency action violates a statute or regulation or the conditions of any delegation of procurement authority" from the General Services Administrator, we may "further declare an appropriate interested party to be entitled to the costs of . . . filing and pursuing the protest, including reasonable attorney's fees." 40 U.S.C. 759(f)(5)(C)(i) (1988). This statute "implies that a prevailing protestor should be made whole from pursuing its protest so long as the fees and costs it seeks to recover are reasonable." United States v. Compusearch Software Systems, 936 F.2d 564, 566 (Fed. Cir. 1991). Our decision in the protest underlying this cost motion contains a clear finding that the challenged agency actions violated statutory and regulatory provisions. Sysorex, as one of three protesters who contested these actions, is surely an "appropriate interested party." Insofar as costs incurred at the Board are concerned, Treasury objects only to the rates charged by the attorneys, which ranged upward to $255 per hour. The Brooks Act permits an award of such attorney fees as we find to be reasonable. 40 U.S.C. 759(f)(5)(C)(i) (1988). This statute does not contain a cap on attorney rates, as does, for example, the Equal Access to Justice Act, 5 U.S.C. 504(b)(1)(A) (1988) ($75 per hour "unless the agency determines by regulation that an increase in the cost of living or a special factor . . . justifies a higher fee"). We decline Treasury's invitation to limit our analysis of reasonability by declaring that no fees above a specified rate will be considered. Sysorex's lead counsel certified that the rates charged in this case "represent the hourly rates established and charged by Shaw, Pittman, Potts & Trowbridge during the period of the protest for services performed by those . . . personnel." Motion, Exhibit C at 2. Published sources indicate that a rate of $255 for a senior partner was, during the time period when this protest was before the Board, well within the range charged by law firms in the area in which this firm is located, Washington, D.C. See, e.g., Legal Times, Dec. 18 & 25, 1989, at 17-18 (showing a 1989 range of hourly billing rates of selected major firms as $75 to $380); National Law Journal, Nov. 19, 1990, at S1-S12 (similar firms, $75 to $400). Based on our observation, we find that the case was extremely complex from a technical perspective, and that Sysorex's lead counsel in the case is a superior lawyer who demonstrated great skill in dealing with this complexity. We conclude, in light of these findings and the rates generally charged by law firms in the community, that the rate charged by this lawyer in this case was reasonable. We do make one reduction, which was not addressed by the parties, from the total amount sought by Sysorex as the costs of proceeding before the Board. This is from the $81,312.52 requested as reimbursement for expert consultant and witness fees. As the full Board recently decided in Sterling Federal Systems, Inc. v. National Aeronautics & Space Administration, GSBCA 10000-C(9835-P), 1992 BPD 141 (May 22, 1992), fees charged by expert consultants for non-testimonial services are not compensable under the Brooks Act because they are neither taxable costs (as that concept is defined at 28 U.S.C. 1920 (1988)) nor attorney fees. See West Virginia University Hospitals, Inc. v. Casey, 111 S. Ct. 1138 (1991); Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437 (1987). Of the amount sought, Sysorex is entitled only to witness fees (as authorized by 28 U.S.C.A. 1821 (West Supp. 1991)). Sysorex retained three consultants who testified in the course of the proceedings on the protest. Each of them testified at both deposition and hearing, for one day on each occasion; one testified as a rebuttal witness on a separate day of the hearing, and the other two appeared on that day because counsel was contemplating calling them as rebuttal witnesses. For these nine person-days of testimony, Sysorex is entitled to reimbursement of $30 per day, or a total of $270, in witness fees. 28 U.S.C.A. 1821(b) (1988).1 One of the witnesses traveled each day from Baltimore to Washington for the testimony. He has documented travel of 280 miles by privately-owned vehicle. Sysorex is entitled to reimbursement for this transportation at the rate which was allowed at that time by the Administrator of General Services, twenty-four cents per mile. Id. 1821(c)(2). The total amount for mileage is $67.20. Sysorex has also provided documentation that two of the witnesses incurred costs for parking and taxicab fares, in the total amount of $52.50. This is reimbursable as well. Id. 1821(c)(3). Of the $81,312.52 Sysorex seeks as reimbursement for expert consultant and witness fees, we consequently award $389.70. The total amount awarded for appearance before the Board is $341,082.16. Whether Sysorex should be reimbursed for costs it incurred in defending its protest victory at the Court of Appeals is a separate matter. The Board has previously held that such costs may be awarded: [T]his Board may award protest costs for the purpose of making the protester whole for its effort in enforcing the law. Furthermore, it seems quite clear to us that the "costs of filing and pursuing the protest" may include the cost of pursuing the protest to its ____________________ 1 The rate was increased to $40 per day on December 1, 1990. We apply the rate that was in effect when the witnesses testified. Sterling Federal, 1992 BPD 141, at 3 n.2. ________________ rightful end on appeal when a decision rendered by this Board is appealed to our appellate authority . . . . To conclude otherwise would undo the plain purpose of the statute. Thorson Co., GSBCA 8820-C(8185-P), 87-1 BCA 19,633, at 99,387, 1987 BPD 26, at 3. We called to the parties' attention the Court of Appeals' decision in Grubka v. Department of the Treasury, 924 F.2d 1039 (Fed. Cir. 1991), and asked for briefing on the relevance of that holding to our earlier conclusion. In Grubka (and in another case, Phillips v. General Services Administration, 924 F.2d 1577 (Fed. Cir. 1991)) a federal employee had succeeded in reversing an agency's adverse personnel action. The employee was then awarded by the Merit Systems Protection Board (MSPB) attorney fees incurred in proceeding before both that board and, on appeal, the Court of Appeals for the Federal Circuit. The MSPB believed that in making the award, it was acting under authority of 5 U.S.C. 7701(g) (1988). That law provides that the MSPB "may require payment by the agency involved of reasonable attorney fees incurred by an employee or applicant for employment if the employee or applicant is the prevailing party and the Board . . . determines that payment by the agency is warranted in the interest of justice." The Court held that this statute gives the MSPB "no authority to award attorney fees for services rendered by an attorney in court in connection with a judicial review of a board decision." Grubka, 924 F.2d at 1040; Phillips, 924 F.2d at 1580. According to the Court, award of attorney fees and expenses incurred on appeal is to be made by the Court itself, if separate statutory authority for such award exists. The Court found that judicial review of MSPB decisions is governed by 5 U.S.C.A. 7703 (West Supp. 1991), which does not contain a provision authorizing award of attorney fees incurred in conjunction with such review. Grubka, 924 F.2d at 1040; Phillips, 924 F.2d at 1580 (each citing Olsen v. Department of Commerce, Census Bureau, 735 F.2d 558, 560-61 (Fed. Cir. 1984), and Gavette v. Office of Personnel Management, 808 F.2d 1456, 1468 (Fed. Cir. 1986) (in banc)). Sysorex urges us to follow Thorson and distinguish Grubka on the ground that the purposes of the Brooks Act and Civil Service Reform Act fee-shifting provisions are different. Under the former statute, attorney fees and costs are to be reimbursed "to encourage private enforcement of the laws and regulations mandating the acquisition of general purpose automatic data processing resources through full and open competition." Thorson, 87-1 BCA at 99,386, 1987 BPD 26, at 2. Section 7701(g) of the Civil Service Reform Act, on the other hand, is intended to obviate the need for successful MSPB claimants to file separate civil actions for the recovery of costs. S. Rep. No. 969, 95th Cong., 2d Sess. 60-61 (1978), reprinted in 1978 U.S. Code Cong. & Admin. News 2782-83.2 The broader purpose of the Brooks Act's fee-shifting provision can only be accomplished, Sysorex concludes, if the Board is to continue to treat the term "protest" expansively, to include the defense of an appeal of one of our decisions. In searching for guidance in support of Sysorex's proposition, the most helpful case we have found is Sullivan v. Hudson, 490 U.S. 877 (1989). There, the Supreme Court held that where judicial and administrative consideration of a matter are closely intertwined, if the court hearing the case has authority to award attorney fees to the prevailing party against the Government, it may include such fees as were necessary to vindicate the party's rights in the administrative proceeding -- even if the administrative agency itself was without authority to make the award as to representation before it. To rule for Sysorex, however, we would have to turn this holding on its head, concluding that an administrative tribunal which has authority to award attorney fees incurred in proceedings before it may include, without explicit statutory authorization, such fees as were necessary to prevail before a court on appeal. Under the "American Rule," the prevailing litigant is ordinarily not entitled to collect attorney fees from the loser. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975). A prevailing litigant may collect such fees from the Government only when expressly authorized by statute. Any law permitting an award of the fees constitutes a waiver of sovereign immunity and consequently must be strictly construed. Ruckelshaus v. Sierra Club, 463 U.S. 680, 685-86 (1983). Grubka and Phillips are consistent with these general precepts; as Treasury suggests, the decisions dictate that because the Brooks Act does not expressly grant us authority to award attorney fees incurred in defending a protest victory against an unsuccessful ____________________ 2 The legislative history referenced by Sysorex describes a provision contained in a Senate bill which was modified significantly prior to enactment. The Senate would have permitted the MSPB to award reasonable attorney fees only if it determined that the agency's action was taken in bad faith; the statute as enacted permits an award where the MSPB finds simply that payment "is warranted in the interest of justice." We do not know whether this difference, or some other deviation between proposed and enacted bills, accounts for the divergence in opinion between the Senate committee and the Court as to the authority of the appellate court to award attorney fees in section 7701(g) MSPB cases. What is key to our reasoning in resolving the instant case is the Court's determination that where a statute permits an administrative tribunal to grant attorney fees, but does not explicitly provide for judicial award of such fees on appeal, no authority exists for the administrative tribunal to award fees incurred in the court action. appeal, we may not exercise such authority. The laws involved in those cases and this one are strikingly similar. Both statutes permit a defined set of parties to seek review, by a quasi- judicial tribunal located in the executive branch, of an agency determination. 5 U.S.C. 7701 (1988); 40 U.S.C. 759(f)(1) (1988). Both permit the tribunal to award costs to a party if it prevails against the Government in that administrative proceeding. 5 U.S.C. 7701(g); 40 U.S.C. 759(f)(5)(C). Both allow the tribunal's "final decision" to be appealed to the Court of Appeals for the Federal Circuit, and make no mention of a cost award in connection with the appellate proceeding. 5 U.S.C.A. 7703(b) (West Supp. 1991); 40 U.S.C. 759(6)(A). Given these similarities, we cannot distinguish the instant case from Grubka and Phillips in any meaningful way, insofar as the issue at bar is concerned. In Thorson, we stated that the "'costs of filing and pursuing the protest' may include the cost of pursuing the protest to its rightful end on appeal . . . ." We no longer consider the quoted statutory provision to be sufficient authority for us to award costs for pursuing a protest beyond the Board level. We note that in Thorson, we were not requested to consider -- and did not consider -- the impact of our appellate authority's strict application of the American rule in the absence of explicit statutory exceptions. Our review of the decisions in Grubka and Phillips, which were issued subsequent to Thorson, persuades us that the last-named case was decided incorrectly. Decision We award to Sysorex $341,082.16, to be paid, without interest, from the permanent indefinite judgment fund, 31 U.S.C. 1304 (1988). 40 U.S.C. 759(f)(5)(C) (1988). The Board does not require that Treasury reimburse the judgment fund for the amount awarded.3 ____________________ 3 Judges Devine, Borwick, Daniels, Parker, and Vergilio believe that this result is proper because the Board does not have any authority to order an agency to reimburse the fund for protest cost awards. The rationale for their position is explained in Julie Research Laboratories, Inc., GSBCA _______________________________________ 9075-C(8919-P), 89-1 BCA 21,213, 1988 BPD 208 (separate opinion of Judge Borwick); Federal Computer Corp., GSBCA _________________________ 10527-C(10389-P), 92-1 BCA 24,415, 1991 BPD 222 (separate opinion of Judge Vergilio); and Communications Resource Group, _______________________________ Inc. v. General Services Administration, GSBCA 11038-C(10998-P), _______________________________________ 92-2 BCA 24,769, 1992 BPD 29 (part VI of separate opinion of Judge Daniels). Judge Hendley believes that the result is proper for the reasons explained in his concurring opinion. Judges LaBella, Neill, Hyatt, and Williams would order Treasury to reimburse the fund. The rationale for their position is explained in the majority opinions in Julie and Federal Computer. _____ ________________ Sysorex's cost motion is denied insofar as it seeks reimbursement of costs incurred before the Court of Appeals. The Board's earlier decision on this matter, Thorson Co., GSBCA 8820-C(8185-P), 87-1 BCA 19,633, 1987 BPD 26, is expressly overruled. _________________________ STEPHEN M. DANIELS Board Judge We concur: _________________________ _________________________ VINCENT A. LaBELLA DONALD W. DEVINE Board Judge Board Judge _________________________ _________________________ ANTHONY S. BORWICK EDWIN B. NEILL Board Judge Board Judge _________________________ _________________________ ROBERT W. PARKER CATHERINE B. HYATT Board Judge Board Judge _________________________ _________________________ MARY ELLEN COSTER WILLIAMS JOSEPH A. VERGILIO Board Judge Board Judge HENDLEY, Board Judge, concurring. I join fully in all aspects of the majority opinion save one, and even there I concur in the result. Specifically, I agree with the reasoning as well as the result that finds Thorson Co., GSBCA 8820-C(8185-P), 87-1 BCA 19,633, 1987 BPD 126, no longer in accord with the law of our circuit. My only disagreement with my colleagues is that I view their preoccupation with our authority to order reimbursement of the judgment fund as more metaphysical than real. Whether or not the Board has the authority to direct reimbursement of the judgment fund, I agree that we should not order reimbursement for the reasons set out below. Do we have the statutory authority to order an agency to reimburse the judgment fund in the amount of the protest costs awarded? Although good arguments may be made on either side of the question, the overriding fact is that the agencies have been ignoring such orders, i.e., they are not reimbursing the fund. The Department of Justice has rendered an opinion stating that we are without authority to require agencies to reimburse the fund. Memorandum for William J. Haynes, II, prepared by the U.S. Department of Justice, Office of Legal Counsel (May 29, 1990). Our appellate authority, the Court of Appeals for the Federal Circuit, dismissed an agency appeal of such an order because it was an "intra-governmental dispute" and hence not justiciable. United States v. Julie Research Laboratories, Inc., 881 F.2d 1067 (Fed. Cir. 1989).4 I am more than reluctant to issue an order requiring reimbursement which can not be enforced, thus creating the impression that our orders may be ignored with impunity. My overriding concern is to avoid "Fed Mail," i.e., an agency's use of non-agency funds to pay a protester to go away. Permitting an agency to use non-agency funds, such as the judgment fund, to settle a protest, removes an important adversarial balance to the process and thereby invites raids on the treasury. Such a settlement is suspect because it involves nothing more than A and B agreeing that C (the judgment fund) pay costs, a happy solution not generally available to litigants in the civilized world. The aims of the Board members who would order reimbursement are laudatory. Reimbursement would more sharply focus accountability for agency settlements. However, actual ____________________ 4 Our appellate court noted, in the context of an appeal, that the agency's failure to reimburse the fund was irrelevant to the protester, inasmuch as protester would obtain payment regardless of whether the fund is ever reimbursed. Julie _____ Research, 881 F.2d at 1068. Thus, although our appellate court ________ did not conclude that we were without authority to require reimbursement of the judgment fund, the decision hinders the direct enforcement of our order. reimbursement is not occurring, and we have no feasible ability to enforce reimbursement. Accordingly, I view as academic the issue of our authority to direct reimbursement, and instead seek to accomplish a more useful result. The Brooks Act prescribes the result, as it authorizes this Board to declare entitlement to costs only when the Board determines that a challenged agency action violates statute or regulation or the conditions of any delegation of procurement authority. 40 U.S.C. 759(f)(5)(A), (C) (1988).5 In the underlying protest before the Board, the Board reached the merits of the protest and found an agency violation of statute. The prerequisite to awarding costs exists. I would declare protester entitled to the costs, as does the majority. Given that the case has been fully litigated, there is no reason to reach the question of reimbursing the judgment fund. The treasury is not being raided; there is no hint of Fed Mail. The statute does not direct the Board to require reimbursement. Contrast the present scenario with that of a settlement. The specter of Fed Mail rears its head as a potential to be confronted in every settlement case. The Brooks Act implicitly recognizes this. When a protest is settled, the Board does not determine that a challenged agency action is improper, the Board does not know what might have motivated the settlement. Under the statute, the Board is unable to declare entitlement when the parties settle a case. Parties should not read the above views as providing a disincentive to resolving protests. If at any time in the protest process an agency recognizes that it has violated a statute, regulation, or conditions of procurement authority, it may admit to a violation, or recognize that particular facts exist or actions occurred. Such an agency recognition could enable the Board to grant the protest under 40 U.S.C. 759(f)(5)(A) (1988). The Board could then revise, revoke, or suspend procurement authority to direct the agency on how to proceed with the procurement, id. 759(f)(5)(B), and could declare an appropriate party to be entitled to its costs, id. 759(f)(5)(C). I would allow use of judgment fund monies in ____________________ 5 The Brooks Act contains the following language: Whenever the board makes such a determination [that a _____ challenged agency action violates a statute, regulation or the conditions of any procurement authority], it may, in accordance with section 1304 of title 31, ___ United States Code, further declare an appropriate interested party to be entitled to the [specified] costs[.] 40 U.S.C. 759(f)(5)(C) (1988). such cases so long as the settlement is clearly not tied in with or contingent upon the protester's recovery of costs in any amount. Parties should not understand my position as permitting access to the judgment fund if the agency ties its admission to a payment to protester or other parties or if the agency fails to correct a correctable impropriety. In short, I would declare no entitlement in situations involving settlements in which Fed Mail appears to be a possibility. The Brooks Act establishes a bright line test (a test which also avoids the issue of our authority to direct reimbursement): If the Board actually resolves the merits of a protest (either based on findings of fact and conclusions or law, or stipulations or admissions, or the like, by the agency) and finds an agency violation, then the Board may declare a party entitled to its costs, and the judgment fund may be utilized. If the parties simply settle a protest, so that the Board is unable to unequivocally find an agency violation, the Board may not declare a party entitled to its costs. In a settlement, the door of the judgment fund is closed, whether or not it would be reimbursed. Elegant or not, this application of the Brooks Act fully recognizes, and is true to, the language in our authorizing statute. It keeps in perspective the interests of the Government, the agency, and the parties before us. Certain settlements remove the Board from a continued presence in the protest process. By denying access to the judgment fund when the parties, not the Board, resolve the merits of the protest, the Board does not acquiesce in any raid on the treasury. It is now clear that we can no longer effectively require an agency to reimburse the judgment fund, and apparently no one will help us do so. However, we should not allow ourselves to be made a party to settlements to be paid from the judgment fund. _________________________ JAMES W. HENDLEY Board Judge