GRANTED IN PART: September 10, 1992 GSBCA 10783-C(10644-P)-REIN SMS DATA PRODUCTS GROUP, INC., Protester, v. DEPARTMENT OF THE TREASURY, Respondent. F. Whitten Peters and Laura P. Masurovsky of Williams & Connolly, Washington, DC, counsel for Protester. William L. Murphy and Mark K. Hingston, Office of the General Counsel, Department of the Treasury, counsel for Respondent. Before Board Judges LaBELLA, Acting Chief Judge, NEILL, and DANIELS. DANIELS, Board Judge. On July 20, 1990, this Board granted a protest brought by SMS Data Products Group, Inc. (SMS) 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 SMS 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 17, 1990, SMS timely filed a motion under Rule 35 for award of costs incurred in prosecuting these protests. SMS sought an award in the amount of $352,827.51 in protest costs, consisting of $232,981.75 in fees charged by retained counsel, $60,521 in costs of disbursements made by those lawyers, and $59,324.26 in costs incurred by SMS itself. SMS also asked that its proposal preparation costs, which were unspecified, be reimbursed. (The last part of the request was later withdrawn. SMS Data Products Group, Inc.'s Amended Motion for Award of Protest Costs (Sept. 20, 1991) at 2 n.1.) Our decision in the underlying protest (along with our decision in a related case, SMS Data Products Group, Inc., GSBCA 10864-P, 91-1 BCA 23,464, 1990 BPD 348) 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. SMS Data Products Group, Inc., GSBCA 10783-C(10644-P), 1990 BPD 364. The Court affirmed our protest decisions on July 30, 1991. SMS Data Products Group, Inc. v. Austin, 940 F.2d 1514 (Fed. Cir. 1991). On August 16, 1991, SMS timely moved to reinstate the case involving its request for reimbursement of costs. SMS amended its motion on September 20, 1991, to request reimbursement of an additional $72,497.98 -- $60,985 in fees of retained counsel, $7,576.63 in disbursements made by those lawyers, and $3,936.35 in costs incurred by the protester itself. These sums were incurred, according to SMS, in defending the Board's decision in the underlying protest. (SMS estimated the percentage of each attorney's time that was devoted to defending this decision and excluded from its request the costs associated with all other time devoted to the case before the Federal Circuit.) Treasury objected strenuously to the cost motion. SMS responded with equal vigor. At the Board's request, SMS responded again on April 3, 1992, by providing documentation for its claim. After another round of argument, we closed the record. 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. Treasury does not contest a conclusion that SMS, as one of three protesters who contested these actions, is surely an "appropriate interested party." Treasury does, however, make numerous arguments for rejecting all or parts of SMS's request for reimbursement. The principal reason urged for rejection of the entire request is that SMS has made false claims and certifications. "Such a denial," Treasury says, "would serve the saltatory [sic] purpose of warning litigants that to prevail on cost claims they will have to carefully and properly maintain records." Department of the Treasury's Response to SMS' Cost Claim (Oct. 31, 1991) (Treasury's Oct. 1991 Response) at 2. While we agree that such a warning would be salutary, the means that Treasury suggests for promoting it is so extreme as to be inequitable. SMS has documented most of its claim, and although we do not especially enjoy the task of scrutinizing incomplete records, our preference for more cerebral work is not good cause for denying the entire motion. Similarly, we are not taken by SMS's argument that we should excuse the failure to produce all documentation because nearly two years passed between the time when costs were allegedly incurred and the date on which receipts and invoices were requested by the Board. SMS Data Products Group, Inc.'s Supplemental Submission in Support of Its Motion and Amended Motion for Award of Protest Costs (Apr. 3, 1992) (SMS's Apr. 1992 Submission) at 2 n.2. The documentation should have been submitted with the initial cost motion; we do not award costs which are substantiated only by counsel's assertions. We award those costs that are reasonable and are supported by sufficient documentation. Rule 35(b). Retained attorneys' fees The principal portion of the claim is SMS's request for reimbursement of fees billed the firm for the services of retained counsel in prosecuting the protest. Insofar as this part of the claim is concerned, Treasury has four objections. First, the agency notes that the hourly rate billed by SMS's lead counsel was $325 and maintains that this rate is excessive. Treasury suggests that no rate above $200 be approved. This objection is not properly focused because SMS is not seeking reimbursement for any costs associated with the small amount of time devoted to the case by the attorney who billed at $325 per hour. The attorney who actually directed Williams & Connolly's work in the protest billed at only $250 per hour. As we held in Sysorex Information Systems, Inc. v. Department of the Treasury, GSBCA 10781-C(10642-P)-REIN (Sept. 8, 1992) (full Board), slip op. at 3, the reasonableness of an attorney's billing rate is not subject to an arbitrary cap; it is determined by the Board, taking into consideration rates prevailing in the relevant community, the complexity of the case, and the skill the lawyer brought to the litigation. The rates prevailing in Washington, D.C., at the time of this protest, as specified in Sysorex v. Treasury, went far above $250 per hour. This case involved highly complex technological matters, and Mr. Peters, who headed SMS's litigation team, demonstrated great skill in dealing with them. We find that in these circumstances, the rate he charged was reasonable. Treasury's second objection in this area is that the descriptions given by Williams & Connolly attorneys of their work on certain days is inadequate to show the Board that the time was actually spent on protest-related activities. Among these descriptions are such cryptic headings as "work on all aspects of case, 16.00 hours" and "work on bid protest, 10.00 hours." We agree with the agency that fuller explanations are preferable. Indeed, when a lawyer provides such skimpy documentation, we can award costs only if we have independent reason to believe that the hours claimed were actually, and reasonably, devoted to the protest. Here, SMS is exceedingly fortunate; there are two independent guides which persuade us to reach such a conclusion. First, we know through personal observation -- made during many prehearing conferences and through four long, grueling days of hearing -- that these attorneys were intimately familiar with the detailed issues involved. Only a lawyer who had spent the hours claimed on the protest could possibly have understood the issues as well as these counsel did. Second, we have a "lodestar" for the number of hours appropriately devoted to the case: the lawyers for fellow-protester Sysorex Information Systems, Inc. spent even more hours on the protest, and without objection, we have ordered reimbursement for their costs. Sysorex v. Treasury, slip op. at 3; see also Horizon Data Corp. v. Department of the Navy, GSBCA 11018-C(10831-P), 92-2 BCA 24,852, at 112,978-79, 1992 BPD 49, at 5-7 (using economical fellow-protester's attorneys' costs as lodestar). Treasury's third objection to the request for reimbursement of retained attorneys' fees is that "a number of specific items billed [for attorney fees] have no correlation with this bid protest." Treasury's Oct. 1991 Response at 1-2. The agency provides a list of such items. The list, however, as Treasury admits, "is only from the period after the protest in this matter was decided." The agency says, "We can only assume that similar false billing occurred in the larger, earlier period as well." Id. at 2. As stated below, we award no attorney fees or costs for the period after the protest was decided (when the matter was on appeal to the Federal Circuit). As for the period during which the protest was at the Board, we do not assess the rectitude of billings on the basis of assumptions; if an agency is serious about challenging a cost motion, we expect it to give us specific instances and reasons for contesting reimbursement. We have found no false billings for attorney fees here. The agency's fourth and last objection regarding retained attorneys' fees is that counsel who were originally engaged by SMS (and who withdrew from the case when they discovered a conflict of interest) devoted an excessive number of hours to drafting the protest (32.5 hours) and the notice of intervention in Sysorex's protest (4.5 hours). If writing the documents themselves were all that had been involved in these tasks, we would agree with the agency. Having viewed the entire protest litigation, however, we consider it apparent that substantial education as to the requirements of the solicitation and the technological intricacies of the goods involved in the procurement, and making judgments about which matters to pursue, were necessary prerequisites to writing the documents. This time is compensable. We do not find the hours cited by Treasury to be excessive. We do make one reduction from the amount claimed for retained attorneys' fees, however. A summer associate at Williams & Connolly spent eighty-five hours researching an allegation that the contract award violated the Trade Agreements Act of 1979. SMS did not mention this issue in its protest, and neither of the other two protesters pursued it. Sysorex, 90-3 BCA at 116,375, 1990 BPD 193, at 26. "Where the plaintiff has failed to prevail on a claim that is distinct in all respects from his successful claims, the hours spent on his unsuccessful claim should be excluded in considering the amount of a reasonable fee." Hensley v. Eckerhart, 461 U.S. 424, 440 (1983). We exclude the hours devoted by the summer associate to this particular matter -- as well as the half hour spent by a librarian assisting in her research. This decreases the award by $5,570. SMS seeks reimbursement of $232,981.75 in fees charged by retained counsel. Of this amount, we award $227,411.75. Costs on appeal; consultants' fees; salaries of corporate employees Three of the principal issues in this case have been resolved by us in recent full Board decisions. Relying on those decisions, we reject without further comment, except as provided below, SMS's request for reimbursement of costs associated with defense of other parties' appeals of the underlying protest decision, consultants who assisted in the prosecution of the protest, and salaries of protester's own personnel who contributed to that prosecution. Sysorex v. Treasury; Sterling Federal Systems, Inc. v. National Aeronautics and Space Administration, GSBCA 10000-C(9835-P), 1992 BPD 141 (May 22, 1992) (full Board). SMS seeks reimbursement of $25,853.21 in costs associated with the employment of consultants. In accordance with our holding in Sterling Federal, we award only the following portion of this amount. Two experts testified in this case on behalf of SMS. Each of these gentlemen provided testimony in deposition and at hearing; at hearing, one of them took the stand on one day, and the other took it on two separate dates. For each of these five person-days, SMS is entitled to reimbursement of $30 in witness fees.1 In addition, SMS is entitled to reimbursement for expenses incurred by the witnesses. The experts spent $243.71 to buy several reference books specifically for use in this protest. One of the witnesses also incurred parking fees of $48.50. All these expenses were billed to SMS. We consider these costs to have been reasonable and necessary to the prosecution of the case, and therefore award them to SMS. See Gallegos Research Group Corp., GSBCA 10125-C(9983-P), 90-1 BCA 22,609, at 113,448-49, 1990 BPD 21, at 4-5 (allowing reimbursement for books purchased specifically for protest). The total amount awarded for expert witnesses is $442.21.2 Among the costs of employees' salaries claimed by SMS is $9,198.11 of the salary of in-house counsel. The Board has previously awarded such costs. See, e.g., InSyst Corp., GSBCA 10093-P(9946-P), 91-1 BCA 23,336, at 117,031-32, 1990 BPD 265, at 4; InSyst Corp., GSBCA 10143-C(10032-P), 90-1 BCA 22,464, 1989 BPD 361. In Sterling Federal, we held that the salaries earned by a protester's employees for hours spent on protest-related activities are generally not compensable under the Brooks Act. We specifically did not address, however, the issue of our authority to grant recovery of in-house attorney costs as attorney fees. 1992 BPD 141, at 11 n.3. We face a conundrum here: the statute authorizes the payment of attorney fees, but not the salaries of corporate employees; how, in this context, should we deal with the salary of a corporate employee who is the firm's attorney? In other contexts, the authorization for reimbursement of attorney fees has been held to cover the costs of in-house counsel. PPG Industries, Inc. v. Celanese Polymer Specialties Co., 840 F.2d 1565, 1570 (Fed. Cir. 1988); Consumers Union of United States, Inc. v. American Bar Association, 470 F.Supp. 1055, 1062 (E.D. Va. 1979), vacated & remanded on other grounds, 446 U.S. 719 (1980); Spectrum Leasing Corp. v. General Services Administration, GSBCA 10902-C(7347), et al. (July 27, 1992), slip op. at 9. We follow these holdings in continuing to allow reimbursement of such costs when incurred in a Brooks Act protest proceeding. International Business Machines Corp. v. Department of the Treasury, GSBCA 11605-C(11359-P) (Aug. 21, 1992), at 4. We see no reason to reconsider our prior decisions in this matter. ____________________ 1 As noted in Sterling Federal and applied in Sysorex v. ________________ __________ Treasury, we use the daily statutory witness fee amount that was ________ in effect when the testimony occurred. 2 One of the experts also billed SMS $11 for items identified only as "misc." We have no way of knowing the identity of or need for these items, and therefore do not award reimbursement of their cost. SMS has properly charged for in-house counsel's time at cost (salary plus benefits). (Properly allocated overhead would also have been an appropriate charge.) PPG Industries, 840 F.2d at 1570; Goodrich v. Department of the Navy, 733 F.2d 1578, 1579 (Fed. Cir. 1984), cert. denied, 469 U.S. 1189 (1985). The documentation of time devoted by this attorney to this protest is inadequate, however. Counsel has given us his contemporaneous timesheets, on which he recorded on a daily basis the number of hours associated with each project to which he was assigned. For many of the days, there is included an entry for this protest. What he actually did with regard to the protest is not specified, however, and because the Board dealt with retained counsel, rather than him, in the course of the litigation, we have no personal knowledge of his activities. We do note that on fourteen days, prior to issuance of our decision, retained counsel show on their timesheets that they engaged in some sort of joint effort (such as a telephone conversation or a meeting) with him. The total number of hours on their timesheets represents about three quarters of the time shown on his timesheets as being devoted to the protest on those days, and one quarter of the total amount of time shown in his records as being devoted to the protest. Using this information as a guide, we reduce the total amount sought by fifty percent because of the poor documentation. Kennecott Corp. v. Environmental Protection Administration, 804 F.2d 763, 768 (D.C. Cir. 1986); Cauley v. Wilson, 754 F.2d 769, 772 (7th Cir. 1985); Grendel's Den, Inc. v. Larkin, 749 F.2d 945, 951-52 (1st Cir. 1984); National Association of Concerned Veterans v. Secretary of Defense, 675 F.2d 1319, 1327-28 (D.C. Cir. 1982). The amount awarded as in- house counsel's fees is $4,599.3 We also award $211.60 in expenses incurred by in-house counsel (mileage, parking fees, tolls, subway fares) in furtherance of the litigation -- all of which is properly documented. Disbursements We additionally award costs incurred expressly for the protest. We list these costs in the order stated in SMS's initial cost motion, showing the amount requested and then (if less than the first number) the amount for which documentation has been provided. Only the second amounts are awarded: postage, $79.20 and zero; messenger service, $546.57 and $357.92; long- distance telephone service, $63.34; binders, $58.61 and $42.96; deposition transcripts, $7,012.38; hearing transcripts, $5,965; computer research, $3,815.01 and $3,251.60; taxi and parking, $490.80 and $230.30; photocopying, $13,700.75; meals, $653.19 and $590.85; computer part for trial exhibit (net value after reselling item as used), $331; computer program offered by Sears ____________________ 3 This figure is not precisely half of the amount sought. We deleted from that amount, prior to making the fifty percent reduction, all costs claimed for the period of time after the appeals to the Federal Circuit were initiated. for examination by experts (including shipping), $719.50; rental of scale used in trial presentation (including shipping), $159. We decline SMS's invitation to reimburse it for the cost of unspecified publications ($9.49) and books ($95.10); we have no idea of the identity of these items or the need for them. SMS asks that we award it the cost of film and photographic supplies in the amount of $82.35; because only a few photographs were ever introduced as exhibits, we find that this sum is excessive and award only $20 of it. The total amount awarded for disbursements is $32,444.60. We comment on the above items in response to Treasury's objections. No reimbursement is allowed for postage because all documentation of such charges is for dates during which the protest decision was on appeal to the Federal Circuit. We allow for messenger service an amount which includes costs incurred in making some deliveries to Williams & Connolly from law firms and companies which have no obvious connection to this protest. Williams & Connolly has explained that these institutions maintain libraries from which it copied or borrowed materials relevant to the case, and that the sharing of library resources is generally less expensive than retrieving documents from computerized data bases. SMS Data Products Group, Inc.'s Response to Treasury's Response to SMS' Supplemental Submission (Apr. 21, 1992) at 3, Exhibit 1. Costs of making these materials available to counsel are directly related to the litigation and are consequently recoverable. Williams & Connolly's billing for long-distance telephone service and computer research does not involve standard commercial charges. For each category, Williams & Connolly received discounted billing from suppliers and then added a surcharge. For telephone calls, the surcharge is said to cover the cost of amortization of the law firm's own equipment. For computer research, the additional charge is said to cover amortization of equipment, subscription fees, and library staff labor. The resulting bills to the client, SMS, approximated commercial charges. SMS's Apr. 1992 Submission at Exhibit A, 5, 9. We have held that where a law firm bills a client for items other than attorneys' time by imposing a high fee that bears no relation to the commercial charges the firm paid for the items, we will not award reimbursement for those items. HSQ Technology, Inc., GSBCA 10054-C(9985-P), 89-3 BCA 22,047, at 110,926, 1989 BPD 185, at 3. In the instant case, however, Williams & Connolly's billings to SMS are no more than standard commercial charges. Although the composition of the charges is unorthodox, the charges themselves are standard. We therefore permit reimbursement of SMS's costs of long-distance telephone calls and computer research at the requested rates. The amount awarded is less than the amount sought, with regard to computer research, because the documented costs (even with the Williams & Connolly surcharge) equal the smaller amount. The meals for whose cost SMS seeks reimbursement were for retained counsel's support personnel who worked extended evening overtime hours at an attorney's request. SMS's Apr. 1992 Submission, Exhibit A, 10. The Board has in the past, without comment, permitted recovery of the costs of meals. See, e.g., Cabletron Systems, Inc. v. Department of the Treasury, GSBCA 10770-C(10632-P), 92-2 BCA 24,946, 1992 BPD 80; Government Technology Services, Inc. v. Department of the Navy, GSBCA 11174-C(10991-P), 92-2 BCA 24,898, 1992 BPD 76; U.S. West Information Systems, Inc., GSBCA 9114-C (8995-P), 89-2 BCA 21,774, at 109,557, 1989 BPD 119, at 8. We consider that the cost of meals is in this instance a component of overtime, and as such is a miscellaneous business expense incurred solely because of the litigation. This cost is awarded to SMS. SMS withdrew its request for reimbursement of costs of secretarial overtime, word processing, facsimile transmission, and facilities costs. SMS Data Products Group, Inc.'s Motion for Award of Protest Costs and Proposal Preparation Costs (Aug. 17, 1990), Exhibit 2 at Summary of Services Rendered (secretarial overtime, word processing); Reply Memorandum in Support of SMS' Protest Cost Claim (Nov. 15, 1991) at 6 n.3 (facsimile transmission); Id. at 5 n.2 (facilities costs). Summary The following amounts are awarded to SMS: Attorney fees (retained counsel) $227,411.75 Consultants' fees and expenses 442.21 Attorney fees (in-house counsel) 4,599.00 Expenses (in-house counsel) 211.60 Other disbursements 32,444.60 Total $265,109.16 Decision SMS's motion for costs is GRANTED IN PART. We award to SMS $265,109.16, 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). _________________________ STEPHEN M. DANIELS Board Judge We concur: _________________________ _________________________ VINCENT A. LaBELLA EDWIN B. NEILL Board Judge Board Judge