DENIED: November 4, 1994 GSBCA 11336-C(11214-P) INTEGRATED SYSTEMS GROUP, INC., Protester, v. DEPARTMENT OF THE TREASURY, Respondent, and MEMOREX TELEX CORPORATION, Intervenor. Stephen L. Mills, Vice President, Marketing, of Integrated Systems Group, Inc., Vienna, VA, appearing for Protester. Barbara Harris Vail and Arthur I. Rettinger, U.S. Customs Service, Department of the Treasury, Washington, DC, counsel for Respondent. William A. Roberts III, Lee Curtis, and Brian A. Darst of Howrey & Simon, Washington, DC, counsel for Intervenor. Before Board Judges DANIELS (Chairman), PARKER, and DEVINE. DANIELS, Board Judge. The Board denied a protest brought by Integrated Systems Group, Inc. (ISG), which alleged that a Government agency's request for proposals to supply computer hardware and software contained ambiguous and restrictive specifications. The agency in question was the U. S. Customs Service, a bureau of the Department of the Treasury. Integrated Systems Group, Inc., GSBCA 11214-P, 91-3 BCA 24,155, 1991 BPD 140. The decision was written by a panel of judges none of whom is presently a member of the Board. Integrated Systems Group, Inc. v. Department of the Treasury, GSBCA 11214-P-R (Oct. 6, 1994). The Board's decision used particularly strong language in criticizing protester's positions. It called them "bogus," "totally without merit," "nothing more than an allegation designed to cozen this Board into [a] false belief," "simply disingenuous," "fictitious," and "make-believe." The decision called protester's determination to file and proceed with the case "a blatant abuse of the protest process." 91-3 BCA 24,155, 1991 BPD 140. Memorex Telex Corporation intervened in the case on the side of the Government. In its posthearing brief, the intervenor moved for monetary sanctions against protester. Memorex Telex maintained that because the protest was clearly filed in bad faith and with the knowledge that ISG had no valid basis of protest, ISG should be required to reimburse Memorex Telex for its costs of defending the protest, including the attorney fees incurred. The panel of judges to which the case was assigned did not rule on this motion. After the case was decided, the Government filed its own motion for imposition of monetary sanctions against protester, asking that the Board require ISG to pay the costs the Government incurred in defending a protest which had been brought in bad faith. The Board docketed the Government's motion as GSBCA 11336-C(11214-P). Earlier this month, in dismissing protester's motion for reconsideration of the panel's decision, we informed the parties that both sanctions motions would be considered under docket number 11336-C(11214-P). That case is being resolved in the present opinion by a new panel of judges. Discussion Although the two motions are founded on the same theory, the fact that they are brought by two different parties is important to our analysis. Memorex Telex, the intervenor in the case, asks us to order one private party to the protest to transfer money to another private party. The Board's authority is limited to that granted by statute. Sterling Federal Systems, Inc. v. Goldin, 16 F.3d 1177, 1186 (Fed. Cir. 1994); SMS Data Products Group, Inc. v. Austin, 940 F.2d 1514, 1517 (Fed. Cir. 1991); ViON Corp. v. United States, 906 F.2d 1564, 1567 (Fed. Cir. 1990). Statute vests in us the power to resolve disputes between the Government and certain private parties in certain circumstances. 40 U.S.C. 759(f) (1988); 41 U.S.C.A. 606, 607 (1994). The law does not permit us to resolve disputes between two private parties. Although we allow intervention in protests which are filed with us, an intervenor must take a position either for or against the Government's position as to each count; an intervenor may not use the protest process to litigate against another private party. Rule 5(a)(4), (b)(4).[foot #] 1 Memorex Telex's choice to volunteer in support of the Government in this case does not confer on us the power to adjudicate rights between Memorex Telex and ISG.[foot #] 2 The intervenor's motion must be denied, without regard to whether ISG brought this protest in bad faith or not. The Government's motion is not susceptible to such summary treatment. With regard to a similar motion made by another agency, this Board held five years ago that it "has the authority to impose sanctions, including awards of reasonable attorneys fees and other costs, against parties and attorneys who litigate in bad faith." International Technology Corp., GSBCA 10056-C(10010-P), 90-1 BCA 22,341, at 112,283, 1990 BPD 2, at 5 (1989). We concluded in that decision that this power derived from our inherent authority to control our docket. Noting that we had dismissed a protest for failure of a party to litigate in good faith, we made the following statement: "It makes no sense that we could, as a sanction for abuse of our process, dismiss a protest involving a multi-million dollar procurement, yet could not make an award of attorney fees totalling in the thousands." 90-1 BCA at 112,283, 1990 BPD 2, at 5-6. The year after we issued this decision, the Court of Appeals for the Federal Circuit held that because the authority to dismiss a protest, based on a finding that the case was brought in bad faith, is not explicitly given to the Board by statute, we do not have that authority. ViON Corp., 906 F.2d at 1567; Sysorex Information Systems, Inc., GSBCA 10642-P, et al., 90-3 BCA 23,083, 1990 BPD 164. Thus, the Court eliminated the legal underpinning for our decision in International Technology. During the current year, while writing legislation dealing with Federal Government procurement generally, the Congress considered in detail whether the statute dealing with protests to this Board should be amended to deal with bad faith protests. The Senate addressed the subject in two ways. First, it proposed amending the law to provide specifically that "[t]he board may dismiss a protest that the board determines . . . has been brought in bad faith." Congressional Record, June 9, 1994 (daily ----------- FOOTNOTE BEGINS --------- [foot #] 1 To be codified at 48 CFR 6101.5(a)(4), (b)(4) (58 Fed. Reg. 69,246, 69,253-54 (Dec. 30, 1993)). [foot #] 2 We note in this regard that even where the Board does have the authority to award costs, and those costs are of a protester whose attorney fees were increased by the need to respond to an intervenor's discovery requests, our authority is properly exercised by requiring the Government, not the intervenor, to reimburse the protester for the costs. United ______ States v. Compusearch Software Systems, 936 F.2d 564 (Fed. Cir. _______________________________________ 1991). ----------- FOOTNOTE ENDS ----------- ed.), at S6721 ( 1434). Second, the Senate would have required that the Board's Rules of Procedure -- shall provide that if the board expressly finds that a protest or a portion of a protest is frivolous or has not been brought or pursued in good faith, or that any person has willfully abused the board's process during the course of a protest, the board may impose appropriate procedural sanctions, including dismissal of the protest. Id. ( 1438). The bill then went to the House of Representatives, which passed it in a form that included the same authority to dismiss bad faith protests. Congressional Record, June 27, 1994 (daily ed.), at H5014 ( 1434). The House's authorization to sanction protesters went further than the Senate's, however. In addition to permitting "appropriate procedural sanctions, including dismissal of the protest," for abuse of the board's process, the House bill provided: If the board makes a determination [to dismiss a protest that the board determines is frivolous, has been brought in bad faith, or does not state on its face a valid basis for protest], the board may impose appropriate sanctions. Such sanctions may include imposition of liability on the protester, or other interested party who joins the protest, for payment to the United States of all or that portion of the United States costs, for which such a finding is made, of reviewing the protest, including the fees and other expenses . . . incurred by the United States in defending the protest. Id. at H5014-15 ( 1434). The conference committee on this legislation incorporated in the compromise bill authority for the Board to dismiss protests which have been brought or pursued in bad faith. H.R. Rept. No. 712, 103d Cong., 2d Sess. (1994) at 53 ( 1434). The conferees explicitly chose to adopt the Senate's position, and not the House's, with regard to monetary sanctions, however. Id. at 193. Section 1437, as proposed by the committee and enacted as part of Public Law 103-355, states: The [Board's Rules of Procedure] shall provide that if the board expressly finds that a protest or a portion of a protest is frivolous or has been brought or pursued in bad faith, or that any person has willfully abused the board's process during the course of a protest, the board may impose appropriate procedural sanctions, including dismissal of the protest. Id. at 54. The provisions of the Act described above will take effect on October 1, 1995, or such earlier date as may be prescribed by the Board in regulations. Id. at 167-69 ( 10001, 10002). Taking into account the foregoing history, here is the situation at the present time with regard to the Board's authority to impose monetary sanctions against protesters who come here in bad faith. In 1989, we concluded that we had this authority, based on a determination that if we could dismiss a bad faith protest as a matter of docket control, we could also impose a lesser sanction such as a monetary fine. The following year, the Court of Appeals eliminated the underpinning of that decision by holding that we could not dismiss a protest simply because the case had been brought in bad faith. In 1994, the Congress effectively overruled the Court's holding by empowering us to dismiss a bad faith protest. At the same time, however, the Congress specifically limited the sanctions which could be imposed on a bad faith protester to "procedural" sanctions. The new statutory provisions are not in effect yet, but they will be soon. The history does not indicate decisively whether we currently have authority to impose monetary sanctions against a protester who files or pursues a case in bad faith. It does show that our original reason for concluding that we have this authority is invalid, however. Thus, if we do have the power, it must be based on a theory not heretofore expressed in our decisions. The Government cites a number of cases involving inherent authority to impose monetary sanctions, but because they all involve Federal courts, and we do not have a court's inherent authority in this regard, under the Federal Circuit's consistent analysis, the holdings of these cases are not applicable to us. As a result of Congressional action, within the next few months, the Board will clearly not have the authority the Government wishes us to exercise. Although the new statute is not yet in effect, we choose to follow the intent of Congress that we not impose monetary sanctions. We decline to consider whether we possess the power to impose them at this very moment. Consequently, we also do not consider whether the protest was filed or prosecuted in bad faith. Decision The motions filed by Memorex Telex and the Government for the imposition of monetary sanctions against the protester are DENIED. _________________________ STEPHEN M. DANIELS Board Judge I concur: _________________________ ROBERT W. PARKER Board Judge DEVINE, Board Judge, concurring. I fully agree with the result reached by the majority but not with its reasons for reaching it. The protest decision in which this Board asserted the authority to fine a litigant appearing before it was wrong when decided and it is still wrong now. It will continue to be wrong until Congress gives us express statutory power to impose fines. This is so because this Board has only those powers specifically granted to it by Congress, together with those powers that can be directly inferred as necessary to carry out the grant. By statute we have the power to hear and decide the matters that come before us; we are empowered to administer oaths and to summon witnesses. However if our subpoena is not obeyed we need the help of a constitutional court to enforce it. A constitutional court, by contrast, has the power to fine or jail for contempt those who disobey its orders. This is the major power difference between this Board and a court. The power to fine or jail a litigant in order to enforce compliance with a decree (the civil contempt power), or to punish for a disobedience (the criminal contempt power) is the essence of a court's control over its litigants. It arises from the inherent power of a court to control the persons and causes of those who come before it and has been exercised by constitutional courts for a great many years. This Board, however, is not a constitutional court and thus has no contempt power, and therefore no power to levy fines for any reason. It has no power to punish the person of the recalcitrant litigant but it does have the power to control the cases of those who appear before it. This is the only method it has to control its proceedings. If its orders are not obeyed its only recourse is to do harm to a recalcitrant litigant's case by dismissing it or by imposing less severe sanctions. Those less severe sanctions, however, do not include fines. ______________________________ DONALD W. DEVINE Board Judge