__________________________________ GRANTED: September 16, 1992 __________________________________ GSBCA 11733-C(11629-P) AST RESEARCH, INC., Protester, v. DEPARTMENT OF THE AIR FORCE, Respondent. Richard S. Ewing and James A. Dobkin of Arnold & Porter, Washington, DC, counsel for Protester/Intervenor AST Research, Inc. Clarence D. Long, III and Joseph M. Goldstein, Office of General Counsel, Department of the Air Force, Washington, DC, counsel for Respondent. Before Board Judges LaBELLA, Acting Chief Judge, NEILL, and HYATT. HYATT, Board Judge. Pursuant to Rule 35 of the Board's Rules of Procedure, AST Research, Inc. has timely moved for an award of its costs, including reasonable attorney fees, incurred in the pursuit of the subject protest. The protest challenged awards by the Department of the Air Force of two contracts, to CompuAdd Corporation and Sysorex Information Systems, Inc., for the acquisition of microcomputer systems to support general purpose applications, including standard office automation functions such as word processing, data base management, and business graphics. The awards were made under a procurement commonly referred to as "Desktop IV." The AST protest, which was filed on November 26, 1991, was consolidated with seven other protests also involving the Desktop IV procurement. The protests alleged that the awards to CompuAdd and Sysorex were in violation of applicable statute, regulation, and the agency's delegation of procurement authority for a number of reasons. AST contended that the Air Force improperly determined that its proposal was ineligible for award and abused its discretion in not conducting discussions prior to making an award. AST requested, by way of relief, that the Board grant its protest and direct the Air Force either to consider AST's proposal or alternatively to establish a competitive range and conduct discussions with the offerors in that range prior to seeking best and final offers. The protesters, respondent, and intervenor/awardees conducted extensive written discovery and depositions. On January 7, 1992, the parties filed a joint motion to dismiss all eight protests. The settlement entered into jointly among all the parties included, among other provisions, agreements by the Air Force 1) to terminate the contracts awarded and to cancel any delivery orders issued under those contracts; 2) to review the solicitation and to amend its terms so as to clarify the requirements that were the subject of these protests; 3) to issue clarification requests (CRs) and deficiency reports (DRs) based upon evaluations of initial proposals of offerors involved in the protests; 4) to permit each offeror in the competitive range to submit revised proposals in response to the solicitation amendments and CRs and DRs; and 5) to establish a reasonable due date for submission of revised proposals. In addition, the settlement agreement contained the following pertinent provision: The Air Force agrees that for purposes of recovering protest costs, including reasonable attorneys' fees and disbursements, protesters shall be deemed to have prevailed on the merits in this proceeding under 40 U.S.C. 759(f)(5)(C). The parties agree, in compromise of protester's claims, that each protester may recover seventy-five percent (75%) of its total protest costs, including attorneys' fees and disbursements, incurred in these proceedings. Protesters shall follow the procedures of Rules 35 and 36 of the Board's Rules of Procedure in seeking recovery of these costs. The consolidated protests were dismissed on January 8, 1992. Apple Computer, Inc. v. Department of the Air Force, GSBCA 11161-P, et al., 1992 BPD 9 (Jan. 8, 1992). On February 21, 1992, AST filed its motion, seeking recovery of $126,146.34 in protest costs. The total costs incurred in pursuit of AST's protest, and documented in its motion, amounted to $168,195.13. These included fees for professional services rendered by AST's retained counsel, various expenses and out-of-pocket disbursements documented by retained counsel,[foot #] 1 payments to expert consultants, and in-house costs incurred by AST. The Air Force has not opposed the motion. Discussion Under the Brooks Act, in protests where the Board has found that an agency has violated statute, regulation, or the conditions of a delegation of procurement authority, it "may . . . 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) (1988). The Board, relying on Hensley v. Eckerhart, 461 U.S. 424, 433 (1983), has construed this provision to permit an award of protest costs to a "prevailing party," that is, one that has succeeded on any significant issue that achieves some of the benefit the party sought in bringing the protest. E.g., Julie Research Laboratories, Inc., GSBCA 9693-C(9474-P), 91-1 BCA 23,389, 1990 BPD 345; NCR Comten, Inc., GSBCA 8229-C(8091-P), 86-2 BCA 18,822, at 94,852, 1986 BPD 24, at 10. Here, the Air Force stipulated in the joint settlement agreement that protester is a prevailing party. Moreover, the terms of the stipulation provide virtually all of the relief that AST had sought. As such, we deem AST to be an appropriate interested party entitled to recover its costs of pursuing the protest. In the case of AST, a further issue arises as a result of the recent full Board decision rendered in Sterling Federal Systems, Inc. v. National Aeronautics and Space Administration, GSBCA 10000-C(9835-P), 1992 BPD 141 (May 22, 1992), in which the Board held that it is without authority to award the expenses, fees, or salaries of expert consultants and in-house personnel in protest cases, unless those costs qualify as taxable costs under 28 U.S.C. 1920. The Board requested that all of the Desktop IV parties presently pursuing a cost claim provide input with respect to the extent, if any, to which this decision might affect an award of costs. AST responded that its total protest costs of $168,195.13 included the amounts of $2,775.00 in expert consultant fees and some $130.90 in in-house costs in excess of applicable per diems established by statute.[foot #] 2 The Air Force, in a letter ----------- FOOTNOTE BEGINS --------- [foot #] 1 Expenses and disbursements include such items as courier expenses, duplication costs, computer research charges, out-of-town travel costs, and the like. [foot #] 2 AST's total costs also included certain costs of in-house counsel. In Sterling Federal the Board expressly _________________ noted that it was not required to decide, and thus did not address, the issue of whether the allocable salary costs of in- house counsel could be awarded under the rubric of "attorney's (continued...) ----------- FOOTNOTE ENDS ----------- submitted on July 13, 1992, by its new counsel, stated that it preferred to take no position insofar as advising the Board as to the impact of Sterling Federal, but did confirm that the settlement agreement was premised on the parties' mutual understanding that "total protest costs" would include all costs recoverable under the law as it existed at the time of settlement. In these circumstances, we believe it is both possible and appropriate to give full effect to the settlement agreement of the parties while at the same time adhering to the ruling in Sterling Federal.[foot #] 3 The costs which are no longer recoverable under Sterling Federal amount to substantially less than twenty-five percent of the total costs incurred. Thus, an award to AST of seventy-five percent of total costs, an amount the Air Force agreed to, does not result in recovery of any costs which the Board under Sterling Federal is not authorized to award. Protester has submitted appropriate documentation justifying the legal fees and expenses incurred in pursuing the consolidated protests. We find that the costs incurred and claimed by protester were reasonable. ----------- FOOTNOTE BEGINS --------- [foot #] 2 (...continued) fees." Id., 1992 BPD 141, at 11 n.3. We note that this issue __ has now been addressed in two recent Board decisions, both affirming that these costs may be awarded under the Brooks Act. See SMS Data Products Group, Inc. v. Department of the Treasury, ----------- FOOTNOTE BEGINS --------- GSBCA 10783-C(10644-P)-REIN, slip op. at 6 (Sept. 10, 1992); International Business Machines Corp. v. Department of the ----------- FOOTNOTE BEGINS --------- Treasury, GSBCA 11605-C(11359-P), slip op. at 4 n.2 (Aug. 21, ________ 1992). [foot #] 3 Indeed, the Board has already held, in addressing the impact of Sterling Federal on another cost _________________ application, that the stipulation of the parties should and will be effectuated "to the greatest possible degree consistent with our statutory authority." International Business Machines Corp. _____________________________________ v. Department of the Treasury, GSBCA 11605-C(11359-P), slip op. ______________________________ at 3-4 (Aug. 21, 1992). At the same time, the Board is obligated to follow the outcome in Sterling Federal and is not permitted, ________________ regardless of what the terms of a settlement agreement between the parties might provide, to award items of cost that are not authorized by statute. Id. at 3. __ ----------- FOOTNOTE ENDS ----------- Decision Protester's motion for reimbursement of costs in the amount of $126,146.34 is GRANTED. This award may 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). _____________________________ CATHERINE B. HYATT Board Judge We concur: ___________________________ _____________________________ VINCENT A. LaBELLA EDWIN B. NEILL Acting Chief Board Judge Board Judge