THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN ITS ENTIRETY ON AUGUST 18, 1994 ____________________________________________________ DISMISSED FOR LACK OF JURISDICTION: July 27, 1994 ____________________________________________________ GSBCA 11863-C(11498-P) NETWORK SOLUTIONS, INC., Protester, v. DEPARTMENT OF THE AIR FORCE, Respondent. Richard J. Conway, James C. Hughes, William F. Savarino, J. Andrew Jackson, and C. Patteson Cardwell IV of Dickstein, Shapiro & Morin, Vienna, VA; and Michele R. Cappello of Network Solutions, Inc., Herndon, VA, counsel for Protester. Clarence D. Long, III, Joseph M. McDade, Joseph M. Goldstein, and Keith Davis, Office of the General Counsel, Department of the Air Force, Washington, DC, counsel for Respondent. Before Board Judges HYATT, WILLIAMS, and DeGRAFF.[foot #] 1 WILLIAMS, Board Judge. Background Network Solutions, Inc. (NSI) and PRC, Inc. (PRC) protested on multiple grounds the Department of the Air Force's (Air Force's) award of the local area networks for systems engineering ----------- FOOTNOTE BEGINS --------- [foot #] 1 Board Judge Vincent A. LaBella, who was on the panel in this case, died on April 11, 1994. A random selection from the remaining judges resulted in his replacement by Board Judge Robert W. Parker. Due to an extended absence, Judge Parker was replaced by Board Judge Martha H. DeGraff, via a random selection. ----------- FOOTNOTE ENDS ----------- installation and integration (LAN SEII) contract to Electronic Data Systems Corporation (EDS).[foot #] 2 The Board granted the protests on April 30, 1992, finding that: (1) the Air Force had performed an erroneous cost/technical tradeoff analysis, (2) EDS had an unfair competitive advantage by virtue of its prior performance of a LAN installation similar to a "sample task" which was part of the evaluation, and (3) PRC was wrongly downgraded for proposing products from General Services Administration (GSA) schedule contracts, when such products were acceptable and PRC could not use Air Force requirements contracts available to other offerors due to its inability to obtain alleged proprietary information. Network Solutions, Inc. v. Department of the Air Force, GSBCA 11498-P, et al., 92-3 BCA 25,083, 1992 BPD 131, vacated sub nom. Electronic Data Systems Corp. v. Rice, 988 F.2d 128 (Fed. Cir. 1992) (table) (text in Westlaw, 1992 WL 436547). In granting the protests, we revised the Air Force's delegation of procurement authority as follows: [T]he Air Force shall revise its solicitation to incorporate a neutral sample task, refrain from downgrading offerors who, due to unavailability of alleged proprietary information were unable to use Air Force requirements contracts, and proceed to evaluate offerors and make award in accord with statute and regulation. The Air Force may, in resoliciting, waive the organizational conflict of interest rules in FAR 9.5, if such can be justified under FAR 9.503. Finally, the Air Force may acquire the government's LAN SEII requirements in any manner, consistent with statute, regulation, and its DPA. Network Solutions, Inc., 92-3 BCA at 125,049, 1992 BPD 131, at 55. On May 29, 1992, NSI filed a motion for reimbursement of costs incurred in protesting the LAN SEII procurement.[foot #] 3 On August 17, 1992, NSI entered into a joint stipulation with the Air Force under which the parties agreed that the United States would "pay the Protester $460,000.00 from the permanent indefinite judgment fund in full ----------- FOOTNOTE BEGINS --------- [foot #] 2 NSI and PRC filed their protests on October 7 and October 18, 1991, respectively. NSI intervened in PRC's protest, and EDS intervened in both protests. By order dated October 23, 1991, the Board consolidated the protests. [foot #] 3 As reflected in supplements to the original cost motion, NSI claimed total protest costs of $826,216. This amount includes NSI's proposal preparation costs as well as attorney fees and expenses incurred in preparing the cost motion. Supplement II to Rule 35 Motion of Protester Network Solutions, Inc., for Award of Protest Costs dated August 17, 1992, at 5. ----------- FOOTNOTE ENDS ----------- and final satisfaction of Protester's costs of filing and pursuing the Protest. . . ." Joint Stipulation of NSI and Air Force (Joint Stipulation) (August 17, 1992) 8. The parties had not reached an agreement over the $243,583.84 NSI sought for proposal costs, and they jointly requested a stay of all proceedings in connection with those costs. Id. 7. The stipulation further stated: Protester substantially prevailed in Network Solutions, Inc. and PRC, Inc. v. Department of the Air Force, GSBCA Nos. 11498-P, 11532-P (May 11, 1992). The Board's Decision materially altered the parties' legal relationship in a manner which Congress sought to promote in enacting the fee statute. 40 U.S.C. 759(f)(5)(C). Id. 1. The parties agreed that they would not seek reconsideration of, or appeal from, the Board's decision of the protest. Id. 9. On August 28, 1992, EDS appealed the Board's decision granting the protests of NSI and PRC to the United States Court of Appeals for the Federal Circuit (Federal Circuit).[foot #] 4 PRC intervened in the appeal. On September 14, 1992, the Air Force canceled the LAN SEII procurement by announcement in the Commerce Business Daily (CBD). The CBD announcement indicated that the project had been "redefined and incorporated into the ULANA [Unified Local Area Network Architecture] II acquisition" which had "been delayed due to a rebaselining of requirements and specifications." NSI's Brief entitled "Vacatur of the Board's Protest Decision Does Not Preclude Network Solutions from Recovering its Protest and Bid and Proposal Preparation Costs" (NSI's Brief on Vacatur) at 8. On October 16, 1992, PRC, an intervenor in the appeal, moved to dismiss EDS' appeal as moot, arguing that, due to the cancellation, neither EDS nor any other offeror would receive award of the LAN SEII contract. PRC further argued that while the appeal was moot, the NSI and PRC cost cases remained "alive" before this Board. The Federal Circuit found that the appeal was moot, and ruled in an unpublished order on December 2, 1992, that "[u]nder [United States v.] Munsingwear[, Inc.], 340 U.S. [36] at 39 [(1950)], the proper disposition of this appeal is vacatur of the Board's decision and remand with a direction to dismiss [PRC's] ----------- FOOTNOTE BEGINS --------- [foot #] 4 The Board informed the parties that it could not act on the cost motion while the appeal was pending. Conference Memorandum at 2 (Sept. 22, 1992). ----------- FOOTNOTE ENDS ----------- complaint."[foot #] 5 Electronic Data Systems Corp. v. Rice, No. 92-1151, 1992 WL 436547 (Fed. Cir. Dec. 2, 1992). The order further stated: (1) PRC's motion to dismiss is denied. (2) [PRC's] motion for leave to file a reply is granted. (3) The GSBCA's April 30, 1992 decision in GSBCA Nos. 11498-P and 11523-P is vacated. The case is remanded to the GSBCA with directions to dismiss [PRC's] complaint. (4) Each side shall bear its own costs. Id. On December 28, 1992, PRC filed a "Petition for Rehearing to Clarify the Court's December 2, 1992 Order, and Suggestion of Rehearing en Banc" (PRC's Petition for Rehearing). Specifically, PRC requested that the appellate court clarify its December 2, 1992, order by adding the following footnote: "This Order is not to be taken as affecting the right of Protesters PRC Inc. and Network Solutions, Inc. to recover protest and proposal costs as prevailing parties under the Brooks Act, 40 U.S.C. 759." PRC's Petition for Rehearing at 2. PRC pointed out that EDS' appeal did not address PRC's or NSI's entitlement to recover legal fees or proposal costs. Id. In the alternative, PRC sought a rehearing en banc. In its Suggestion for Rehearing En Banc, PRC requested that the Court of Appeals address "the following precedent setting question of exceptional importance": Whether vacatur of a decision sustaining a bid protest by the General Services Administration Board of Contract Appeals, based on lack of a case or controversy due to mootness of the appeal arising after the date of the Board's decision, could be misconstrued to deny the successful protester its right to recover protest and proposal costs under the Brooks Act, 40 U.S.C. 759. Petition for Rehearing at 11. By order dated January 21, 1993, the Court of Appeals summarily denied PRC's petition for rehearing to clarify the order, stating: ----------- FOOTNOTE BEGINS --------- [foot #] 5 This order directed the Board to dismiss "EDS' complaint," but by order dated December 15, 1992, the Court corrected this clerical error and directed dismissal of "PRC's complaint." ----------- FOOTNOTE ENDS ----------- Upon consideration of PRC's petition for rehearing of the court's December 2, 1992, order IT IS ORDERED THAT : PRC's petition for rehearing is denied. Electronic Data Systems Corp. v. Rice, No. 92-1511 (Fed. Cir. Jan. 21, 1993). On February 2, 1993, the Court denied PRC's suggestion for rehearing en banc, stating: A suggestion for rehearing in banc having been filed by the INTERVENOR, UPON CONSIDERATION THEREOF, it is ORDERED that the suggestion for rehearing in banc be, and the same hereby is, DECLINED. Electronic Data Systems v. Rice, No. 92-1511 (Fed. Cir. Feb. 2, 1993). Upon remand, we dismissed the protests of PRC and NSI. Network Solutions, Inc. v. Department of the Air Force, GSBCA 11498-P-REM, et al., 1993 BPD 45 (Feb. 10, 1993). Discussion This cost case arises in an unusual posture. The parties have signed a stipulation and ask the Board to enter an order consistent with their stipulation and award costs from the permanent indefinite judgment fund.[foot #] 6 However, the Board's underlying decision granting the protests was vacated by the Court of Appeals for the Federal Circuit, as a result of the Circuit's determination that the appellate case was moot. We are thus confronted with the novel question of whether the Board may award costs when the underlying decision granting the protest has been vacated. Because we may award costs only after we find a violation of law, regulation, or a delegation of procurement authority, and the Circuit's vacatur rendered our finding of such violation in this protest a nullity, we conclude that we lack a necessary predicate for awarding costs. Therefore, we dismiss NSI's cost case for lack of jurisdiction. The Circuit's Vacatur of the Board's Decision Prevents the Board from Awarding Costs Upon determining that EDS' appeal was moot, our appellate authority relied upon United States v. Munsingwear, Inc., ----------- FOOTNOTE BEGINS --------- [foot #] 6 The parties cannot obtain payment from the permanent indefinite judgment fund absent a Board order. 40 U.S.C. 759(f)(5)(C); 31 U.S.C. 1304. ----------- FOOTNOTE ENDS ----------- 340 U.S. 36 (1950), in vacating this Board's decision granting the protests of NSI and PRC. The Court stated: Given the Air Force's announcement that the LAN SEII procurement has been incorporated into a future acquisition, we agree with PRC that EDS' appeal is moot. Under Munsingwear, 340 U.S. at 39, the proper disposition of this appeal is vacatur of the Board's decision and remand with a direction to dismiss [PRC's] complaint. Electronic Data Systems Corp. v. Rice, 1992 WL 436547 (emphasis added). The Court in Munsingwear held that when a civil case becomes moot pending an appellate tribunal's decision on the merits, the "standard disposition" is to "vacate the judgment below and remand with a direction to dismiss." 340 U.S. at 38 n.1. The Court explained: That procedure clears the path for future relitigation of the issues between the parties and eliminates a judgment, review of which was prevented through happenstance. . . . . Our supervisory power over the judgments of the lower federal courts . . . is commonly utilized in precisely this situation to prevent a judgment, unreviewable because of mootness, from spawning any legal consequences. Id. at 40-41 (emphasis added). In its order vacating our decision, the Federal Circuit expressly recognized that PRC had argued that the Board's decision "should be undisturbed to protect the right of PRC and [NSI] . . . promptly to obtain reimbursement of legal fees and expenses to which they are entitled under the Brooks Act." Electronic Data Systems Corp. v. Rice, 1992 WL 436547. Nevertheless, the Court's vacatur order made no mention that the parties could pursue their cost cases. Rather, when formally asked to clarify its order to acknowledge protesters' right to pursue fees, our appellate authority declined to do so without elaboration. The Federal Circuit thus did not qualify its vacatur order as PRC requested and as other courts have done, but instead directed this Board to dismiss protesters' complaints. See, e.g., Crowell v. Mader, 444 U.S. 505 (1980) ("[W]e direct that the judgment of the District Court be vacated without prejudice to such further proceedings in the District Court as may be appropriate.") (citation omitted). In the alternative, the Court might have dismissed the appeal without vacating the Board's judgment. See, e.g., Constagny, Brooks & Smith v. National Labor Relations Board, 851 F.2d 839, 842 (6th Cir. 1988) ("It would be particularly inappropriate to vacate the district court's order . . . in light of appellee's motion for attorney's fees pending before the district court, disposition of which joins in issue Constagny's success in pursuing the action . . . in the trial court."); cf. Williams v. Alioto, 625 F.2d 845, 848 (9th Cir. 1980) ("We dismissed only the appeal as moot in our prior decision, not the entire action. Appellees were therefore free to apply for attorneys' fees in the district court.") (citing Crowell v. Mader.), cert denied, 450 U.S. 1012 (1981). Indeed, our appellate authority recently recognized that although vacatur of a judgment is the general rule in this Circuit when a case becomes moot on appeal, vacatur is not automatic under all circumstances. U.S. Philips Corp. v. Windmere Corp., 971 F.2d 728, 731 (Fed. Cir. 1992), cert. granted, 113 S. Ct. 1249, cert. dismissed as improvidently granted sub. nom. Izumi v. U.S. Philips Corp., 114 S. Ct. 425 (1993), reh'g denied, 114 S. Ct. 904 (1994). The Federal Circuit stated: This court has held that vacatur of the judgment at trial is appropriate when settlement moots the action on appeal. Federal Data Corp. v. SMS Data Products Group, Inc., 819 F.2d 277, 280 (Fed.Cir. 1987); Smith Int'l, Inc. v. Hughes Tool Co.; 839 F.2d 663, 664, 5 USPQ2d 1686, 1687 (Fed.Cir. 1988). Authority is found in United States v. Munsingwear, Inc., 340 U.S. 36, 39-40, 71 S.Ct. 104, 106-107, 95 L.Ed. 36 (1950) and Duke Power Co. v. Greenwood County, 299 U.S. 259, 267, 57 S.Ct. 202, 205, 81 L.Ed. 178 (1936), which provide that judgments should in general be vacated when the case becomes moot. Id. While the Court of Appeals in U.S. Philips concluded that vacatur was appropriate there, where the settlement included all parties to the appeal and all claims had become entirely moot, the Court reiterated: "Although in the Federal Circuit vacatur is the general rule, we do not hold that vacatur must always be granted whatever the circumstances." U.S. Philips, 971 F.2d at 731. Here, having considered the circumstances, the Court decided that vacatur was warranted. As the United States Court of Appeals for the District of Columbia has recognized: "[t]o 'vacate' . . . means 'to annul, to cancel or rescind; to declare, to make, or to render, void; to defeat, to deprive of force; to make of no authority or validity; to set aside.'" Action on Smoking and Health v. Civil Aeronautics Board, 713 F.2d 795, 797 (D.C. Cir. 1983) (citations omitted). The rights of the parties are left as though no judgment had been entered.[foot #] 7 Although we recognize that the Federal Circuit has not reviewed the underlying protest decision on the merits and vacated it due to an affirmative disagreement with our decision, we believe that the Court's vacatur has the effect of stripping the decision of its precedential effect and that it prevents the opinion of the lower tribunal from being the law of the case. County of Los Angeles v. Davis, 440 U.S. 625, 634, 646 n.10 (1979). Because the Federal Circuit did not qualify its vacatur of our decision and directed the Board to dismiss the protest, we are left with no statutory basis for awarding costs. The Brooks Act provides in pertinent part: (B) If the board determines that a challenged agency action violates a statute or regulation or the conditions of any delegation of procurement authority issued pursuant to this section, the board may suspend, revoke, or revise the procurement authority of the Administrator or the Administrator's delegation of procurement authority applicable to the challenged procurement. (C) Whenever the board makes such a determination, it may, in accordance with section 1304 of title 31, further declare an appropriate interested party to be entitled to the costs of- (i) filing and pursuing the protest, including reasonable attorney's fees, and (ii) bid and proposal preparation. ----------- FOOTNOTE BEGINS --------- [foot #] 7 As one commentator has recognized: The Supreme Court appears to have adopted a relatively simple approach to the treatment of decisions moot on appeal. As a general rule, judgments in such cases are vacated and the cases are remanded for dismissal, at least when requested by a party. Through this disposition, a lower court's decision is purged of all its legal consequences, including collateral estoppel, res judicata, law of the case and stare decisis. A. F. Greenbaum, Mootness on Appeal in Federal Courts: A ______________________________________________ Reexamination of the Consequences of Appellate Disposition, ----------- FOOTNOTE BEGINS --------- 17 U.C. Davis L. Rev. 7, 101 (1983). ----------- FOOTNOTE ENDS ----------- 40 U.S.C. 759(f)(5)(B), (C) (1988). Thus, under the plain language of the Act, the Board must find a violation as a necessary predicate to awarding a protester recovery of costs. International Data Products Corp. v. Department of Justice, GSBCA 10403-C(10302-P), 93-2 BCA 25,606, at 127,466, 1992 BPD 328, at 5. NSI has lodged three arguments in support of its motion for costs. NSI Brief on Vacatur at 11-12. First, NSI contends that the joint stipulation of settlement is an admission of a violation and is enforceable despite the Federal Circuit's vacatur order. Id. at 12-17. Second, NSI argues that the Brooks Act authorizes the award of attorney fees even in the face of the Federal Circuit's vacatur order. Id. at 17-26. Third, NSI argues that under cases construing the Civil Rights Attorneys' Fees Awards Act, 42 U.S.C. 1988, vacatur of a lower court decision has no impact upon a prevailing party's right to recover its attorney fees. Id. at 26-38. The Air Force represented that it would not argue against enforcement of the settlement agreement and would only seek clear guidance from the Board as to its current enforceability. Air Force's Brief on Applicability of the Federal Circuit's Vacatur Order on Protesters' Pending Motions for Costs (Air Force Brief on Vacatur) at 4. As to costs not included in the settlement, the Air Force vigorously opposes any award on the ground that vacatur precludes an award. Id. at 4-8; Respondent's Surrebuttal to Reply Briefs by NSI and PRC on Vacatur Issue. Does the Stipulation Entitle NSI to Recoup Its Costs Despite Vacatur of the Board's Decision? NSI contends that the Air Force's admission in the stipulation that "protester substantially prevailed in [the underlying protests]," conclusively establishes NSI's entitlement to costs. NSI Brief on Vacatur at 12. We disagree. In the stipulation, the Air Force concedes the obvious: NSI substantially prevailed in the protest. The stipulation cites the Board's decision and is premised on that decision. At the time the stipulation was entered, the Board's decision had not been vacated. The Air Force does not concede that NSI was entitled to prevail due to a violation of statute or regulation or the conditions of the Air Force's procurement authority. The stipulation provides that NSI's costs will be paid from the permanent indefinite judgment fund of the United States -- not from funds of the Air Force. The Air Force, however, lacks the authority to effect payment from this fund. Only a judgment by an appropriate tribunal such as the Board can effect such payment. 40 U.S.C. 759(f)(5)(C); 31 U.S.C. 1304. We have recognized that a "stipulation of the parties is not self- effectuating and does not remove from the Board's docket the issue of entitlement to the costs of filing and pursuing the protest." Federal Computer Corp., GSBCA 10527-C(10389-P), 92-1 BCA 24,415, at 121,874, 1991 BPD 222, at 3. Contrary to NSI's assertion, the stipulation does not conclusively establish that NSI is entitled to recover its costs. Instead, the stipulation establishes only that NSI could recover its costs if the Board were to enter an order awarding NSI its costs. The "if" constitutes a condition that cannot be fulfilled because the Court vacated the merits decision and directed us to dismiss the protest complaint. In the absence of a merits decision in NSI's favor, we have no authority to enter an order awarding NSI its costs. Once the Board's finding of violation was vacated, the Board no longer had a statutory basis for declaring NSI to be entitled to an award of any costs. Moreover, our appellate authority directed the Board to dismiss the protest complaint, thus removing the case from the Board's docket.[foot #] 8 NSI further argues that the Federal Circuit's decision in Federal Data Corp. v. SMS Data Products Group, Inc., 819 F.2d 277 (Fed. Cir. 1987), requires that the joint stipulation be enforced. NSI's Brief on Vacatur at 13-16. There, the Board had granted SMS' protest and invalidated the award to Federal Data Corporation (FDC), but had refused to direct award to SMS. FDC and SMS appealed and cross-appealed from the Board's decision. These parties settled and moved for voluntary dismissal of the appeals, and the Court dismissed the appeals. FDC, SMS, and the agency then moved the Board to dismiss SMS' protest. Because the Board took no action on the motion, FDC and SMS re-noticed the appeal and moved for voluntary dismissal conditioned upon the Court's directing the Board to dismiss the protest. After the appeal was re-noticed, the Board denied the parties' motion to dismiss, which it viewed as including a request to vacate its decision on the merits. In Federal Data Corp., the Federal Circuit held that the Board had abused its discretion by failing to dismiss SMS' protest. The Circuit noted that the parties should not be required to continue litigating upon settling their differences and directed the Board "to dismiss SMS's protest and vacate the decision in accordance with the settlement agreement." 819 F.2d at 280. Protester relies on Federal Data Corp. to argue that the Board should similarly enforce the settlement agreement in this cost case. However, Federal Data Corp. is easily distinguishable from the case at hand. Here, the Board is not refusing to grant a motion to dismiss, based upon settlement by the parties. Rather, the Board is refusing to give effect to its merits decision, which was vacated by the Federal Circuit when the appeal became moot. Federal Data Corp. does not support the ----------- FOOTNOTE BEGINS --------- [foot #] 8 Had the Board's decision in the underlying protests been vacated on the merits, there would be no question that protesters were no longer entitled to costs. ----------- FOOTNOTE ENDS ----------- suggestion that, after vacatur of the Board protest decision, the Board is able to order payment from the permanent indefinite judgment fund -- that was not at issue in Federal Data Corp. Moreover, the Board is not forcing the parties to litigate a case they desire to settle on appeal. The appeal has become moot by virtue of the Air Force's decision to acquire the services at issue under a larger procurement, not by virtue of a settlement.[foot #] 9 No further litigation can ensue since the Board lacks the authority to consider the cost motion because there is no Board decision which finds a violation, or even a protest whose settlement includes an admission which materially alters the rights of the parties. Does the Brooks Act Authorize the Board to Award Costs Despite the Vacatur? Secondly, NSI argues that the Brooks Act authorizes an award of costs despite vacatur of the Board's decision because NSI prevailed on a significant issue and attained the principal result it sought in the protest, i.e., cancellation of the award to EDS. While we agree that NSI prevailed in the Board litigation and achieved a significant result in our protest decision, that protest decision was nullified by the Circuit's vacatur order. Had there been no appeal, it is obvious that the Board would have had the authority to grant NSI its reasonable reimbursable costs. We believe, however, that it would be illegal for this tribunal to continue to give effect to a decision which has been vacated and to allow that case to continue to spawn legal consequences when our appellate authority has indicated that it should not. The fact that the Air Force rolled its LAN SEII requirements into another procurement -- an action which complied with the Board's decision before the decision was vacated -- does not constitute a legal basis for an award of costs. ----------- FOOTNOTE BEGINS --------- [foot #] 9 The Air Force stated: While we did cancel the procurement and roll it into another . . . we respectfully contend that we did so, not to render the case moot, but because we had to get on with important Air Force business. . . . [T]he purpose of the procurement process is to obtain goods and services for the government, not to ensure absolute fairness and procedural cleanliness in the process itself. Air Force Brief on Vacatur at 7-8. ----------- FOOTNOTE ENDS ----------- Should the Board Award Fees to NSI under the "Prevailing Party" Case Law? In its third argument, NSI cites cases applying the Civil Rights Attorneys' Fees Award Act, 42 U.S.C. 1988, which conclude that tribunals may award attorney fees to a prevailing party even if the underlying judgment is vacated. NSI Brief on Vacatur at 28-38. NSI contends that these cases are pertinent because the Board construes the fee-shifting portions of the Brooks Act pari passu with other fee-shifting statutes so as to promote public policy. Id. at 27. Construing the Brooks Act "pari passu" with other statutes is neither appropriate nor necessary here. Our inquiry here is not an attempt to cipher the meaning of an ambiguous statutory provision or to determine how best to exercise our discretion in awarding fees. Rather, we are addressing a threshold jurisdictional issue, i.e., our authority to award any fees, a matter squarely and singularly answered by the Brooks Act. Because the Brooks Act clearly requires that the Board's determination of a violation is a prerequisite to a recovery of costs, "there is no room for the argument of [protester] drawn from other [statutes]." Greenport Basin & Construction Co. v. United States, 260 U.S. 512, 516 (1923). In Sterling Federal Systems, Inc. v. Goldin, the Court recognized that the Board's cost-shifting authority is derived from the Brooks Act alone and that the limits of the Board's authority to award costs in protest proceedings should be construed entirely apart from provisions prescribing the fee-shifting authority for federal courts. 16 F.3d 1177, 1184 (Fed. Cir. 1994).[foot #] 10 Further, the "prevailing party" cases cited by NSI construe a statute which, unlike the Brooks Act, expressly authorizes awarding costs to a "prevailing party." The fee-shifting provision of Section 1988 states: "In any action or proceeding to enforce a provision of sections 1981, 1981a, 1982, 1983, 1985, and 1986 of this title, . . . the court, in its discretion, may allow the prevailing party other than the United States, a reasonable attorney's fee as part of the costs." 42 U.S.C.A. 1988(b) (West Supp. 1994) (emphasis added). Section 1988 thus does not require a violation of statute or regulation as a prerequisite to a fee award. As the Supreme Court has recognized: "[n]othing in the language of 1988 conditions the District Court's power to award fees . . . on a judicial determination that the plaintiff's rights have been violated." Maher v. Gagne, 448 U.S. 122, 129 (1980). The Brooks Act, however, expressly conditions an award of costs on a determination of an agency violation by the Board. 40 U.S.C. 759(f)(5)(C). ----------- FOOTNOTE BEGINS --------- [foot #] 10 The Sterling Court properly refers to the ________ Brooks Act as the Competition in Contracting Act. This provision was added to the Brooks Act by the Competition in Contracting Act of 1984, Pub. L. No. 98-369, 98 Stat. 1175. ----------- FOOTNOTE ENDS ----------- Even if one were to look to the Section 1988 cases, they would not be controlling here because, as noted above, by virtue of the Federal Circuit's vacatur, there no longer is a protest case in which any party prevailed. Because NSI's status as a "prevailing party" is derived from a Board decision which has become a nullity, the decision is of no legal consequence and cannot form a basis for awarding costs from the judgment fund. In sum, vacatur of our underlying decision eradicated the legal predicate on which this tribunal could authorize an award of costs in this case. We lack the authority to enter an order awarding costs based upon our merits decision, because that decision has been vacated by the Court of Appeals. Decision Protester's motion for the award of costs is DISMISSED WITH PREJUDICE FOR LACK OF JURISDICTION. MARY ELLEN COSTER WILLIAMS Board Judge I concur: ____________________________ MARTHA H. DeGRAFF Board Judge HYATT, Board Judge, dissenting.[foot #] 11 The majority holds that because the decision on the merits of this protest was vacated by the Federal Circuit, we lack the necessary predicate for awarding protest costs. I respectfully dissent. Network Solutions, Inc. (NSI) has filed for protest costs incurred in pursuing its protest of the award of a contract to Electronic Data Systems Corporation (EDS) for systems engineering, installation and integration (SEII) of local area networks (LANs) by the Air Force. PRC, Inc. also protested the award and the Board subsequently consolidated the protests. The Board granted the protests, holding 1) that the Air Force ----------- FOOTNOTE BEGINS --------- [foot #] 11 This dissent was largely prepared by the late Judge Vincent A. LaBella, one of the original panel members, prior to his death in April 1994. ----------- FOOTNOTE ENDS ----------- performed an erroneous cost/technical tradeoff analysis; 2) that EDS had an unfair competitive advantage because of its prior performance of an actual LAN installation which was similar to a "sample task" used for evaluation purposes in this procurement; and 3) that PRC was wrongly downgraded for proposing products from General Services Administration schedule contracts when these products were acceptable and PRC was unable to obtain allegedly proprietary information contained in Air Force requirements contract which was available to other offerors. Network Solutions, Inc. v. Department of the Air Force, GSBCA 11498-P, et al., 92-3 BCA 25,083, at 125,023-024, 1992 BPD 131, at 2-3, vacated sub nom. Electronic Data Systems Corp. v. Rice, 988 F.2d 128 (Fed. Cir. 1992) (table) (text in Westlaw, 1992 WL 436547). Thereafter, NSI entered into a joint stipulation with the Air Force concerning recovery of NSI's protest costs. The stipulation stated that "Protester substantially prevailed in Network Solutions, Inc. and PRC, Inc. v. Department of the Air Force, GSBCA Nos. 11498-P, 11532-P (May 11, 1992). The Board's Decision materially altered the parties' legal relationship in a manner which Congress sought to promote in enacting the fee statute. 40 U.S.C. 759(f)(5)(C)." Joint Stipulation of NSI and Air Force (Aug. 17, 1992) 1. The joint stipulation further stated that the Government agreed to pay $460,000 of the costs claimed by NSI in full and final satisfaction of NSI's costs of filing and pursuing the protest. Id. 8. The parties did not reach an agreement as to $243,583.84 that NSI sought in bid and proposal preparation costs, and they requested that the Board stay all proceedings connected to NSI's request for bid and proposal preparation costs. Id. 7. The parties also agreed that they would not seek reconsideration of, or appeal from, the Board's decision. Id. 9. EDS appealed the Board's decision in the consolidated protests to the Federal Circuit. PRC intervened in the appeal, but NSI and the Air Force did not. On September 14, 1992, the Air Force canceled the LAN SEII procurement by announcement in the Commerce Business Daily (CBD). The CBD announcement stated that the project had been incorporated into the ongoing Unified Local Area Network Architecture II (ULANA) acquisition. Following the CBD announcement, PRC moved the Court to dismiss EDS's appeal as moot contending that no offeror would receive award of the LAN SEII contract because of the cancellation. The Federal Circuit found the appeal was moot and ruled that the Board's decision should be vacated and that, on remand, the Board should dismiss PRC's protest. Electronic Data Systems Corp. v. Rice, 1992 WL 436547. Upon remand, the Board dismissed both PRC's and NSI's protests. Network Solutions, Inc. v. Department of the Air Force, GSBCA 11498-P-REM, et al., 1993 BPD 45 (Feb. 10, 1993). The Brooks Act provides that the Board may award to an appropriate interested party protest and bid and proposal preparation costs when the Board determines that the agency has violated a statute, regulation, or the conditions of a delegation of procurement authority. 40 U.S.C. 759(f)(5)(B), (C) (1988). The Board has interpreted the term "appropriate interested party" to permit recovery of such costs by a prevailing party, i.e., "one that has succeeded on any significant issue in the litigation that achieves some of the benefit it sought in bringing suit." Bedford Computer Corp., GSBCA 9837-C(9742-P), 89-2 BCA 21,827, at 109,811, 1989 BPD 121, at 3 (citations omitted). A protester crosses the threshold of prevailing party status if it can point to a resolution of the dispute which materially alters the parties' legal relationship in a manner which Congress sought to promote in the fee statute. Id. The Board does not automatically award fees merely because the Government has admitted a violation in a settlement agreement or because the protester succeeded on an insignificant issue which did not alter the parties' legal relationship. See, e.g., Andersen Consulting v. Department of the Treasury, GSBCA 11070-C(10833-P)-REIN, 92-3 BCA 25,086, 1992 BPD 134; Bedford Computer Corp., 89-2 BCA 21,827, 1989 BPD 121. At the same time, the Board will not necessarily decline to award fees merely because there has been no hearing or decision on the merits. The Board will independently examine the record to decide for itself whether the protester is a prevailing party. As we stated in Bedford Computer Corp.: With respect to the requirement of a violation [40 U.S.C. 759(f)(5)(B),(C)], . . . we have never read the statute to require a full hearing and decision on the merits before we may award costs, but we have required some minimum showing in the record, such as a stipulation by the parties that the respondent has violated a material statute, regulation, or delegation of procurement authority (DPA) or has provided some benefit to the protester, materially altering its position in favor of full and open competition. 89-2 BCA at 109,812, 1989 BPD 121, at 5. This is because . . . a plaintiff who brings an action that has no colorable, or even reasonable, likelihood of success on the merits is not entitled to recover attorney's fees if the defendant simply complies with the plaintiff's demands and moots the case for reasons that have nothing to do with the potential merit of the suit. Hennigan v. Ouachita Parish School Board, 749 F.2d 1148, 1153 (5th Cir. 1985). As long as this predicate is met, the Board has held that it may award costs regardless of how the protest is actually resolved. See, e.g., Berry Computer, Inc. v. Department of the Navy, GSBCA 12040-C(11972-P), 93-2 BCA 25,658, 1992 BPD 400 (protester was a prevailing party when Government admitted to violations prior to hearing); The Newman Group, Inc. v. National Aeronautics and Space Administration, GSBCA 11878-C(11849-P), 93- 1 BCA 25,345, 1992 BPD 203 (protester was a prevailing party when parties settled); Rocky Mountain Trading Co. - Systems Division, GSBCA 10404-C(10210-P), 91-2 BCA 24,004, 1991 BPD 118 (protester need not obtain formal relief to prevail, but must establish a clear causal relationship between the litigation and the outcome); Cyberchron Corp., GSBCA 10390-C(10263-P), 90-2 BCA 22,801, 1990 BPD 61 (protester was a prevailing party when parties filed a stipulation acknowledging Government violation and consenting to entry of summary relief against the Government). The Board has awarded costs even when the Government has taken immediate action to correct the violations which led to the protest so long as it is possible to determine that the protester was a prevailing party. See Integrated Systems Group, Inc. v. Department of Commerce, GSBCA 11974-C(11921-P), 94-1 BCA 26,399, 1993 BPD 230 (Board granted protest costs where parties entered into a joint stipulation to grant the protest ten days after it was filed because the Government discovered it made a mistake reading protester's response to Commerce Business Daily notice and immediately canceled the contract); Communications Resource Group, Inc. v. General Services Administration, GSBCA 11038-C(10998-P), 92-2 BCA 24,769, 1992 BPD 29 (Board granted protest costs where protest was dismissed thirteen days after being filed when the Government terminated the contract for convenience and agreed to reevaluate all proposals). The situation before us is analogous to those cases in which the parties settled prior to issuance of a decision on the merits, but the Board was still able to determine that protesters were prevailing parties entitled to protest costs. Thus, awarding protest costs here would be consistent with Board practice and precedent. In the underlying decision that was vacated by the Federal Circuit, we granted the protest; terminated the Air Force's contract with EDS; and required the Air Force to revise its solicitation or to acquire its requirements in any manner which was consistent with statute, regulation, and its DPA. Network Solutions, Inc. v. Department of the Air Force, GSBCA 11498-P, et al., 92-3 BCA 25,083, at 125,024, 125,049, 1992 BPD 131, at 3-4, 55, vacated sub nom. Electronic Data Systems Corp. v. Rice, 988 F.2d 128 (Fed. Cir. 1992) (table). After receiving our decision, the Air Force terminated the contract, canceled the solicitation, and incorporated the project into another ongoing procurement. All of these actions were fully consistent with our decision. Even after the Federal Circuit vacated the Board's decision, the Air Force continued to maintain that course of action. If the protests had not been filed, the Air Force would not have taken these steps. Thus, there is a causal connection between the filing of the protest and the Air Force's actions to acquire its requirements consistent with statute and regulation. The fact that our decision was vacated need not change the analysis. The Court's vacatur occurred because the appeal by EDS became moot when the Air Force took actions to comply with our decision by abandoning the protested procurement and entering into a settlement agreement. Although the Board's underlying decision ceases to exist, the ultimate result is precisely the disposition that the protesters sought to achieve when the litigation commenced. The protesters succeeded on a significant issue in the litigation when the contract to EDS was terminated and the Air Force subsequently canceled the procurement. The protesters also achieved the benefit they sought to achieve -- a new opportunity to compete for the Air Force's requirements. An analogy can be drawn between the situation before us and cases interpreting the Civil Rights Attorneys' Fees Awards Act, 42 U.S.C. 1988 (Civil Rights Act). We have stated that we will construe our statutory authority to award protest costs pari passu with other statutes, including the Civil Rights Act, in which Congress has authorized awards of attorney fees to prevailing parties. NCR Comten, Inc., GSBCA 8229(8091-P), 86-2 BCA 18,822, at 94,847, 1986 BPD 24, at 2 (citing Amdahl Corp., GSBCA 7965(7859-P), 85-3 BCA 18,283, at 91,762). Our test for determining whether protester is an "appropriate interested party" for purposes of protest cost awards mirrors the test used for determining prevailing party status for fee awards pursuant to the Civil Rights Act. To be a prevailing party for purposes of the Civil Rights Act, the plaintiff must succeed on a significant issue in the litigation which achieves some of the benefit it sought in bringing suit. Farrar v. Hobby, 113 S. Ct. 566, 572 (1992) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). "[T]he plaintiff must be able to point to a resolution of the dispute which changes the legal relationship between itself and the defendant." Id. at 572-73 (quoting Texas State Teachers Association v. Garland Independent School District, 489 U.S. 782, 792 (1989)). This resolution can occur through a judgment, consent decree, or settlement. Id. at 573. Thus, "a plaintiff 'prevails' when actual relief on the merits of [its] claim materially alters the legal relationship between the parties by modifying the defendant's behavior in a way that directly benefits the plaintiff." Id. As discussed above, protesters succeeded on a significant issue and obtained the benefits they sought in filing the protest. The contract award to EDS was canceled and they will have another opportunity to compete for the requirements. In addition, the Air Force has materially altered the legal relationship between itself and the protesters by entering into a joint stipulation with Network Solutions concerning the cancellation of EDS's contract and the award of protest costs for this protest. The Air Force and Network Solutions agreed to the terms of the joint stipulation prior to the Federal Circuit's vacatur of our decision and the vacatur does not affect or invalidate the settlement. In the stipulation, the Air Force stated that Network Solutions substantially prevailed in the protest and that the Board's decision "materially altered the parties' legal relationship[.]" Joint Stipulation 1. This obviously refers to the cancellation of the award to EDS which continues notwithstanding the vacatur. Both parties also agreed that neither would seek reconsideration of or appeal from our decision on the merits. Id. 9. The settlement agreement and the admissions it contains survive the Court's vacatur. Thus, the legal relationship between the parties has been materially altered in a manner required by the prevailing party test. Moreover, the cases interpreting the Civil Rights Act indicate that, under the prevailing party doctrine, relief need not be "judicially decreed" to justify a fee award. Hewitt v. Helms, 482 U.S. 755, 760-61 (1987).[foot #] 12 Thus, the vacatur of the lower court's decision on the merits does not necessarily affect a possible fee award. Rather, the focus remains on determining whether the plaintiff is a prevailing party for purposes of entitlement to attorney fees. For example, in Williams v. Alioto, 625 F.2d 845 (9th Cir. 1980), cert. denied, 450 U.S. 1012 (1981), the Ninth Circuit dismissed as moot an appeal from the grant of a preliminary injunction preventing the City of San Francisco Police Department from enforcing a stop and frisk policy implemented after a series of murders. Before the appeal was heard, the suspects were caught and convicted, and the police department stopped the searches. Id. at 847. The court stated that the preliminary injunction prevented the police from enforcing their search guidelines, which was exactly the result the plaintiffs sought. Id. "Our previous dismissal of ----------- FOOTNOTE BEGINS --------- [foot #] 12 The Supreme Court, in Hewitt v. Helms, _________________ observed that: In all civil litigation, the judicial decree is not the end but the means. At the end of the rainbow lies not a judgment, but some action (or cessation of action) by the defendant that the judgment produces -- the payment of damages, or some specific performance, or the termination of some conduct. Redress is sought through _______ the court, but from the defendant. . . . The real value of the judicial pronouncement . . . is in the settling of some dispute which affects the behavior of _____________________________ the defendant towards the plaintiff. ___________________________________ 482 U.S. at 761. ----------- FOOTNOTE ENDS ----------- the appeal as moot and vacation of the district court judgment does not affect the fact that for the pertinent time period appellees obtained the desired relief. . . ." Id. at 847-48. The Ninth Circuit found that a fee award was appropriate. Decisions in other circuits are in accord. In Martin v. Heckler, 773 F.2d 1145 (11th Cir. 1985), the court stated that the focus should be on whether "plaintiff's lawsuit was a catalyst motivating defendants to provide the primary relief sought in a manner desired by litigation." Id. at 1149 (quoting Robinson v. Kimbrough, 652 F.2d 458, 465 (5th Cir. 1981)). The court determined that a plaintiff may be a prevailing party when the litigation terminates by a mooting of the case where the plaintiff vindicated his rights. Id. This would include cases where the defendant took remedial action to correct its wrongful actions only after a suit was filed. See also S-1 v. State Board of Education of North Carolina, 6 F.3d 160 (4th Cir. 1993) (court must determine if defendant's actions were causally connected to the litigation to determine if mooting of an action prevents plaintiff from being a prevailing party); Grano v. Barry, 783 F.2d 1104 (D.C. Cir. 1986) (party may be prevailing party when the legal action ceases before initial or final appellate judgment due to intervening mootness; plaintiff must only show the final result represents a disposition that furthers its interest); Bagby v. Beal, 606 F.2d 411 (3rd Cir. 1979) (plaintiff is a prevailing party if he "essentially succeeds in obtaining the relief he seeks in his claims on the merits" even when interim relief during the pendency of the appeal remedies the constitutional violation and moots the appeal). As stated by the Fifth Circuit, Thus a determination of mootness neither precludes nor is precluded by an award of attorneys' fees. The attorneys' fees question turns instead on a wholly independent consideration: whether plaintiff is a prevailing party. Even preliminary relief may serve to make a plaintiff a "prevailing party" under the statute; the lawsuit need not proceed to completion. All that is required is that the plaintiff obtain the primary relief sought. Doe v. Marshall, 622 F.2d 118, 120 (5th Cir.) (citations omitted), reh'g denied, 627 F.2d 239 (1980), cert. denied, 451 U.S. 993 (1981). The prevailing party inquiry is entirely appropriate in the context of the Brooks Act. With regard to fee shifting statutes generally the prevailing party inquiry enables the court to ensure that the public policies underlying fee shifting statutes are promoted by the litigation. If the plaintiff is unable to succeed on a significant issue in the litigation, the public policy underlying the fee statute at issue will not be promoted and the legal relationship between the parties will not be altered. In the context of the Brooks Act, this inquiry enables the Board to ensure that the Congressional intent of "encourag[ing] private enforcement of the laws and regulations mandating the acquisition of general purpose automatic data processing equipment and services through full and open competition and to open the 'federal marketplace to all responsible computer companies'" which underlies the Act is promoted. NCR Comten, Inc., GSBCA 8229(8091-P), 86-2 BCA 18,822, at 94,853, 1986 BPD 24, at 10 (quoting H.R. Rep. No. 861, 98th Cong., 2d Sess. 1430 (1984), reprinted in 1984 U.S.C.C.A. 2118; H.R. Rep. No. 1157, 98th Cong., 2d Sess. 26 (1984)). The Board can only ensure that the policy of full and open competition is promoted when the protester can demonstrate that it succeeded on a significant issue which achieved some of the benefit it sought in bringing suit. If the protester is unable to make this showing, it is highly likely that the policy of full and open competition has not been promoted by the litigation at issue. In this case, it is clear that the policy of full and open competition has been promoted. Even after the Court's vacatur of our decision, the protesters can demonstrate that they succeeded on a significant issue in the protest and that they achieved the benefit they sought in bringing suit. The Air Force terminated the contract with EDS and canceled the procurement only after and as a direct result of the Board's decision on the merits. Even though our decision has been vacated, the Air Force is still acting consistently with our decision and its settlement agreement. The Court's vacatur did not prompt the Air Force to return to its former course of action or change the fact that protesters obtained the relief they desired. Because the protests caused the Air Force to change its course of action and materially altered the parties' legal relationship in a manner consistent with the intent of Congress in enacting the fee shifting statute, I would find that protesters were prevailing parties. If the Air Force, itself, had appealed our decision and had not entered into the settlement agreement with Network Solutions, I might agree that the Court's vacatur vindicated its position. In that case, protesters would not be prevailing parties because they would not have obtained the relief they sought and would not have materially altered the legal relationship between the parties. This, however, is not the situation before us. We must keep in mind that the merits of the protest and the motion for protest costs are two separate actions at this Board. Following our decision, the Air Force took actions to ensure that its procurement was conducted in a manner which was consistent with statute, regulation, and its DPA. After these actions, there no longer was a violation with respect to the procurement at issue and the appeal became moot. The Court thus vacated our decision because there was no case or controversy between the parties left for appeal. Under these circumstances, I cannot conclude that the vacatur affects the motion for protest costs. The fact that the appeal was mooted has no bearing on whether protesters in this case are "appropriate interested parties" as the Board has interpreted this term. Because I would find that protesters are prevailing parties, I respectfully dissent. _____________________________ CATHERINE B. HYATT Board Judge