___________________________________ GRANTED IN PART: June 21, 1994 ___________________________________ GSBCA 12276-C(12028-P) ELECTRONIC DATA SYSTEMS CORPORATION, Protester, v. DEPARTMENT OF THE AIR FORCE, Respondent. David S. Cohen and Lisa R. Hovelson of Cohen & White, Washington, DC; and Daniel Parker of EDS Corporation, Herndon, VA, counsel for Protester. Clarence D. Long, III, Office of the General Counsel, Department of the Air Force, Washington, DC, counsel for Respondent. Before Board Judges HENDLEY, HYATT, and VERGILIO. HYATT, Board Judge. Pursuant to Rule 35[foot #] 1 of the Board's Rules of Procedure, on January 22, 1993, Electronic Data Systems Corporation (EDS) timely moved for an award of protest costs in the amount of $252,425.35. On March 5, 1993, EDS supplemented its motion, seeking the additional amount of $2,711.27, for a total of $255,136.62 in protest costs. For the reasons stated we grant the application in part. Background The underlying protests challenged an award by the Department of the Air Force of a contract to Zenith Data Systems Corporation for the acquisition of microcomputer systems to ----------- FOOTNOTE BEGINS --------- [foot #] 1 48 CFR 6101.35 (1993). ----------- FOOTNOTE ENDS ----------- support general purpose applications, including standard office automation functions such as word processing, data base management, and business graphics. The award was made under a procurement commonly referred to as "Desktop IV." Four protests were filed, by CompuAdd Corporation (GSBCA 12021-P), Electronic Data Systems Corporation (GSBCA 12028-P), Government Services Technology, Inc. (GSBCA 12041-P), and Apple Computer, Inc. (GSBCA 12042-P). EDS actively pursued and supported the grounds upon which the protests were ultimately granted. See CompuAdd Corp. v. Department of the Air Force, GSBCA 12021-P, et al., 1993 BPD 48, at 5 (Dec. 23, 1992).[foot #] 2 The protesters alleged (1) that the Zenith proposal was flawed and should have been disqualified for award, and (2) that the evaluations and the conduct of the "best value" analysis leading to the Air Force's decision to make a single award were faulty. The arguments seeking disqualification of Zenith's proposal were threefold -- protesters claimed that (1) Zenith's proposal exceeded the page limits for the combined management and technical areas; (2) Zenith's proposal contained line items that were impermissibly priced below Zenith's costs and, in conjunction with this, the Government's cost evaluation was flawed; and (3) Zenith was not able to produce and deliver quantities of microcomputer systems that complied with the Trade Agreements Act, again leading to a flawed evaluation of its proposal. Protesters also urged that the Air Force's best value analysis failed to adhere to the solicitation's provision that it would assess whether a combination of proposals or a single proposal would be most advantageous to the Government. The Board's decision granting the protests ruled that the monitors proposed in Zenith's successful offer did not meet the requirements of the Trade Agreements Act of 1979 for substantial transformation in a designated country. In addition, the Board concluded that the Air Force had not adequately considered combinations of awards in contrast to a single award in determining the best overall value for the Government. The counts relating to page limitations and below cost pricing in Zenith's proposal were rejected by the Board. The parties engaged in extensive cooperative discovery efforts in pursuing these consolidated protests. In addition to the exchange of several rounds of written discovery, numerous depositions were taken and defended by protesters. A nine day ----------- FOOTNOTE BEGINS --------- [foot #] 2 The CompuAdd decision resolved the second round ________ of protests concerning the Desktop IV procurement. Shortly after this cost application was filed, the CompuAdd decision was ________ appealed to the United States Court of Appeals for the Federal Circuit and a third protest of the Desktop IV procurement was filed at the Board. These events effectively suspended the processing of the cost applications. Following issuance of the Board's decision in the third round of protests, the appeal of the CompuAdd decision was withdrawn. ________ ----------- FOOTNOTE ENDS ----------- hearing was conducted, followed by the submission of lengthy post-hearing briefs and a round of reply briefs. The total amount, of $255,136.62, claimed by EDS consists of outside counsel fees totalling $157,788.50, in-house counsel costs in the amount of $31,136.04, and out-of-pocket disbursements, amounting to $66,218.08, for such items as telefacsimile transmissions, photocopying, long distance telephone charges, transcripts, courier services, and computerized legal research. Discussion Under the Brooks Act, when an agency has violated statute, regulation, or the conditions of a delegation of procurement authority, the Board may grant an "appropriate interested party" the costs of "filing and pursuing the protest, including reasonable attorney's fees, and . . . bid and proposal preparation." 40 U.S.C. 759(f)(5)(C) (1988). An "appropriate interested party" has been defined as a "prevailing party" or "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; see also Julie Research Laboratories, Inc., GSBCA 9693-C (9474-P), 91-1 BCA 23,389, 1990 BPD 345. EDS and the Air Force have stipulated that EDS is entitled to recover 95 percent of the protest costs incurred, or $242,379.78, and have filed a joint motion asking the Board to enter judgment in that amount. In February 1994, following the issuance of the decision of the United States Court of Appeals for the Federal Circuit in Sterling Federal Systems, Inc. v. Goldin, 16 F.3d 1177, 1187 (Fed. Cir. 1994), which held that the Board is not statutorily precluded from awarding expert consultant fees and in-house costs, the Board convened a conference to inquire if any of the protesters wanted to supplement the cost applications to document such items. EDS informed the Board that it had incurred some $30,000 in expert fees, but elected not to supplement its application for protest costs. The Board has consistently recognized that, notwithstanding any stipulation between the parties concerning recoverable costs, it has an obligation to make an independent review of the reasonableness of the cost application when the litigants have requested an order granting payment from the permanent indefinite judgment fund. See, e.g., International Business Machines Corp. v. Department of the Treasury, GSBCA 11605-C(11359-P), 93-1 BCA 25,420, 1992 BPD 220; Gallegos Research Group Corp., GSBCA 10125-C(9983-P), 90-1 BCA 22,609, 1990 BPD 21; North American Automated Systems Co., GSBCA 9321-C(9183-P), 89-3 BCA 22,051, 1988 BPD 192. Indeed, the Board has, after reviewing a stipulated cost settlement agreement, concluded that it should reduce the amount agreed to by the parties. E.g., PacifiCorp Capital, Inc. v. Department of the Army, GSBCA 10830-C(10714-P), 92-3 BCA 25,117, 1992 BPD 145; Gallegos Research Group. One of the elements of such a review includes consideration of whether there are any factors warranting a reduction in the amounts claimed by protester and stipulated to by protester and respondent. Here, one such factor to be considered is whether there are circumstances warranting a reduction in the award to account for time spent pursuing issues that did not relate to or contribute to the success of the issues on which that party prevailed. See Government Technology Services, Inc. v. Department of the Air Force, GSBCA 12277-C(12041-P) (June 21, 1994); CACI, Inc. v. Department of the Army, GSBCA 12423-C(11523- P), 1994 BPD 107 (May 31, 1994). In the Desktop protests, we view the information developed in support of the below-cost pricing and page limitation issues as segregable. The evidence adduced to support these two counts had no particular relevance, even by way of background information, to the issues on which protesters ultimately prevailed. Although these two unsuccessful counts were not "major" compared to the considerable time and effort expended by the parties on the other issues litigated, these issues were addressed in detail at trial and in the record, were argued by the parties in the briefs, and were fully addressed by the Board in its decision on the merits. As such, these two issues were significant. Additionally, these issues were, in contrast to unsuccessful contentions relating to the evaluations of particular proposals, distinct from the successful claims. Admittedly, the time and costs attributable to these issues constitute small amounts relative to those attributable to the other, successful, issues. Nonetheless, the actual amounts are not trivial. In this case, our independent review of the record, including the transcript and post-hearing briefs, persuades us that the five percent reduction in overall costs agreed to by the Air Force and EDS in fact closely correlates to the amount that should be deducted for these unsuccessful claims.[foot #] 3 A review of EDS's cost application demonstrates that in all other respects the costs claimed are ----------- FOOTNOTE BEGINS --------- [foot #] 3 The records produced by EDS, although well- documented, do not permit us to calculate the exact time attributable to the unsuccessful issues. In such cases, the Board has exercised its discretion to determine a reasonable approximation of the amount by which the fee award should be reduced. E.g., CACI, Inc. v. Department of the Army, GSBCA ____ _______________________________________ 12423-C(11523-P), 1994 BPD 107 (May 31, 1994); Digital _______ Equipment Corp., GSBCA 9285-C (9131-P), 89-3 BCA 22,181, 1989 _______________ BPD 248. ----------- FOOTNOTE ENDS ----------- properly documented and are appropriately recoverable as protest costs. Decision For the reasons stated above, protester's motion is GRANTED IN PART. Protester is awarded $242,379.78. 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: _______________________________ ____________________________ JAMES W. HENDLEY JOSEPH A. VERGILIO Board Judge Board Judge