___________________________________ GRANTED IN PART: June 21, 1994 ___________________________________ GSBCA 12277-C(12041-P) GOVERNMENT TECHNOLOGY SERVICES, INC., Protester, v. DEPARTMENT OF THE AIR FORCE, Respondent. Richard J. Conway, William M. Rosen, and Hilary S. Cairnie of Dickstein, Shapiro & Morin, Washington, DC, 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, Government Technology Services, Inc. (GTSI) timely moved for an award of protest costs in the amount of $469,430.39. On August 4, 1993, GTSI supplemented its application to seek additional fees of $53,427.40, for a total award of $522,827.79. We grant the application in part. Background The underlying protest challenged an award by the Department of the Air Force of a contract to Zenith Data Systems Corporation ----------- FOOTNOTE BEGINS --------- [foot #] 1 48 CFR 6101.35 (1993). ----------- FOOTNOTE ENDS ----------- 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 award was made under a procurement commonly referred to as "Desktop IV." Protests were filed by CompuAdd Corporation (GSBCA 12021-P), Electronic Data Systems Corporation (EDS) (GSBCA 12028-P), Government Services Technology, Inc. (GSBCA 12041-P), and Apple Computer, Inc. (GSBCA 12042-P).[foot #] 2 GTSI 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., 93-2 BCA 25,811, 1993 BPD 48 (1992). 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 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 hearing was conducted, followed by the submission of lengthy post-hearing briefs and a round of reply briefs. ----------- FOOTNOTE BEGINS --------- [foot #] 2 In addition, two companies, AST Research, Inc. and International Data Products Corporation, intervened in support of the protests. ----------- FOOTNOTE ENDS ----------- The protest costs claimed by GTSI consist of outside counsel fees totalling $406,350, in-house counsel costs in the amount of $14,671.88, and out-of-pocket disbursements, amounting to $80,490.58, for such items as telefacsimile transmissions, photocopying, long distance telephone charges, transcripts, courier services, computerized legal research, and lodging.[foot #] 3 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. These protests were initiated in September 1992 and significantly amended on October 22, 1992. Eight parties participated, to varying degrees, in the proceedings; the principal participants in support of the protests were EDS, GTSI, CompuAdd, and Apple. The hearing required nine days; many of the hearing days lasted for twelve hours and more in an effort to enable the parties to present their cases fully. The record compiled in the case was massive both in terms of documents and testimony. Counsel for the multiple protesters divided up tasks and cooperated as much as possible in order to streamline the proceedings and avoid duplication of effort. These contributions to the overall success of the protests were significant on the part of all counsel for protesters. GTSI assumed a lead role for many of the issues litigated in these proceedings. With respect to GTSI's motion, the Air Force urges that the Board reduce any award to GTSI wholesale so as to place it on a par with the substantially lower cost application filed by EDS. ----------- FOOTNOTE BEGINS --------- [foot #] 3 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 ----------- FOOTNOTE BEGINS --------- (Fed. Cir. 1994), which held that the Board is not statutorily precluded from awarding expert consultant fees or 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. GTSI indicated that it had incurred approximately $29,000 in expert consultant fees, but elected not to supplement its application. ----------- FOOTNOTE ENDS ----------- The Air Force relies on Horizon Data Corp. v. Department of the Navy, GSBCA 11018-C(10831-P), 92-2 BCA 24,852, 1992 BPD 49, in which the Board restricted a second protester's recovery to the amount awarded a companion, lower-priced protester. In that case, the Board reasoned, inter alia, that the "protesters submitted similar proposals, were rejected by the agency for similar reasons, [and] advanced similar reasons for granting their protests." The Air Force offers, for the Board's consideration, its "purely subjective view that the abilities, apparent effort, and results achieved of both major protesters were about the same" and that there was "little to choose between them in quality of effort and results obtained." The Horizon Data approach does not lend itself to the circumstances of these proceedings. Although we agree that both sets of counsel provided high quality representation and achieved a considerable degree of success on behalf of their respective clients, on this record we cannot find that it would be appropriate to restrict the recovery by GTSI to the level of cost incurred by counsel for EDS. The Air Force does not, in its opposition, cite to any specific instances of duplication of effort or excessive expenditures of time by GTSI, but simply looks at aggregate hours spent by the attorney teams for EDS and GTSI and questions why GTSI charged more hours and used more attorneys. In addition, the Air Force challenges the billing rate differential for the two lead attorneys for each protester. With respect to the disparity in billing rates for lead counsel, both hourly rates are within the range the Board has acknowledged prevails in the Washington, DC, legal community. See, e.g., Science Applications International Corp. v. National Aeronautics & Space Administration, GSBCA 12696-C(12600-P), 1994 BPD 94, at 5-6 (May 11, 1994). The circumstances of this case do not persuade us that this is a case in which it would be appropriate to set a cap on hourly rates dictated by the lower rate. As to the higher aggregate number of hours incurred by GTSI's counsel in pursuing this matter, although all the parties jointly supported the overall issues presented by the protests, each had individual issues to defend and pursue, as well. For example, GTSI was required to defend a challenge to the validity of its proposal that was not applicable to EDS, thus accounting for at least some, if not all, of the additional hours logged by GTSI's counsel. GTSI is entitled to recover for these efforts. See United States v. Compusearch Software Systems, 936 F.2d 564 (Fed. Cir. 1991). Additionally, the Board is not privy to the exact way in which work was divvied up by counsel for the protesters, but recognizes that extensive coordination took place in the interest of efficiency and avoiding duplication of effort. GTSI shouldered a large portion of that effort. A review of the time logs filed by GTSI reveals that the time was properly spent by counsel on issues relevant to the protests. Moreover, the total costs incurred by GTSI are reasonably comparable to those requested in connection with protest proceedings of similar duration and complexity. See, e.g., Grumman Data Systems Corp. v. Department of the Air Force, GSBCA 11799-C (11635-P), 93-2 BCA 75,773, 1993 BPD 16; Westinghouse Electric Corp. v. Department of Transportation, GSBCA 11907-C(11745-P), 93-3 BCA 26,203, 1993 BPD 167. Thus, we are not persuaded that GTSI's protest costs should be reduced in accordance with the rationale of Horizon Data. The Air Force particularly disputes the costs documented by GTSI in its supplement to the initial motion.[foot #] 4 These costs include sums expended in preparing the cost application, which the Air Force contends are excessive, and amounts expended subsequent to the issuance of the Board's decision, which the Air Force maintains are not properly recoverable as costs of pursuing the protest. In addition, GTSI presents in the supplemental filing costs incurred by in-house counsel for GTSI in assisting with the protest proceedings. We agree with the Air Force that various costs incurred by GTSI subsequent to the protest are not properly recoverable. Although certain post-decisional costs may reasonably be charged to the protest, such as fees incurred because of the need to review the decision and propose redactions of proprietary information, the lion's share of the costs claimed by GTSI do not appear to be attributable to activities of this sort. Nor are the costs akin to those awarded in such decisions as Sysorex Information Systems, Inc., GSBCA 10569-C(10065-P), 92-1 BCA 24,532, at 122,412, 1991 BPD 277, at 5 and Computer Consoles, Inc., GSBCA 8450-C(8134-P), 87-1 BCA 19,440, 1986 BPD 183. In Sysorex, the Board permitted recovery of costs incurred in participating in further proceedings at the Board directly related to the initial protest. These included a reconsideration request and a motion for sanctions. The costs sought by GTSI are not of this nature, however. In its supplemental motion, GTSI ----------- FOOTNOTE BEGINS --------- [foot #] 4 The Air Force also criticizes the "lateness" of GTSI's supplemental filing, urging that it is untimely. Although the supplemental motion might have been submitted sooner, at the same time, there was no pressing need for GTSI to have filed it earlier. Shortly after the cost motion was filed, the Air Force had moved for dismissal pending resolution of the appeal of the underlying decision to the United States Court of Appeals for the Federal Circuit. For all practical purposes, this case was suspended for many months while a subsequent round of protests was processed and the appeal was pending at the Federal Circuit. The Air Force did not respond to the initial motions until the end of July 1993. GTSI had indicated that it would supplement its application at a later date, and no specific deadline had been established by which it was required to do so. We thus are not persuaded that the supplemental motion should be disregarded as untimely filed. ----------- FOOTNOTE ENDS ----------- described these costs as involvement in activities of the other parties, particularly the Air Force and Zenith, with an eye to "preserving" the benefits of the Board's decision. These are not the types of costs awarded in Brooks Act cost cases, and we are not persuaded that they should be awarded here. See Government Technology Services, Inc. v. Department of the Navy, GSBCA 10610- C(10389-P), 94-2 BCA 26,685, 1994 BPD 3 (1993). We have examined the documentation submitted by GTSI in connection with post-decisional costs incurred and are not able to calculate with precision the amounts attributable to permissible activities versus those not properly recoverable. Based on our review of the descriptions of services rendered, of the $15,693.75 in fees requested for post-decisional activities other than preparation of the cost application, $1,288.75 appear to be related to post-decisional activities for which reimbursement of fees is customarily ordered. We award this amount. The costs claimed for preparation of the cost motion and first supplement are excessive. The costs relate to preparation of the initial motion and to efforts in responding to the Government's motion to dismiss the protests pending resolution of the appeal of the underlying decision at the United States Court of Appeals for the Federal Circuit. Although we recognize that GTSI in fact prepared a more elaborate application, including presentation of a more detailed legal argument than was provided by the other protesters, nonetheless the amount of costs incurred, $18,410.19, is unreasonable. This is particularly so since most of the effort for which reimbursement is requested was in preparing the initial and supplemental motions, rather than in defending against the objections of the Air Force. See RMTC Systems, Inc. v. Nuclear Regulatory Commission, GSBCA 11893- C(11734-P), 93-3 BCA 26,147, 1993 BPD 216, modified on reconsideration, 94-2 BCA 26,670, 1994 BPD 13 (protester may recover a larger than ordinary amount in pursuing cost application where vigorous opposition, necessitating detailed responses, is mounted by Government); cf. Grumman Data Systems Corp. v. Department of the Air Force, GSBCA 11799-C(11635-P), 93- 2 BCA 75,773, 1993 BPD 16 (increased amount for pursuing cost award justified because Board and Government required more information). We thus reduce the fees requested to a total of $10,000, an amount more in keeping with the number of hours properly expended to recoup protest costs here.[foot #] 5 Two other general items remain to be addressed. The Air Force asserts that the in-house counsel fees documented in the ----------- FOOTNOTE BEGINS --------- [foot #] 5 This is still a higher award of such costs than was claimed by the three other protesters. We nonetheless deem it reasonable to permit this somewhat higher recovery because of the more extensive legal analysis and documentation provided by GTSI. ----------- FOOTNOTE ENDS ----------- supplemental submission should be denied as untimely and duplicative. In-house counsel costs are recoverable. 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. Our review of the documentation does not show these charges to be clearly duplicative. Nor was the submission of the fees untimely. Thus, the amount claimed, $14,671.88, is granted. Finally, we note that the out-of-pocket expenditures, which the Air Force has not challenged with any particularity, are properly documented and generally reflect costs that are routinely reimbursed by the Board under the Brooks Act. The only such costs that appear not properly recoverable would be an appropriate proportionate amount of the out-of-pocket expenditures associated with the post-decisional activities in "preserving" GTSI's victory. The disbursements associated with post-decisional activities total $1,716.44. Of this amount we award only $137.32.[foot #] 6 Total out-of-pocket expenditures of $81,328.04 are granted. There is one additional point involving the appropriateness of an overall reduction in the fee award requested by GTSI, however. In exercising discretion to award the costs of pursuing a protest to a prevailing protester, the Board has recognized that there are circumstances when an award should be reduced 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. The "make whole" policy underlying CICA's cost- shifting provision should be viewed in the context of the need to balance the competing goals of encouraging vindication of legal rights while confining costs to those appropriately incurred by the litigant in order to prevail. See Sterling Federal Systems, Inc. v. Goldin, 16 F.3d 1177, 1187 (Fed. Cir. 1994). In various contexts, it has been recognized that "[w]here . . . claims are based on different facts and legal theories, and the [applicant] has prevailed on only some of those claims, . . . 'these unrelated claims [should] be treated as if they had been raised in separate lawsuits, and therefore no fee may be awarded for services on the unsuccessful claim.'" Texas State Teachers Ass'n v. Garland Independent School District, 489 U.S. 782, 789 (1989) ----------- FOOTNOTE BEGINS --------- [foot #] 6 The out-of-pocket costs incurred in connection with post-decisional activities were charged to a separate account, so that it is possible to isolate the expenditures associated with this category of costs. We deduct a proportionate amount of the claimed expenses of $1,716.44, because the documentation, while adequate to determine that charges were incurred, does not permit us to determine which costs are attributable to recoverable, rather than non- recoverable, activities. See CACI, Inc. v. Department of the ___ _________________________________ Army, GSBCA 12423-C(11523-P), 1994 BPD 107, at 6 (May 31, ____ 1994). ----------- FOOTNOTE ENDS ----------- (quoting Hensley v. Eckerhart, 461 U.S. 424, at 435 (1983)). Relying on this rationale, the Board has concluded that where there are claims that are "distinct in all respects from [the] successful claims, the hours spent on [the] unsuccessful claim[s] should be excluded in considering the amount of a reasonable fee." RMTC Systems, Inc. v. Nuclear Regulatory Commission, GSBCA 11893-C (11734-P), 93-3 BCA 26,147, 1993 BPD 216, modified on reconsideration, 94-2 BCA 26,670, 1994 BPD 13 (quoting Hensley v. Eckerhart, 461 U.S. at 440); accord CACI, Inc. v. Department of the Army, GSBCA 12423-C(11523-P), 1994 BPD 107 (May 31, 1994); Storage Technology Corp., GSBCA 9939-C (9793-P), 91-3 BCA 23,041, 1990 BPD 150; Digital Equipment Corp., GSBCA 9285-C(9131-P), 89-3 BCA 22,181, 1989 BPD 248. Here, the Board views 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 (approximately one-half day of the nine day hearing) 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. The records adduced by GTSI, although sufficiently well documented to establish that the time charged was properly devoted to the Desktop IV litigation, are not detailed enough to enable the Board to ascertain the precise amount of time devoted to unsuccessful claims. A five percent reduction in fees was stipulated to by EDS and the Air Force in connection with the EDS cost motion. See Electronic Data Systems Corp. v. Department of the Air Force, GSBCA 12276-C(12028-P) (June 21, 1994). Based on the Board's independent review of GTSI's cost records, the transcript, and the post-hearing briefs, we conclude that a five percent reduction of the overall amount to which GTSI would otherwise be entitled adequately covers the downward adjustment of fees that are warranted in these circumstances.[foot #] 7 ----------- FOOTNOTE BEGINS --------- [foot #] 7 In exercising our discretion to determine an appropriate amount to be awarded for protest costs, we have applied this percentage reduction to all of the remaining cost cases associated with these protests. ----------- FOOTNOTE ENDS ----------- Decision For the reasons stated above, protester's motion is GRANTED IN PART. Protester is awarded $473,047.67. 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