Sterling Federal Systems, Inc. v. Daniel S. Goldin, Administrator, National Aeronautics and Space Administration

16 F.3d 1177, 39 Cont. Cas. Fed. 76,615, 94 Daily Journal DAR 4080, 1994 U.S. App. LEXIS 1383, 1994 WL 24295
CourtCourt of Appeals for the Federal Circuit
DecidedJanuary 28, 1994
Docket92-1552
StatusPublished
Cited by42 cases

This text of 16 F.3d 1177 (Sterling Federal Systems, Inc. v. Daniel S. Goldin, Administrator, National Aeronautics and Space Administration) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sterling Federal Systems, Inc. v. Daniel S. Goldin, Administrator, National Aeronautics and Space Administration, 16 F.3d 1177, 39 Cont. Cas. Fed. 76,615, 94 Daily Journal DAR 4080, 1994 U.S. App. LEXIS 1383, 1994 WL 24295 (Fed. Cir. 1994).

Opinion

*1179 ARCHER, Circuit Judge.

Sterling Federal Systems, Inc. 1 (Sterling) appeals from a decision of the General Services Administration (GSA) Board of Contract Appeals (GSBCA or board), Sterling Federal Systems, Inc. v. National Aeronautics and Space Administration, GSBCA No. 10000-C (9835-P), 92-3 BCA (CCH) ¶ 25,118, 1992 WL 115281 (May 22, 1992). The GSBCA refused to award Sterling expert consultant fees and employee salaries incurred in filing and successfully pursuing a procurement protest, except to the extent that the consultant and employees appeared as witnesses before the board. Because the board erred in holding that 40 U.S.C. § 759(f)(5)(C)(i) (1988) authorizes an award of only those costs that a federal court may allow under 28 U.S.C. §§ 1920, 1821 (1988) and attorney’s fees, we vacate the decision and remand for a redetermination of entitlement.

I.

On December 2, 1988, Sterling filed an administrative protest with the GSBCA, challenging the decision of the National Aeronautics and Space Administration to select another bidder for final contract negotiations for the procurement of automatic data processing equipment. See 40 U.S.C. § 759(f) (1988). Because the protest involved sensitive procurement information and proprietary information furnished by the parties, the board issued a protective order on December 9 that precluded Sterling’s personnel from viewing any documents marked protected that were submitted by another party to Sterling’s counsel or to the board. The effect of this order was to prevent Sterling’s personnel from assisting Sterling’s counsel in pursuing the protest. As a substitute for the technical expertise of Sterling’s personnel, Sterling’s counsel retained an independent expert consultant.

Eventually, Sterling prevailed. Protest of Sterling Fed. Sys., Inc., GSBCA No. 9835-P, 1989 WL 20316 (Mar. 6, 1989) (protected material disclosable only in accordance with board order) (notice of decision published at 89-2 BCA ¶ 21,662). On April 5, 1989, Sterling filed a Motion for Award of Protest Costs and Attorneys’ Fees pursuant to the Competition in Contracting Act of 1984, 40 U.S.C. § 759(f)(5)(C) (“CICA”). 2 The CICA provides in relevant part:

Whenever the board [determines that a challenged agency action violates a statute or regulation or the conditions of any delegation of procurement authority], it may ... 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.

40 U.S.C. § 759(f)(5)(C).

Sterling sought to recover from the United States $598,908.34 in attorneys’ fees and costs incurred in filing and successfully pursuing its protest. Sterling delineated these fees and costs as follows 3 : $397,515.25 for its attorneys’ fees billed at an hourly rate; $154,503.43 for its attorneys’ “out-of-pocket disbursements” 4 ; and $46,888.86 for its “in- *1180 house labor expenses,” meaning the full daily salaries of several of Sterling’s employees who participated in the protest. 5

In a 7-4 decision, the GSBCA awarded Sterling all of its attorneys’ hourly-billed fees, awarded Sterling all of its attorneys’ out-of-pocket disbursements except for the expert consultant costs, and denied Sterling the costs of its salaried employees. The GSBCA did, however, permit an award of 30 dollars plus travel expenses for each day the consultant or an employee testified as a witness in the protest proceeding or was required to await attendance at the hearing. 6

The board recognized that the award was a departure from its past practice in automatic data processing equipment procurement protests, which was to award as the costs of filing and pursuing the protest “all necessary and reasonable expenses incurred in doing so.” 92-3 BCA at 125,219. The board stated that under this previous standard, it commonly awarded the full amount of expert consultant fees:

We have ... consistently permitted recovery of the reasonable costs of expert consultants and witnesses.... Our earlier precedents so held, because, in many instances, the retention of one or more independent consultants is necessary for any effective pursuit of a protest.
Typically in a protest, retained attorneys need someone knowledgeable in computer technology to explain an opponent’s proposal. Such proposals nigh invariably involve proprietary and procurement sensitive information, which retained counsel obtain under our protective order. The protected information is not of the sort that is particularly meaningful to the great majority of attorneys, who often lack the technical education or background to adequately evaluate such information. However, retained counsel cannot disclose this essential evidentiary material to their client or their clients’ technical staffs, none of whom could qualify for access to such information under our protective orders.
Thus, in order to reasonably understand the facts of the protest, the attorney has no choice but to retain the services of expert consultants, who, being completely independent from the attorney’s client, may obtain access to the protected material under the Board’s standard protective order. In short, in protests involving a challenge to a competitor’s proposal, retaining experts and consultants is frequently imperative.

Id.

The board believed, however, that it could not award expert fees under the CICA based on its interpretation of the recently issued Supreme Court decision in West Virginia University Hospitals, Inc. v. Casey, 499 U.S. 83, 111 S.Ct. 1138, 113 L.Ed.2d 68 (1991). According to the board, West Virginia held “that the word ‘costs,’ appearing in fee-shifting statutes, is a term of art which means those taxable costs traditionally associated with ordinary litigation, as set out in 28 U.S.C. § 1920, and any additional costs must be identified as recoverable within the same fee-shifting statute.” 7 92-3 BCA at 125,220.

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16 F.3d 1177, 39 Cont. Cas. Fed. 76,615, 94 Daily Journal DAR 4080, 1994 U.S. App. LEXIS 1383, 1994 WL 24295, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sterling-federal-systems-inc-v-daniel-s-goldin-administrator-national-cafc-1994.