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Considerations for the New Contract Trial Attorney:

 

A Primer on Costs, Fees, and Interest in Contract Appeal Litigation

 
 
   
   
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(Credit: istockphoto.com/bbbrrn)

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You are the newest trial attorney in the Army’s Contract and Fiscal Law Division (KFLD). You’ve gotten up to speed on all the ongoing cases you inherited upon your arrival and are working through the issue of entitlement for a particular appeal before the Armed Services Board of Contract Appeals (the Board or ASBCA). After days of case law research, Rule 4 file1 review, phone calls with the contracting officer, and number-crunching your way through Excel spreadsheets, you think you know the Army’s chances of winning the appeal if it goes to hearing before the Board. You sit down at your computer, pull up a litigation risk assessment example to help guide you in drafting your own, and begin typing. You are almost finished with your risk assessment when you spot a section in the template for “litigation costs” and stop. What litigation costs should you be considering? If the Board were to sustain the appeal (i.e., the Army were to lose), would there be costs beyond the underlying claim amount affecting your client’s financial exposure in the case?

For judge advocates (JAs) practicing contract appeal litigation for the first time, there can be a steep learning curve. While the skills required to assess a contract appeal on the merits are not so different from those required to assess issues in non-contract-related litigation, reaching a conclusion about the overall financial risk to which the Army will be exposed by taking a case to hearing—especially if the appeal is sustained—is not necessarily intuitive for first-time practitioners.

This article will provide new JA trial attorneys an overview of some common costs and fees associated with ASBCA litigation, including those associated with the loss of a case. The purpose is to help the new JAs better understand the Army’s financial exposure in any given appeal and to prepare them to better litigate before the Board, even after a loss on the merits. A trial attorney who is familiar with the costs that should be included in a financial risk assessment will be more successful in navigating the appeals to which they are assigned. Throughout the life cycles of those appeals, the trial attorney will be efficacious in providing thorough and useful advice about best courses of action to contracting officers and KFLD’s Chief Trial Attorney. The article first discusses one of the most common considerations associated with losing on the merits in ASBCA litigation—the costs and attorney’s fees associated with litigating against small-business appellants. These costs and fees are statutorily derived from the Equal Access to Justice Act (EAJA),2 and the discussion addresses EAJA’s purpose, its relevant costs and fees, which appellants are eligible for reimbursement of those costs, and under what circumstances. The article then addresses the interest of the Contract Disputes Act (CDA)3—how it is calculated and how it can increase the Army’s exposure to financial risk in litigation—as well as the general litigation costs often associated with taking an ASBCA appeal to hearing on the merits.

The Equal Access to Justice Act

The EAJA was originally enacted in 1980 as Public Law 96-481.4 Signed into law by President Jimmy Carter, the legislation “provides small businesses with ‘equal access to justice’” and is designed to “strike a fair balance between the Government’s obligation to enforce the law and the need to encourage business people with limited resources to resist unreasonable Government conduct.”5 Due to a sunset provision within the act, the legislation needed to be “permanently reauthorized” to survive past September 1984.6 Congress ultimately reauthorized the legislation and President Ronald Reagan signed the permanent EAJA into existence on 8 August 1985.7

At its core, EAJA was designed to “ensure access to justice for individuals and small businesses and organizations who are involved in civil disputes with the Federal Government.”8 Practically, it allowed small businesses that defeated the federal government in litigation to recover their costs,9 in order to “eliminate the possibility of...Pyrrhic victories”10 for businesses that would prevail on the merits of a case, but bankrupt themselves in the process. Though EAJA has endured multiple amendments since its permanent reenactment in 1985,11 in practice, its effect remains largely the same: enabling small businesses to recover costs and attorneys’ fees accrued during litigation against the federal government when certain prerequisites are met.12

Prerequisites to Recovery Under EAJA

A party litigating against the United States (U.S.) government—such as an appellant in ASBCA litigation—is eligible to recover “fees and other expenses incurred” in connection with the proceedings if the party meets the size requirement and is considered a “prevailing party,” so long as the position of the government was not “substantially justified.”13 The following sections explain how to determine a party’s EAJA eligibility based on size, how to determine whether a party has “prevailed” in a proceeding, and what constitutes a “substantially justified” position on the part of the government.

Eligible “Party” (i.e., Size Requirement)

Whether an appellant meets the definition of a “party” eligible for reimbursement under EAJA depends upon the appellant’s net worth (i.e., size) at the time of the filing of the appeal.14 The net worth cutoff amount to qualify as a small business under EAJA depends on whether the appellant seeking EAJA recovery is an individual or a business.15 For an individual, the net worth must not exceed $2 million; for a business, the net worth must not exceed $7 million.16 Moreover, in addition to the $7 million cap on net worth for a business, it must also have had no more than five hundred employees at the time of the filing of its appeal.17 If an appellant has not exceeded these caps, if it “prevailed” in the litigation, and if the position of the government during that litigation was not “substantially justified,” then it is an eligible “party” for EAJA purposes and can seek recovery of fees and expenses from the government.18

“Prevailing” Party Status

While the text of EAJA defines an eligible “party” for practitioners, it does not explicitly define the term “prevailing.” What constitutes a prevailing party for EAJA award purposes has been established over the years through case law from federal circuit courts, the ASBCA, and the Supreme Court.19 Case law from the ASBCA describes a “prevailing party” as one that “succeed[s] on any significant issue in litigation which achieves some of the benefit the party sought in bringing the suit.”20 In order for an appellant to establish “prevailing party” status for EAJA purposes, there must be “a Board decision sustaining the appeal” or “a consent judgment, providing a material alteration in the legal relationship of the parties.”21 Notably, a Board order dismissing an appeal as moot, or a Board order dismissing an appeal by joint stipulation of the parties, will not establish prevailing party status for EAJA purposes.22 The appeal of Tech Projects, LLC, illustrates the type of situation in which such distinctions matter.

During the pendency of the Tech Projects, LLC, appeal, the contracting officer involved came to the conclusion that it was in the best interests of the Army to amend the final decision upon which the appeal was based.23 In amending the final decision, the contracting officer agreed to pay the appellant the amount sought in its original claim, plus accrued interest.24 As a result, the Army filed a motion to dismiss the appeal as moot “inasmuch as the contracting officer had granted the relief sought by Tech Projects in its claims.”25 The Board granted the dismissal and denied Tech Projects’ subsequent EAJA application for fees and expenses.26 Tech Projects argued that “because the government ‘surrendered before the merits hearing, giving [appellant] everything it had claimed,’” Tech Projects was the “prevailing party” for those claims.27 The Board rejected this argument, clearly stating that “because Tech Projects did not secure either a decision sustaining its appeal, or a consent judgment, it lacks ‘prevailing party’ status.”28 A year and a half later, the Board stood by its prevailing party analysis when it denied Tech Projects’ motion to reconsider its determination.29

The Board shows no indication of shifting its approach to evaluating prevailing party status. As recently as July 2019, in the appeal of Patriot Group International, the Board declined to determine prevailing party status for an appellant whose appeal was dismissed as moot after the government paid the claims upon which the appeal was based.30 The Board has made clear that “an EAJA applicant must show that it obtained an enforceable judgment on the merits or a court-ordered consent decree that materially altered the legal relationship between the parties....”31 For this reason, practitioners should be ready to combat any argument made by opposing counsel that a Board dismissal is sufficient to establish the status necessary for an award under EAJA.

Government Position Not “Substantially Justified”

If an appellant qualifies as a party eligible for reimbursement under EAJA, and the appellant is also a prevailing party, then the government will reimburse the appellant for “fees and other expenses incurred...in connection with that proceeding, unless...the position of [the government] was substantially justified or...special circumstances make an award unjust.”32 In other words, while succeeding on the merits in an appeal will generally allow the appellant to be reimbursed under EAJA, it is not always the case. As noted by the ASBCA in the appeal of Job Options, Inc., EAJA “was not intended as an automatic fee-shifting device.”33 The burden to prove substantial justification, however, lies with the government34 and is determined using the “administrative record [of the appeal], as a whole....”35 The government positions that must be substantially justified are those leading to the litigation and those taken by government counsel during the course of the appeal.36 A position is considered substantially justified if it has “a reasonable basis in law and fact,” meaning that in some circumstances, “a position can be justified even though it is not correct.”37

For example, the appeal of Job Options, Inc., is an appeal in which the appellant prevailed on the merits; however, the Board denied recovery under EAJA because it found the government’s position in the litigation to be substantially justified.38 The Board based its substantial justification determination on several factors: its merits decision turned on close questions of fact that the Board alone could resolve; “the pre-hearing documentary record established a prima facie case supporting the government’s” pre-litigation actions; and the positions taken by the government during litigation were “supported by legal precedent” from cases involving similar underlying facts.39 The Board further explained that it is not uncommon to find the government substantially justified in litigation where “the evidence supporting [a] contractor’s position was primarily developed and established at hearing,”40 rather than developed during the compilation of the Rule 4 file and during discovery.

Another appeal decision that sheds light on when the government’s position will be considered substantially justified is that of Maggie’s Landscaping, Inc. (Maggie’s). In Maggie’s, while the appellant succeeded on the merits, its success was due only to the Board searching the administrative record on its “own initiative” to find evidence to support a theory that the appellant failed to put forward.41 In situations where the basis of the appellant’s success on the merits “differs from that considered or argued by either party, and was first advanced by the Board,” it is not unreasonable for the government’s litigation position to be considered substantially justified.42 In Maggie’s, the Board denied the requested EAJA award, finding the government’s “conduct and its litigation position” reasonable in fact and law, and therefore, substantially justified within the meaning of EAJA.43

Note that even if the government’s position is found to be not substantially justified, there are certain limited circumstances in which “an award of attorney’s fees still may be denied” to an appellant.44 Denial of fees under EAJA may occur in the event that the Board determines “special circumstances” exist that would make the award “unjust.”45 However, pinning down what constitutes such a special circumstance is challenging. The legislative history related to the original EAJA legislation tells us that the special circumstances exception is a:

...safety valve [that] helps to insure that the Government is not deterred from advancing in good faith the novel but credible extensions and interpretations of the law that often underlie vigorous enforcement efforts. It also gives the court discretion to deny awards where equitable considerations dictate an award should not be made.46

The Board referenced this safety valve in an EAJA application opinion from 1992, in which it determined that an appellant’s conduct did establish special circumstances within the meaning of EAJA.47 In that case, the Board explained that “[t]he sheer unreasonableness of [appellant’s] claiming for double the amount [appellant] knew or should have known it was entitled to requires” denial of an EAJA award on the basis of the special circumstances exception.48 Since that mention in 1992, however, it does not appear to be a theme in further ASBCA case law.

A little more clarity on what constitutes special circumstances under EAJA can be found in opinions from the Court of Federal Claims (COFC). In a 2011 opinion, COFC stated that “[c]ourts look to equitable principles such as the doctrine of ‘unclean hands’ in determining whether there are special circumstances that would make an Equal Access to Justice Act...award unjust.”49 Specifically, in that 2011 opinion, COFC describes “unclean hands” as situations where “a plaintiff purposefully takes advantage of government misconduct and subsequently challenges that same misconduct,”50 using as an example a case in which “a plaintiff successfully overturned a regulatory fine on procedural grounds but knowingly violated the governing statute.”51 This gives the impression that situations qualifying as unjust under the special circumstances exception of EAJA appear to be those in which appellants try to game the system or circumvent principles of fairness.

Given the dearth of ASBCA EAJA award cases that turn on the special circumstances exception, a new trial attorney should know that the exception exists and be ready to consider arguing the exception if the appellant’s conduct implicates it. However, until such a time presents itself, that trial attorney will be much better served by focusing their time on understanding the three EAJA prerequisites already discussed—eligible party status, prevailing party status, and substantial justification. With an understanding of those three prerequisites, a new trial attorney will be well on their way to seeing the whole picture when it comes to evaluating the government’s risk exposure for any given case.

Recoverable Fees and Expenses

If an appellant is a prevailing party within the meaning of EAJA, and the government failed to show its position was substantially justified, that appellant is entitled to “fees and other expenses incurred...in connection with” the appeal.52 The Equal Access to Justice Act states that recoverable fees and expenses include reasonable expenses associated with experts, studies, analyses, engineering reports, or tests “necessary for the preparation of the party’s case,” as well as reasonable attorney or agent fees.53

The statute caps recoverable attorney and agent fees as $125 per hour. In the absence of special circumstances, it caps recoverable expert witness compensation at the “highest rate” paid by the government to its own expert witnesses.54 Note that expenses incurred in preparation of the claim upon which an appeal is based are generally not reimbursable under EAJA, only those expenses incurred while preparing to file the appeal and during its subsequent litigation.55 Moreover, the Board may reduce or deny the award of any expenses incurred due to an appellant “engag[ing] in conduct which unduly and unreasonably protracted the final resolution of” the appeal.56 The following sections examine the limits on the recoverable fees and expenses described above.

Recoverable Attorney Fees

As noted above, recoverable attorney fees generally cannot exceed $125 per hour. However, EAJA allows for recovery of more than this $125 rate in certain limited circumstances.57 A prevailing party will be reimbursed for attorney fees exceeding the $125 rate if the government concludes “by regulation that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys or agency for the proceedings involved, justifies a higher fee.”58 In a 2017 ASBCA decision, the Board made it clear that it cannot approve the cost of living or special factor increases absent a government agency determination.59 As noted in the appeal of ABS Baumaschinenvertrieb, GmbH, the Board will not award attorney fees exceeding the statutory $125 rate where “the Department of Defense has not issued such a regulation authorizing enhancement of fees based on cost of living or any other special factor.”60 Practically, this means that a government trial attorney is usually safe to use the $125-per-hour rate for attorney fees to estimate potential reimbursement by the appellant pursuant to an EAJA award.

Appeal and Hearing Preparation Expenses

Aside from fees recoverable due to the billable hours of attorneys, certain expenses associated with legal work are also recoverable. These recoverable expenses include, but are not limited to: legal assistants, copying costs, attorney travel costs, hearing transcript costs, phone bills, and trial exhibit preparation.61 The reasonableness of these expenses is determined by the “prevailing market rates for the kind and quality of the services furnished” and not limited by government travel and per diem rates.62 Generally, the Board will award reimbursement of reasonable travel expenses to a prevailing party so long as those expenses are “itemized and documented.”63

Witness Expenses

In addition to reasonable expenses incurred from the legal work involved in an appeal, certain witness expenses are also recoverable—for example, reasonable expert witness fees.64 These fees are capped at the amount paid by the government to its own expert witnesses in the case.65 Travel expenses associated with expert witnesses are also generally recoverable when those expenses are reasonable and “itemized and documented.”66 The standard for reasonableness is based on “prevailing market rates” and is not limited to government travel and per diem rates.67

Expenses for fact witnesses, however, are generally not recoverable,68 though “certain payments to non-employees and consultants may be compensable.”69 One example of such a case is in Optimum Services, Inc. In Optimum Services, Inc., the Board awarded the appellant reasonable expenses associated with a non-employee consultant who had been paid to do work related to the appeal.70 Generally speaking, unless a fact witness for the appellant is a non-employee consultant of some type, expenses for that witness will not be reimbursable under EAJA at the Board.

The Procedural Process

A government trial attorney will want to be aware of how recovery under EAJA works as early as the initial risk assessment phase of litigation. However, in practice, the detailed potential recovery of the appellant under EAJA will not become the primary focus for that attorney until the “final disposition” of the appeal has been reached.71 An appellant has thirty days from the date of its “final disposition” decision on the merits to submit its EAJA application to the Board.72 The application should show that the appellant is “a prevailing party and is eligible to receive an award” under EAJA, and should include “the amount sought, including an itemized statement[s]...stating the actual time expended and the rate at which other fees were computed.”73

Once the government receives the EAJA application filed by the appellant, it has thirty days to file an answer.74 If the government fails to answer the application within those thirty days—absent requesting an extension or filing a statement of intent to negotiate—the Board has the discretion to treat the non-answer “as a general denial to the application.”75 If the government files its answer in a timely manner, the appellant has fifteen days to reply—should they choose to do so.76 Generally, the Board will decide the EAJA application based on the arguments of the parties in the application, answer, and reply, along with the evidence submitted in support of those arguments.77

Addendum I to the Board Rules is designed “to assist the parties in the processing of EAJA applications for award of fees and other expenses incurred in connection with appeals” and provides detailed information for parties litigating an EAJA application at the conclusion of an appeal.78 If a trial attorney finds themselves in receipt of an EAJA application, this addendum is the first place they should look to familiarize themselves with the requirements of the impending process. Once familiar with the procedural and substantive requirements for an appellant to recover under EAJA, post-merits litigation should be easily manageable.

Contract Disputes Act Interest

Another cost associated with the loss of government contract litigation is Contract Disputes Act (CDA)79 interest. “Accrued interest associated with disputes against the United States is generally not recoverable unless expressly allowed by a statute or the underlying contract.”80 The CDA, however, is just such a statute, and it allows recovery of interest accrued on a claim found due against the government.81 Specifically, the CDA states: “Interest on an amount found due a contractor on a claim shall be paid to the contractor for the period beginning with the date the contracting officer receives the contractor’s claim...until the date of payment of the claim.”82 In other words, if the appellant succeeds in an appeal at the ASBCA, the Army will need to pay the appellant interest on the amount it is owed, dating all the way back to the original claim that formed the basis of the ASBCA litigation.83

The four factors involved in calculating the interest owed by the government to the appellant on a meritorious claim under the CDA are: the date the contracting officer received the appellant’s claim that led to the litigation; the date the Army will pay the amount found due; the amount found due to the appellant; and the appropriate interest rates.84 The CDA instructs that, “[i]nterest shall accrue and be paid at a rate which the Secretary of the Treasury shall specify as applicable for each successive [six]-month period.”85 These rates specified by the Secretary of the Treasury are published in the Federal Register twice a year86 and are also located on the Department of the Treasury website.87 In practice, those who regularly engage in government contract litigation will use the rates published by the Secretary of the Treasury to create some version of an interest calculator for use with claim amounts found due.88 Trial attorneys who are new to an office such as KFLD should use whatever CDA interest rate calculator is preferred by their workplace.

Because cases litigated in front of the ASBCA can take years to resolve,89 the practical effect of taking a case to hearing and losing is that the government may pay much more than the original amount claimed by the appellant. For example, the CDA interest on a claim of $250,000 over a five-year period between January 2015 and January 2020 would amount to $32,672.24.90 The CDA interest on a claim of $2 million over that same five-year period would amount to $261,377.89.91 For contractor-appellants performing expensive government contracts, it is not abnormal for appeals to involve claimed amounts of over $10 million.92 For a claim of $15 million over the same five-year period as used in previous examples, CDA interest would amount to $1,960,334.18.93 Depending on the size of the amount found due to the appellant, and the time it took to move from claim submission to appeal decision by the Board, the government could face significant extra costs in the event of a post-hearing loss. Trial attorneys should consider estimated CDA interest as part of the overall risk to which the Army is exposed when analyzing any given case on their docket.

Litigation Costs, Generally

In addition to the statutorily based costs discussed earlier, there are other litigation costs that a trial attorney should consider when assessing the government’s overall risk for an appeal moving forward to hearing. Those include costs associated with discovery, depositions, and witnesses testifying at hearings.

With respect to discovery and depositions, costs will depend on a number of factors. Factors with significant impact include: range and complexity of information needed to determine entitlement in a case; level of difficulty for locating documents crucial to entitlement; and whether expert reports are required. If the issues underlying an appeal are complex and entitlement hinges on answering many close questions of fact, greater costs become more likely. To answer close factual questions, a trial attorney may have to search for and evaluate more documents, as well as find and talk to more potential witnesses. As the number of people identified with information necessary to understanding the underlying facts of a case goes up, so do deposition costs. Once an attorney can identify the number of individuals they intend to depose, calculation of costs associated with those depositions are simple to estimate. The costs include the hiring of a deposition or court-reporting firm to transcribe and record the depositions and produce transcripts of those depositions, as well as potential travel costs for the trial attorney(s) taking the depositions. These costs combined can easily result in the deposition of just one person costing several thousand dollars.94

In some instances, a lengthy period of time between contract performance and filing of a claim by the appellant can create unexpected costs. For example, if the government has since stopped using a particular electronic filing system or software relevant to issues in an appeal, the government may need to hire a contractor to locate or retrieve documents relevant to the litigation. While such a scenario will not apply in every case, it illustrates that a trial attorney should be ready to issue-spot circumstances unique to each appeal that may affect costs in atypical ways.

If a trial attorney anticipates taking the appeal to a contested hearing, costs related to fact witnesses will depend on the number of individuals the government will need to call to testify at the hearing. A trial attorney can anticipate the per-person cost of government fact witnesses to range on average from around $2,000 to around $4,000.95 In some cases, entitlement will turn on an issue requiring expert assistance or an expert report. In such cases, a cost estimate will depend on the type of expertise required, as well as market rates for the type of expertise and report needed. This is something that a trial attorney will need to research as it comes up in a particular appeal, understanding that these expert-related costs can far exceed those for fact witnesses.

In practice, many of the dollar amounts used to estimate these litigation costs will come from an office’s institutional knowledge and experience. A new trial attorney need only walk down the hall to the office of one of their teammates and ask what average costs have been for deposition transcript services, or witness costs, or any cost they have identified as relevant to an appeal on which they are working. Chances are that one of their colleagues will have recent numbers for them to use as a starting point for their own cost estimates. With a little time andunfortunatelya little math, that trial attorney will be well on their way to identifying the total costs impacting the overall financial risk to which the government could be exposed.

Conclusion

When beginning an assignment in a new area of practice, a JA will have a lot of information to digest and apply in order to be successful. The sooner a new trial attorney understands that there are litigation costs beyond those attributable to an appeal’s underlying claim, the sooner they will be able to provide an accurate assessment of financial risk to stakeholders in the appeals process, such as the relevant contracting officer and the Chief Trial Attorney, KFLD. A solid litigation strategy will always involve understanding the risks present in a given case, financial or otherwise. By understanding the various factors that can affect overall financial risk in a case—awards of attorney fees, statutory interest owed, and discovery, deposition, and hearing costs—an attorney will be better situated to strategize with their client, anticipate potential litigation issues, mitigate risks, and steer an appeal to its best possible outcome. TAL

 


MAJ Mahaney is currently the Chief of National Security Law in Fort Drum, New York.



Notes

1. The “Rule 4 file” is the appeal file compiled by the parties that consists of the documents that the government and the appellant believe to be “relevant to the appeal, including: (1) The decision from which the appeal is taken; (2) The contract, including pertinent specifications, amendments, plans, and drawings; [and] (3) All correspondence between the parties relevant to the appeal, including any claim in response to which the decision was issued.” Armed Servs. Bd. of Cont. Appeals, Rules of the Armed Services Board of Contract Appeals, rule 4(a) (July 21, 2014), http://www.asbca.mil/Rules/forms/Final%20Rule%20Formatting%20pgl.pdf#page=20. See also 48 C.F.R. Ch. 2, App. A, Pt. 2.

2. Equal Access to Justice Act, 5 U.S.C. § 504 (2018).

3. 41 U.S.C. §§ 7101–7109.

4. Lowell E. Baier, Reforming the Equal Access to Justice Act, 38 J. Legis. 1, 22 (2012).

5. Id. at 22–23 (citing Presidential Statement on Signing H.R. 5612 into Law, 16 Weekly Comp. Pres. Doc. 2381 (Oct. 21, 1980)).

6. Id. at 23.

7. Id. at 23–24.

8. Id. at 24 (citing 131 Cong. Rec. 16,916 (1985) (statement of Rep. Kastenmeier)).

9. Id. (citing 131 Cong. Rec. 20,354 (1985) (statement of Sen. Bumpers)).

10. Id. (citing 131 Cong. Rec. 20,354 (1985) (statement of Sen. Domenici)).

11. Id. at 25.

12. 5 U.S.C. § 504. See also Major Shay Standford, The Equal Access to Justice Act: Practical Applications to Government Contract Litigation, Army Law., Apr. 2012, at 4, 4.

13. 5 U.S.C. § 504(a)(1).

14. 5 U.S.C. § 504(b)(1)(B). See also Armed Servs. Bd. of Cont. Appeals, Rules of the Armed Services Board of Contract Appeals, Addendum I, para. (c)(2) (21 July 2014), http://www.asbca.mil/Rules/forms/Final%20Rule%20Formatting%20pgl.pdf#page=20 [hereinafter ASBCA Rules: Addendum I].

15. 5 U.S.C. § 504(b)(1)(B). The “business” category includes “any owner of an unincorporated business, or any partnership, corporation, association, unit of local government, or organization….” Id.

16. Id. Note, however, that certain non-profit organizations and charitable cooperative associations—as well as small entities defined in 5 U.S.C. § 601 (for purposes of 5 U.S.C.§ ٥٠٤ (a)(4))—can be eligible parties “regardless of the[ir] net worth.” Id.

17. Id.

18. 5 U.S.C. § 504(a)(1), (b)(1)(B).

19. See, e.g., Buckhannon Bd. and Care Home, Inc. v. West Virginia Dep’t of Health and Human Res., 532 U.S. 598, 121 S. Ct. 1835, 149 L. Ed. 2d 855 (2001); Rice Services, Ltd. v. United States, 405 F.3d 1017, 1025 (Fed. Cir. 2005); Brickwood Contractors, Inc. v. United States, 288 F.3d 1371 (Fed. Cir. 2002), cert. denied, 537 U.S. 1106, 123 S. Ct. 871, 154 L. Ed. 2d 775 (2003); Lasmer Indus., Inc., ASBCA No. 56411, 2010-2 BCA ¶ 34,491, 170,123.

20. Maggie’s Landscaping, Inc., ASBCA No. 56748, 2012-1 BCA ¶ 34,974, 171,917 (citing Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S. Ct. 1933, 76 L. Ed. 2d 40 (1983)).

21. See Lasmer Indus., Inc., 2010-2 BCA ¶ 34,491, 170,123; see also Tech Projects, LLC, ASBCA No. 58789, 2016-1 BCA ¶ 36,443, 177,616.

22. See Patriot Grp. Int’l, Inc., ASBCA No. 60950, 2019-1 BCA ¶ 37,399, 181,807.

23. Tech Projects, LLC, 2016-1 BCA ¶ 36,443, 177,615.

24. Id.

25. Id.

26. Id. at 177,616.

27. Id.

28. Id.

29. Tech Projects, LLC, ASBCA No. 58789, 2018-1 BCA ¶ 36,946, 180,041.

30. Patriot Grp. Int’l, Inc., ASBCA No. 60950, 2019-1 BCA ¶ 37,399.

31. Tech Projects, LLC, 2018-1 BCA ¶ 36,946 (citing Rice Services, Ltd. v. United States, 405 F.3d 1017, 1025 (Fed. Cir. 2005)).

32. Equal Access to Justice Act, 5 U.S.C. § 504(a)(1) (2018).

33. Job Options, Inc., ASBCA No. 56698, 2011-1 BCA ¶ 34,663, 170,761 (citing Gavette v. OPM, 785 F.2d 1568, 1578–79 (Fed. Cir. 1986); Gava v. United States, 699 F.2d 1367 (Fed. Cir. 1983)).

34. Id. (citing Cmty. Heating & Plumbing Co. v. Garrett, 2 F.3d 1143, 1145 (Fed. Cir. 1993); Oneida Construction, Inc., ASBCA No. 44194 et al., 95-2 BCA ¶ 27,893).

35. 5 U.S.C. § 504(a)(1).

36. Maggie’s Landscaping, Inc., ASBCA No. 56748, 2012-1 BCA ¶ 34,974, 171,918.

37. Id. (citing Pierce v. Underwood, 487 U.S. 552, 566 n.2, 108 S. Ct. 2541, 101 L. Ed. 2d 490 (1988)).

38. See Job Options, Inc., 2011-1 BCA ¶ 34,663.

39. Id. at 170,761.

40. Id.

41. Id. at 171,919.

42. Id. (citing Henry Angelo & Co., ASBCA No. 43669, 95-1 BCA ¶ 27,426, 126,684).

43. Id.

44. Gregory C. Sisk, The Essentials of the Equal Access to Justice Act: Court Awards of Attorney’s Fees for Unreasonable Government Conduct (Part Two), 56 La. L. Rev. 1, 93 (1995). See also Ideal Electronic Security Company, ASBCA No. 49547, 99-1 BCA ¶ 30,228, 149,545.

45. Equal Access to Justice Act, 5 U.S.C. § 504(a)(1) (2018).

46. Sisk, supra note 44, at 93–94 (citing H.R. Rep. No. 1418, 96th Cong., 2d Sess. 11 (1980)).

47. Coastal Dry Dock & Repair Corp., ASBCA Nos. 31894 & 36754, 92-1 BCA ¶ 24,494, 122,244 (where the Board denied appellant’s EAJA application in its entirety because (1) appellant was ineligible due to number of employees and (2) appellant performed only half the work required in its contract but submitted a claim requesting payment for performance of the entire contract).

48. Id.

49. Greenhill v. United States, 96 Fed. Cl. 771, 778 (2011) (citing Air Transp. Ass’n of Can. v. Fed. Aviation Admin., 156 F.3d 1329, 332 U.S. App. D.C. 301 (D.C. Cir. 1998)) (where the Court of Federal Claims determined there was no evidence that plaintiff’s incorrect answer on a government form was intended to deceive the Department of Justice, and therefore the incorrect answer did not constitute special circumstances that would make an EAJA award unjust).

50. Id. (citing Oguachuba v. INS, 706 F.2d 93, 98 (2d Cir. 1983); United States Dep’t of Labor v. Rapid Robert’s, Inc., 130 F.3d 345, 349 (8th Cir. 1997)).

51. Id. (citing United States Dep’t of Labor v. Rapid Robert’s, Inc., 130 F.3d 345, 349 (8th Cir. 1997)).

52. 5 U.S.C. § 504(a)(1).

53. 5 U.S.C. § 504(b)(1)(A).

54. 5 U.S.C. § 504(b)(a)(A).

55. See Arapaho Communications, Inc., ASBCA No. 48235, 98-1 BCA ¶ 29,563, 146,544. In Arapaho Communications, the Board stated, “We have previously held that fees incurred prior to receipt of the contracting officer’s final decision should not be reimbursed in the absence of a specific showing that they were attributable to the adversary adjudication which is the subject of the Act.” Id. (quoting Harrell Patterson Contracting, Inc., ASBCA Nos. 30801, 30802, 30803, 32025, 32208, 33740, 33741, 88-1 BCA ¶ 20,510).

56. 5 U.S.C. § 504(a)(3).

57. See 5 U.S.C. § 504(b)(1)(A).

58. 5 U.S.C. § 504(b)(1)(A) (emphasis added).

59. Optimum Services, Inc., ASBCA Nos. 58755 & 59952, 2017-1 BCA ¶ 36,816, 179,430 (citing Freedom NY, Inc., ASBCA No. 43965, 2009-1 BCA ¶ 34,097, 168,595; ABS Baumaschinenvertrieb, GmbH, ASBCA No. 48207, 2001-2 BCA ¶ 31,549, 155,826–27; Arapaho Communications, Inc., 98-1 BCA ¶ 29,563, at 146,544).

60. ABS Baumaschinenvertrieb, GmbH, 2001-2 BCA ¶ 31,549, 155,826–27.

61. See Optimum Services, Inc., 2017-1 BCA ¶ 36,816, at 179,431.

62. 5 U.S.C. § 504(b)(1)(A).

63. Optimum Services, Inc., 2017-1 BCA ¶ 36,816 (citing Arapaho Communications, Inc., 98-1 BCA ¶ 29,563; Jay-Brant General Contractors, ASBCA No. 51891, 2017-1 BCA ¶ 36,816, 179,430).

64. 5 U.S.C. § 504(b)(1)(A).

65. Id. (“no expert witness shall be compensated at a rate in excess of the highest rate of compensation for expert witnesses paid by the agency involved”). Note that expert fees will not be capped at a lower limit imposed by a Department of Defense regulation if the government exceeds the limits of the regulation when paying its own experts in the case. See Optimum Services, Inc, 2017-1 BCA ¶ 36,816, at 179,430. In Optimum Services, Inc., the government argued that appellant’s expert witness fees should be limited to the GS-15 pay scale limit set forth in the Defense Federal Acquisition Regulation Supplement, which stated that “payment to each expert consultant for personal services under 5 U.S.C. § 3109 shall not exceed the highest rate fixed by the Classification Schedules for grade GS-15.” Id. (quoting 5 C.F.R. 304.105(a) (2018)). The Board rejected the government’s argument because the government “admitted that it paid its own experts in excess for the DFARS cap” and found that the appellant was “entitled to be compensated up to the same rate paid by the government.” Id.

66. Optimum Services, Inc., 2017-1 BCA ¶ 36,816, at 179,431.

67. Id.

68. Id. (“The Board has long held that fees of lay witnesses are generally not reimbursable.”) (citing Walsky Constr. Co., ASBCA No. 41541, 95-2 BCA ¶ 27,889, 139,137). See also K&K Indus., Inc., ASBCA No. 61189, 2019-1 BCA ¶ 37,353, 181,629.

69. Optimum Services, Inc., 2017-1 BCA ¶ 36,816.

70. Id.

71. Equal Access to Justice Act, 5 U.S.C. § 504(a)(2) (2018).

72. Id.

73. Id.

74. ASBCA Rules: Addendum I, supra note 14, para. (j)(1).

75. Id.

76. Id. para. (k).

77. See id. para. (l)(1) (noting that “further proceedings will be held only when necessary for full and fair resolution of the issues arising from the application”).

78. See generally id.

79. Contract Disputes Act, 41 U.S.C. §§ 7101–7109 (2018).

80. Lieutenant Colonel (Retired) Timothy A. Furin, An Overview of the Judgment Fund and How Its Availability can Impact Claim Settlements, Army Law., Issue 3 2019, at 31, 32.

81. Id. (citing 41 U.S.C. § 7109(a)).

82. 41 U.S.C. § 7109(a)–(b).

83. If an appellant raises the issue of Prompt Payment Act (PPA) interest in an appeal, it is important to remember that the rules governing Contracts Dispute Act (CDA) interest owed during a contract dispute are different than those for Prompt Payment Act (PPA) interest during a dispute. Prompt Payment Act, 31 U.S.C. §§ 3901–3907 (2018). Under the PPA, the government generally must pay interest to contractors on “payments [that are] otherwise due and owed [but] are paid late.” Innovative Refrigeration Concepts, ASBCA Nos. 48625, 49475, 2001-1 BCA ¶ 31,250, 154,336 (citing 31 U.S.C. §§ 3901–3907). However, unlike interest under the CDA, interest under the PPA does not accrue when the delay in payment is due to a bona fide dispute between the government and contractor “over the amount of the payment or other issues concerning compliance with the terms of a contract.” 5 C.F.R. 1315.10(c)(1); see also FAR 32.907(a). This means that PPA interest generally will not have as significant an impact on an appeal’s overall financial risk as CDA interest will. Id.

84. 41 U.S.C. § 7109(a)–(b).

85. 41 U.S.C. § 7109(b).

86. Contract & Fiscal Law Dep’t, The Judge Advocate Gen.’s Legal Ctr. & Sch., U.S. Army, Contract Attorneys Deskbook ch. 20, pt. V, para. B.4.b (2019).

87. Id. ch. 20, n.10 (citing Interest Rates, U.S. Dep’t of the Treasury, https://www.fiscal.treasury.gov/prompt-payment/rates.html (last visited Feb. 15, 2020)).

88. See, e.g., CDA Interest Calculator, Crowell Moring, https://www.crowell.com/Practices/Government-Contracts/Claims/CDA-Interest-Calculator (last visited June 4, 2020) [hereinafter CDA Interest Calculator].

89. For example, while working as a trial attorney at the Army’s Contract and Fiscal Law Division (KFLD), one of the author’s assigned appeals involved at least one claim filed with a contracting officer in the summer of 2014, a hearing at the Armed Services Board of Contract Appeals (ASBCA) in 2017, and a post-hearing brief filed that same year. The ASBCA issued its decision for the case on 12 May 2020, approximately three years after the hearing.

90. CDA Interest Calculator, supra note 88 (input 250,000 as claim amount; 19JAN15 as the start date; 20JAN20 as the end date).

91. Id. (input 2,000,000 as claim amount; 19JAN15 as the start date; 20JAN20 as the end date).

92. See, e.g., Appeal of Kellog Brown & Root Srvcs. Inc., ASBCA No. 58175, 2018-1 BCA ¶ 37,006, 180,219 (where appellant asserted a claim of $11,483,487 against the government); Appeal of Kellogg Brown & Root Srvcs. Inc., ASBCA No. 58081, 2017-1 BCA 36,595, 178,234 (where appellant asserted a claim of $14,707,191 against the government).

93. CDA Interest Calculator, supra note 88 (input 250,000 as the claim amount; 19JAN15 as the start date; 20JAN20 as the end date).

94. Based on the experience of this author while working as a trial attorney in government contract litigation at KFLD between 2015 and 2017.

95. Based on the experience of this author while working as a trial attorney in government contract litigation at KFLD between 2015 and 2017.