TITLE: B-296783.4; B-296783.5, Department of the Army; ITT Federal Services International Corporation--Costs, April 26, 2006
BNUMBER: B-296783.4; B-296783.5
DATE: April 26, 2006
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B-296783.4; B-296783.5, Department of the Army; ITT Federal Services International Corporation--Costs, April 26, 2006
Decision
Matter of: Department of the Army; ITT Federal Services International
Corporation--Costs
File: B-296783.4; B-296783.5
Date: April 26, 2006
Kevin P. Connelly, Esq., Seyfarth Shaw, for the protester.
Nancy J. Williams, Esq., U.S. Army Corps of Engineers, for the agency.
Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Where successful protester's claim for attorneys' fees includes request
for reimbursement at hourly rate above generally applicable $150 statutory
limit based on increase in cost of living, higher rate paid should be
based on the consumer price index for all items rather than the index for
legal services.
2. Reimbursement of protest costs associated with use of consultant is
limited to highest rate of pay for a federal employee (GS-15, step 10),
even where consultant billed at higher rate.
DECISION
The Department of the Army and ITT Federal Services International
Corporation request our recommendation concerning ITT's claim for protest
costs, filed in connection with our decision sustaining ITT's protest
against the award of a contract to Kellogg, Brown & Root Services, Inc.
for logistics support services. ITT Fed. Servs. Int'l Corp., B-296783,
B-296783.3, Oct. 11, 2005, 2006 CPD para. __.[1] In addition to corrective
action, we recommended that the Army reimburse ITT its costs of filing and
pursuing the protest, including reasonable attorneys' fees. The Army
objects to the amounts claimed for ITT's attorneys and consultant.
ATTORNEYS' FEES
Under the Competition in Contracting Act of 1984 (CICA), as amended, 31
U.S.C. sect. 3554(c)(2)(B) (2000), successful protesters that are not
small businesses are limited in their recovery of attorneys' fees to $150
per hour, except to the extent that the agency determines, based on a
recommendation from our Office on a case-by-case basis, that "an increase
in the cost of living" or other special factors justify a higher hourly
rate.
In its protest cost claim filed with the agency, ITT requests that it be
reimbursed its attorneys' fees at a rate of $238 per hour, to account for
an increase in the cost of living. ITT calculated this upward adjustment
using the Department of Labor's (DOL) Consumer Price Index for All Urban
Consumers, U.S. City Average for Legal Services (CPI-L). The agency
concedes that ITT is entitled to some cost of living adjustment, but
argues that the increase should be calculated based on DOL's Consumer
Price Index for All Urban Consumers, U.S. City Average for All Items
(CPI-U); according to the agency's calculations, this would result in a
rate of $192.12 per hour.
In Sodexho Mgmt., Inc.--Costs, B-289605.3, Aug. 6, 2003, 2003 CPD para.
136 at 37-43, we discussed for the first time the section 3554 ceiling on
attorneys' fees and the cost of living adjustment. We found that the
statute contemplates an increase in the specified $150 per hour rate in
order to offset any decrease in the value of the rate due to inflation,
Sodexho Mgmt., Inc.--Costs, supra, at 41, and that the appropriate cost of
living increase should be determined with reference to DOL's CPI. While we
did not require application of a particular CPI--stating "[w]e decline to
impose a requirement that a claimant do more than request an adjustment
and present a basis upon which the adjustment should be calculated,"
id.--we applied the CPI-U in determining the appropriate adjustment. In
doing so, we noted that this approach was consistent with that used by the
courts in calculating cost of living increases in attorneys' fees claimed
under an identical reimbursement provision in the Equal Access to Justice
Act (EAJA), 28 U.S.C. sect. 2412(d)(2)(A). Sodexho Mgmt., Inc.--Costs,
supra, at 43 n.33.
The Army cites Sodexho in asserting that the CPI-U, rather than the CPI-L,
should be used here, because it is a measure of the increase in the cost
of living overall, as opposed to the cost of obtaining legal
representation. ITT, on the other hand, maintains that, because Sodexho
does not specifically require that the CPI-U be used, and because we
accepted use of a different measure in another case (in Department of
State--Costs, B-295352.5, Aug 18, 2005, 2005 CPD para. 145, we accepted
use of a regional--as opposed to a national--CPI rate for all items), we
should accept use of the CPI-L here, since it provides a more accurate
measurement of the increase in the actual costs being reimbursed.
We agree with the agency that the CPI-U, rather than the CPI-L, should be
applied here, since it is consistent with the plain language of the
statute. As noted above, the statute provides for upward adjustment of the
rate of compensation for attorneys to account for "an increase in the cost
of living," as opposed to an increase in the cost of obtaining legal
representation. As noted above, this conclusion is consistent with the
practice and rationale of courts applying the identical cost of living
adjustment provision in EAJA; they have consistently used the CPI-U in
calculating upward adjustments of claimed attorneys' fees. See, e.g.,
Dewalt v. Sullivan, 963 F.2d 27, 29-30 (3^rd Cir. 1992); Sullivan v.
Sullivan, 958 F.2d 574, 576-78 (4^th Cir. 1992).
ITT's suggestion that our permitting use of a measure other than the CPI-U
in Department of State--Costs is a basis for permitting use of the CPI-L
here is without merit. Our decision in Department of State--Costs did not
concern the question presented here--whether the CPI-U is the appropriate
measure for cost of living adjustments versus the CPI-L (although we point
out that in both cases we applied a CPI that measured increases in the
cost of living, as opposed to the cost of obtaining legal representation).
As discussed above, we find that the CPI-U is the appropriate measure
because it is consistent with the language of the statute.
CONSULTANT FEES
In its claim filed with the agency, ITT also has requested reimbursement
of consultant fees at the rate charged by the consultant--$360 per hour (a
total of $81,744.15). The agency maintains that this amount is not
warranted--that applicable statutes and regulations call for reimbursement
of no more than $446.64 per day.
CICA provides as follows:
No party (other than a small business concern) . . . may be paid,
pursuant to a recommendation made under the authority of paragraph
(1)--(A) costs for consultant and expert witness fees that exceed the
highest rate of compensation for expert witnesses paid by the Federal
Government.
31 U.S.C. sect. 3554(c)(2)(A).
ITT asserts that the proper measure of the "highest rate of compensation
for expert witnesses paid by the Federal Government" is the rate that has
been paid by any federal agency for any expert witness or consultant in
any forum at any time. In support of its claimed amount, ITT has tendered
evidence showing that the federal government has paid more than $360 per
hour for expert witnesses in other litigation in various federal forums.
The agency, on the other hand, asserts that Federal Acquisition Regulation
(FAR) sect. 33.104 is dispositive of the question. That section states
that agencies shall not pay consultant and expert witness fees "that
exceed the highest rate of compensation for expert witnesses paid by the
Government pursuant to 5 U.S.C. 3109 and Expert and Consultant
Appointments, 60 FR 45649, September 1, 1995 (5 CFR 304.105)."
FAR sect. 33.104(h)(3)(i). The referenced provisions--5 U.S.C. sect. 3109
and 5 C.F.R. sect. 304.105--list federal pay rates, the highest of which
is general schedule (GS) grade 15, step 10, which the agency calculates is
equal to no more than $446.64 per day. The agency maintains that ITT's
consultant fees therefore should be reimbursed at a daily rate no greater
than this amount. ITT asserts that there is no basis in section 3554 for
this fee limitation.
We have not previously addressed the consultant and expert witness fee
provision in section 3554. Based on our review, we agree with the agency
that the appropriate rate of reimbursement for ITT's consultant is $446.64
per day, consistent with FAR sect. 33.104.
While ITT maintains that the fee limitation is inconsistent with section
3554, there is nothing in the statute itself that explains the "highest
rate of compensation" language, and the minimal legislative history
relating to section 3554 relates to attorneys' fees rather than to
consultant and expert witness fees; indeed, the legislative history does
little more than restate, without elaboration, the terms of the statute
itself as it relates to consultant and expert witness fees. See H.R. Conf.
Rep. No. 103-712 at 191-192 (1994), reprinted in 1994 U.S.C.C.A.N. 2607,
2621-22. On the other hand, at the time the FAR guidance was issued, our
Office specifically concluded that it was consistent with the statute,
stating as follows:
Concerning the consultant and expert witness fee limitation, FASA [the
Federal Acquisition Streamlining Act] limits the payment of these fees
to `the highest rate of compensation . . . paid by the Federal
Government.' While there is some difference of opinion among the
commentators [submitting comments in response to our then-proposed Bid
Protest Regulations] on whether Congress intended to cap the fees at the
highest rate fixed by the Classification Act Schedules, see 5 U.S.C.
3109, we believe the proposed FAR implementation, which limits
consultant and expert witness fees to the highest rate fixed by 5 U.S.C.
3109, is appropriate and consistent with the statutory language. We are
unaware of any legislative history which suggests that this
implementation is contrary to congressional intent.
60 Fed. Reg. 40739 (Aug. 10, 1995).
We also have looked to court rulings for guidance in this matter. Although
the courts have not addressed the matter of consultant fee reimbursement
under section 3554, we again have reviewed the courts' prevailing practice
in applying the similar provisions in EAJA (the language of section 3554
is identical to the expert witness provision in EAJA). That review shows
that the courts routinely have based reimbursement for a successful
litigant's expert witnesses not on the highest rate paid by the government
in any litigation, but on the rate paid by the government for its own
expert witnesses in the same litigation. See United States v. 104 Acres
More or Less, Situated in Keeler Township, VanBuren Co., MI; and
Dukesherer Farms, Inc, No. K83-468, 1988 WL 29772, at 5 (W.D. Mich. Nov.
30, 1988) (defendant awarded expert witness fees at the rate paid by the
government in the action); see also United States v. Adkinson, et al., 256
F. Supp. 1297, 1322 n.23 (N.D. Fla. 2003) (awarded expert witness fees did
not exceed the highest rate of compensation for expert witnesses paid by
the government); United States v. Aisenberg, 247 F. Supp. 2d 1272, 1295-96
(M.D. Fla. 2003) (expert witness fees claimed were reimbursed where
expert's rate was lower than that of government's expert witness in the
litigation). This approach could lead to a result harsher than the FAR's
approach. [2] In view of our previously expressed view that the FAR
guidance is consistent with the statute, and considering that the courts
have not adopted ITT's proposed approach in EAJA cases, we conclude that
the FAR guidance applies.
We recommend that the Army limit reimbursement of ITT's consultant costs
to the rate of compensation for a GS-15, step 10 federal employee.[3]
Anthony H. Gamboa
General Counsel
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[1] The decision was subject to a protective order and no redacted version
has been released to date pending the outcome of the agency's corrective
action taken in response to our recommendation for corrective action.
[2] At least one court has suggested that, in cases where a prevailing
party is seeking expert witness fees and the government has not presented
an expert witness--and the government thus has paid nothing for an expert
witness during the litigation--EAJA may require that the prevailing party
be reimbursed nothing for its expert witness. Olympic Marine Servs., Inc.
v. U.S., 792 F.Supp. 461, 471 (E.D. Va. 1992); cf. Celeste v. Sullivan 734
F.Supp. 1009, 1011-12 (in the absence of expert witnesses for the
government, court applied statutorily-mandated per diem rate for federal
witnesses).
[3] The parties have not indicated during our consideration of this cost
claim that there is disagreement regarding the reasonableness of the
number of hours billed by the consultant. Thus, we offer no opinion here
regarding that question and provide only guidance regarding the rate of
compensation.