Application for attorneys’ fees under the Equal Access to Justice Act is granted in part. A claimant that had prevailed on some of its claims requested fees under the EAJA. The agency objected to a fee award, arguing that its litigation position had been justified. The board found the agency’s litigation position—especially in light of it behavior during contract performance—was not justified. The agency increased costs and inhibited an efficient resolution of disputes during performance. The unreasonableness of the agency’s position was exacerbated by the conduct of the contracting officer who, rather than working with the contractor, sent stern, almost abusive, emails berating the contractor.
The Department of Veteran Affairs awarded Vet4U, LLC a contract to turn a crawl space under a VA hospital into a fully functional hospital floor. In constructing the floor, Vet4U incurred almost $300,000 in additional costs beyond the contract award amount. Vet4U filed claims with the VA to recover those costs. The VA denied those claims, and Vet4U appealed to the CBCA. The board partially granted the appeal. Thereafter, Vet4U requested its attorneys’ fees under the Equal Access to Justice Act.
The board found that Vet4U met the prima facie requirements of the EAJA: it was the prevailed in its appeal, it met the Act’s corporate size and net worth requirements, it timely applied for fees, and it alleged the VA’s position was not substantially justified.
When a party requesting fees establishes that it is the prevailing party, the burden shifts to the government to show that its litigation position was substantially justified. The VA contended that its position was justified because Vet4U actually did not prevail on the majority of its claims.
The board noted that when assessing whether the government’s position was justified, it looks at both the agency’s legal stance during litigation as well the its conduct during performance of the contract.
Here, while Vet4U did not prevail on all its claims, the board found that during performance, the VA’s conduct was not justified. The agency increased costs and prevented the parties from efficiently resolving disputes. The VA forced Vet4U to do work that was outside the scope of the contract, failed to reimburse Vet4U for emergency repairs, ignored requests for assistance in securing cooperation from another contractor, and left Vet4U in limbo with respect to a change work order. The VA failed to act when circumstances required it. Instead of proposing solutions, the contracting officer sent Vet4U stern emails that bordered on being verbally abusive.
The board did find that some of the Vet4U’s fess were incurred before the contracting officer’s final decision and thus were not recoverable. The board also determined that Vet4U was only entitled to fees at the statutory rate of $125 per hour, not the market rate.
Vet4U is represented by Michael T. Stanczyk of Lynn D’Elia Temes & Stanczyk LLC. The Department of Veterans Affairs is represented by Harold W. Askins III.
