_________________________________________ GRANTED IN PART: December 30, 1992 _________________________________________ GSBCA 11980-C(10614), 11981-C(10996) MARTY'S MAID AND JANITORIAL SERVICE, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Thomas R. Buresh of Moyer & Bergman, Cedar Rapids, IA, counsel for Appellant. Samuel E. Skare and Adele Ross Vine, Office of Regional Counsel, General Services Administration, Kansas City, MO, counsel for Respondent. Before Board Judges DEVINE, PARKER, and HYATT. Per Curiam. Pursuant to Rule 18, a hearing examiner was designated to conduct proceedings in this appeal. The Board adopts the following opinion recommended by the hearing examiner. Accordingly, the application for costs is granted in part and the applicant is awarded $10,700.38, without interest. Opinion Recommended by Hearing Examiner Quigley On July 22, 1992, the Board granted in part two appeals filed by Marty's Maid and Janitorial Service (Marty's Maid or applicant), concerning the termination for default by the General Services Administration (GSA or the Government) of its contract number GS-06P-89-GXC-0006 for the performance of janitorial and related services at the United States Post Office and Courthouse in Dubuque, Iowa. Marty's Maid and Janitorial Service v. General Services Administration, GSBCA 10614, et al. (July 22, 1992). On August 20, 1992, Marty's Maid filed its application for fees and other expenses under the Equal Access to Justice Act (EAJA), codified at 5 U.S.C. 504 (1988). Marty's Maid seeks reimbursement for fees and expenses incurred from April 1990 until the filing of its EAJA application in August 1992. In September 1992, GSA filed a motion in opposition to Marty's Maid's EAJA application. Marty's Maid then filed a reply brief to GSA's motion, for which Marty's Maid does not request reimbursement for legal fees incurred. We find that Marty's Maid qualifies as a prevailing party, that the position of the Government was not substantially justified in one appeal and was not substantially justified in part in the other appeal, that reimbursement for attorney fees is limited to $75 per hour, and that some of the attorney fees and expenses incurred by Marty's Maid are not reasonable. As a result, we conclude that Marty's Maid is entitled to be reimbursed for only a portion of the fees and expenses which it incurred. Discussion This case involved a one year contract for cleaning services at a payment rate of $4,000 per month. When the contract was terminated on January 30, 1990, it had only three months left to run. Unfortunately, neither GSA's administration of this contract nor Marty's Maid's performance of the contract was stellar. Their dispute was a relatively small one, which did not involve exceptionally complex facts or theories and which begged to be settled. Instead, it became the subject of substantial litigation, in which counsel for Marty's Maid presented three days of testimony, deposed fourteen witnesses, and submitted extensive pleadings and exhibits. The costs in this case seem to have spun out of control unnecessarily, and the expectation of recovery of legal fees and expenses through EAJA appears to have been interpreted as a license to overlitigate. The Government does not dispute that Marty's Maid meets the financial criteria for EAJA eligibility and it does not make a serious argument that any special circumstances exist which would make an award unjust. Therefore, we turn to the issues of whether Marty's Maid is a prevailing party, whether the Government's position was substantially justified, what rate is appropriate for reimbursement of attorney fees, and the extent to which the legal fees and expenses incurred by Marty's Maid are reasonable. Prevailing Party In its termination claim submitted to the contracting officer on August 3, 1990, Marty's Maid demanded $49,034.95 in damages. During the hearing on the underlying claim in October, 1991, it revised its claim to $46,857.92. In our decision of July 22, 1992, GSA was ordered to convert the termination for default to a termination for the convenience of the Government. In addition, Marty's Maid was awarded $450 in termination costs, $4,427.93 for deductions improperly taken for poor performance, $2,419.34 for the cost of extra work necessary to strip and wax the floors, $774.18 for extra general cleaning services provided, and $2,114.06 for the cost of additional supplies. This came to a total award of $10,185.51. While Marty's Maid did not receive all of the damages it requested, it was successful on the issue of whether GSA properly terminated the contract for default and it also succeeded in part on several of its claims for an equitable adjustment based on constructive changes to the contract and improper contract payment deductions. We therefore find that Marty's Maid is a prevailing party. Substantial Justification Once an applicant has demonstrated that it is a prevailing party, fees and expenses shall be awarded "unless the adjudicative officer of the agency finds that the position of the agency was substantially justified." 5 U.S.C. 504(a)(1)(1988). The Government is "substantially justified" if it is clearly reasonable in asserting its position, at the agency level and during the adversary adjudication, in view of the law and the facts. Gilroy-Sims & Associates, GSBCA 11501-C(10504) (June 18, 1992) (citations omitted). There we stated that in this determination, "we are to consider the complete administrative record, not just the litigation tactic of the agency." Id., slip op. at 3. In our decision of July 22, we granted Marty's Maid's first appeal (GSBCA 10614), which alleged that the termination for default should be converted to a termination for convenience. We held that although Marty's Maid was "in over its head" in taking on the GSA contract and although the timeframes in which it intended to perform the cleaning required by the contract were unrealistic, Marty's Maid "never had a fair chance to try to perform." Opinion at 29. We then gave several reasons why the termination for default was "unfair in the circumstances of this case." Id. Further, we found that the contracting officer knew that a termination for convenience might be more appropriate than a termination for default. Id. at 24. Given these facts, we cannot find the position of the Government on the termination issue to have been substantially justified. While we have no doubt that the termination for default itself was improper, we found the claim for termination costs to be "another matter." Id. Out of the $8,954 requested, Marty's Maid was awarded only $450 on its termination claim. Marty's Maid recovered all of the $300 it incurred in actual termination costs, but only $150 of the $8,654 in legal fees it allegedly incurred in preparation of its termination claim letter. We found that these legal fees had been incorrectly charged to the termination claim effort, as they really involved the damages claimed in Marty's Maid's second appeal.[foot #] 1 In effect, we awarded Marty's Maid those costs which were truly related to the termination for default and thus our failure to award Marty's Maid all of its alleged "termination costs" does not affect our finding that the Government's position in the first appeal lacks substantial justification. The second appeal (GSBCA 10966) involved claims for improper deductions and the cost of additional work performed beyond that required by the contract. In our opinion of July 22, we divided this appeal into six separate claims for damages. However, in its request for damages, Marty's Maid used what we considered to be a "hopelessly complex total cost formula," in which it added the original contract price to all of the extra costs which it incurred, and then subtracted any contract payments made by the Government, in order to reach its total damages claim. As a result of Marty's Maid's use of the "total cost formula," we are unable to say exactly how much Marty's Maid claimed in damages on each of the six issues we identified in our decision. Thus, we cannot state with precision what degree of success Marty's Maid obtained on each of these six claims. We can, however, say that while we found Marty's Maid's claims of additional work to be exaggerated and its damage estimates to be overblown, there was some merit to four of the six claims raised by Marty's Maid's second appeal. We found that Marty's Maid was entitled to the full amount it claimed for extra supplies purchased and to full reimbursement for two large deductions to contract payments which were improperly taken in December 1989 and January 1990. We found no evidence, however, that relatively small deductions taken from July through November 1989 were improper. We also found that Marty's Maid had to spend extra time cleaning the building and stripping and waxing the floors because the previous contractor had not properly done so. However, Marty's Maid's estimates of the number of hours spent on each of these tasks were unsubstantiated and we were forced to resort to a jury verdict to determine the proper amount of damages on both of these claims. In addition, two of Marty's Maid's claims were found to be completely without merit. Marty's Maid argued that GSA should not have been allowed to take deductions for vacant space about which Marty's Maid was not informed prior to bidding. We found that as Marty's Maid had never cleaned the space, it had not been damaged by the deductions and that, given Marty's Maid's unrealistic cleaning schedule, it probably could not have cleaned ----------- FOOTNOTE BEGINS --------- [foot #] 1 Marty's Maid is not as a result automatically precluded from recovering under EAJA the legal fees which it claimed to have incurred in preparing the termination claim letter. ----------- FOOTNOTE ENDS ----------- the vacant space in a timely manner anyway. We also found that Marty's Maid was not damaged in any way by having to hire a receptionist to answer its telephone, as Marty's Maid had provided no other reasonable means for GSA to contact it in times of emergency. On these last two issues, it is clear that the position of the Government was substantially justified. However, on the previous four, Marty's Maid recovered at least a part of the damages it claimed. Thus, we can only say that the position of the Government in the second appeal was substantially justified in part. See Jordan & Nobles Construction Co., GSBCA 11277- C(8349), et al., slip op. at 6 (June 29, 1992). Marty's Maid unfortunately tied all of its claims together so as to seek the maximum in damages. As early as July 1990, before Marty's Maid incurred $8,000 in legal fees for the preparation of the "termination claim," GSA offered Marty's Maid a no-cost termination for convenience, and as early as December 1990, offered a settlement of $5,000.[foot #] 2 Counsel for Marty's Maid claims he had authority from his clients to settle for a "termination for convenience plus $13,000 in damages," and states that he told counsel for GSA that he would try to get his clients to accept $10,000." Affidavit of Counsel for Marty's Maid at 24. When GSA said it could not offer more than $5,000, Marty's Maid rejected the offer. Settlement was discussed again in February 1991, but to no avail. Id. at 25. After being ordered to engage in settlement discussions by the presiding judge in this case, Marty's Maid offered in April 1991 to settle for $85,000, including attorney fees. GSA continued to offer $5,000, including attorney fees, and a "possible, but not firm," $10,000 in May 1991. Id. at 26. Marty's Maid lowered its offer to $80,000 later that month. Unfortunately, Marty's Maid at that point already had incurred $52,000 in legal fees.[foot #] 3 ----------- FOOTNOTE BEGINS --------- [foot #] 2 Affidavit of GSA Counsel at 2. According to counsel for Marty's Maid, "GSA offered $5,000 in the beginning and $5,000 before discovery commenced. . . ." Marty's Maid Reply Brief at 13. [foot #] 3 Counsel for Marty's Maid vehemently objects to GSA's bringing to the Board's attention the existence of prior settlement offers. Although he cites no cases, counsel for Marty's Maid claims that "unless [his] firm has misread the law, settlement negotiations are never relevant and are never to be disclosed to the factfinder." Reply Brief at 12. Contrary to the assertions by counsel for Marty's Maid, counsel for GSA is not "guilty of unethical, unprofessional and totally unjustified action," id., in this EAJA case. Counsel for Marty's Maid has ___ simply misread the law. According to Federal Rule of Evidence (continued...) ----------- FOOTNOTE ENDS ----------- Marty's Maid has now incurred more than $102,000 in legal fees (Marty's Maid Application, Exhibit D), on claims that could have been resolved long ago. Instead, Marty's Maid litigated this case to the death, presenting damage estimates which bore little resemblance to the injuries sustained. As noted above, the claims for damages originally totaled over $49,000. These were denied in their entirety by the contracting officer and Marty's Maid received just over $10,000 in damages as a result of the Board's decision. It was reasonable for GSA to dispute such claims for damages. Given GSA's offers to settle, our extensive findings in this case (which took into account each one of Marty's Maid's allegations), and our award of only approximately $10,000 to Marty's Maid, we find GSA's position on the second appeal to have been substantially justified in part. Attorney Fees Hourly Rate In support of its EAJA application, Marty's Maid has submitted copies of statements of account for attorney fees and expenses in the amount of $102,178.09. These statements of account cover the period from April 1990 to August 1992 and are addressed to Marty's Maid's principals. The attorney fees listed in the statements are based on a billable rate for one partner of between $130 per hour to $145 per hour and an associate billable rate of $90 per hour. Marty's Maid claims that it incurred 700 hours of attorney time on the underlying appeals and this application. Recognizing that it cannot recover all of the attorney fees listed in the statements of account, Marty's Maid has submitted a list of attorney fees calculated at the "cost of living rate", for a total of $71,154.09, and at the statutory EAJA reimbursement rate of $75 per hour, for a total of $46,414.50. Marty's Maid Application, Exhibits B and C. In determining the appropriate amount of attorney fees that should be awarded under EAJA, we look first to the Act itself, which specifies that attorney or agent fees shall not be awarded in excess of $75 per hour unless the agency determines by regulation that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys or agents for the proceeding involved, justifies a higher fee. 5 U.S.C. 504(b)(1)(A) (1988). As we noted in American Power, ----------- FOOTNOTE BEGINS --------- [foot #] 3 (...continued) 48, evidence of settlement offers or negotiations is not admissible "to prove liability for or invalidity of the claim or its amount." ----------- FOOTNOTE ENDS ----------- Inc., GSBCA 10558-C(8752), 91-2 BCA 23,766, at 119,046 (1991), no GSA regulation exists which provides that an increase in the cost of living requires an award at a higher fee. Marty's Maid argues that GSA's failure to provide for cost of living adjustments could in itself be considered a special factor. While this argument is quite creative, there is no support for it in either the case law or the legislative history of the statute. In fact, to find that the $75 per hour cap can be exceeded simply because an agency has no regulation on this subject would render meaningless that part of the statute allowing the cap to be exceeded based solely on agency regulation. The only example of a special factor given in the Act is "the limited availability of qualified attorneys." 5 U.S.C. 504(b)(1)(A) (1988). The Supreme Court has interpreted this exception as referring to "attorneys having some distinctive knowledge or specialized skill needful for the litigation in question. . . ." Pierce v. Underwood, 487 U.S. 552, 572 (1988). While the law firm retained by Marty's Maid may, as counsel states, be one of only two firms in Iowa with a "regular practice" in Government contracts[foot #] 4, experience in this area does not constitute the "distinctive knowledge or specialized skill" necessary to exceed the $75 per hour cap on attorneys fees. We agree with the reasoning in Esprit Corp., 15 Cl. Ct. 491, 494 (1988), where the court held that "[t]o rule otherwise would serve to emasculate the effectiveness of the $75 cap as each practice group could argue that it possesses a 'specialized skill.'" We stated in American Power that we would find a lawyer's experience to be a special factor only in those "highly complex cases where such experience is essential to the ability to prosecute the case." American Power, 91-2 BCA at 119,048. The case at hand did not involve very difficult Government contracts theories and did not require exceptional skill or experience in the field to litigate. In fact, we would hope that other lawyers, even without the Government contracts experience of Marty's Maid's attorney, could have litigated the case successfully and at less cost to the client. Thus, we find Marty's Maid entitled to reimbursement of attorney fees at a rate of $75 per hour. Specificity of Bills Submitted For an award of attorney fees, the EAJA requires an itemized statement of "the actual time expended and the rate at which fees ----------- FOOTNOTE BEGINS --------- [foot #] 4 Counsel for Marty's Maid acknowledged, however, that he was obliged to send an associate to another city to do Government contracts work because his office does not have a "complete set of Government contracts reference works," such as the Boards of Contract Appeals' decisions. Affidavit of Marty's Maid's Attorney at 17-18. ----------- FOOTNOTE ENDS ----------- and other expenses were computed." 5 U.S.C. 504(a)(2) (1988). The United States Court of Appeals for the Federal Circuit, our appellate authority, expects applicants to submit the exact time spent on a case, by whom, their status, and the usual billing rates, as well as a breakdown of expenses. Naporano Iron and Metal Co. v. United States, 825 F.2d 403, 404 (Fed. Cir. 1987) (only by knowing the specific task performed can the reasonableness of the number of hours required for any individual item be judged). This Board has noted that EAJA claims for attorney fees must be based on contemporaneous records. Thus, in Spectrum Leasing Corporation v. General Services Administration, GSBCA 10902-C(7347), et al. (July 27, 1992), we denied some attorney fees because "[i]f a portion of an EAJA application fails to meet these critical requirements, it simply does not qualify for any relief under the statute." Marty's Maid's bills for attorney fees which are dated before March 1991, other than those submitted with the claim for termination costs, do not specify the amount of time spent by each attorney on each day that legal work was done on the appeals. Marty's Maid Application, Exhibit C. Counsel for Marty's Maid avers that this was his firm's typical billing format and that he did not begin to keep the specific billing records required for an EAJA claim until he realized in February 1991, that the case would not settle. Affidavit of Counsel for Marty's Maid at 3. Because of this lack of specificity, it is difficult to determine whether any individual item billed is reasonable. However, a detailed description of the type of work done, and a summary of the total hours spent on the appeals each month and the total amount billed each month, has been submitted.[foot #] 5 While this is far from ideal proof of attorney fees incurred, we recognize that Marty's Maid has made some effort to allow the Board to determine which fees here can be considered reasonable and necessary. In light of this, and because disallowing any reimbursement for attorney fees from September 1990 through February 1991 would be a very drastic measure, we do not exclude these bills from eligibility for reimbursement. Reasonableness of Attorney Fees Incurred The Supreme Court has made clear that no award should be made for hours that are "not reasonably expended." Hensley v. Eckerhart, 461 U.S. 424, 434 (1983) (citations omitted). Thus, ----------- FOOTNOTE BEGINS --------- [foot #] 5 We note that Marty's Maid's attorney was somehow able to provide the number of hours spent on each individual item billed from April to August 1990. This attorney time comprises the bulk of the alleged costs of preparing the termination claim and this information was submitted at the hearing. We do not understand why it was possible to do this for the months before the termination claim was filed but not for September 1990 to February 1991 for the EAJA application. ----------- FOOTNOTE ENDS ----------- before we can decide what fees Marty's Maid may recover under the EAJA, we must first determine if there are any "excessive, redundant, or unnecessary" fees which must be excluded. Atlas Construction Co. v. General Services Administration, GSBCA 11088- C(8653), et al., 92-2 BCA 24,944 (1992)(citations omitted). Marty's Maid's attorney claims to have reduced the total number of hours billed to Marty's Maid for legal work from 732.78 hours to 700.84 hours, Marty's Maid Application, Exhibit C.[foot #] 6, thus excluding all hours not reasonably billed to the client. Even after this rather insignificant reduction, we are still stunned at the number of hours counsel for Marty's Maid claims was necessary to litigate this case effectively. In general, we find the amount of time expended by counsel for Marty's Maid on client consultation, document review, the taking of depositions, and especially the preparation of pleadings, was excessive. We have previously denied reimbursement for attorney fees when we found that the hours billed were not reasonable. Kentucky Building Maintenance, GSBCA 10973-C(7803), 91-3 BCA 24,158 (1991); Kleen Master, Inc., GSBCA 10075-C(7657), 90-1 BCA 22,466 (1989). GSA has made several specific objections to individual matters billed. We agree with some of those and add some of our own. We deduct the following amounts from Marty's Maid's request for reimbursement for attorney fees: 1. On April 20, 1990, at least half of the time billed should have been allocated to the effort to secure a certificate of competency. Thus, we deduct 5 hours out of the 9.75 hours billed, but only after billable time for this date was already reduced by nine hours by counsel for Marty's Maid. 2. From April through August 1990, Marty's Maid claimed to have incurred 104 hours of attorney time in preparing the termination claim. Application of Marty's Maid, Exhibit B, at trial exhibit F-1. Counsel for Marty's Maid now claims that only 65.95 hours were spent preparing the claim. Affidavit of Counsel ----------- FOOTNOTE BEGINS --------- [foot #] 6 Counsel for Marty's Maid used rather elaborate calculations to attempt to show that the hours which he deducted from the bill really amounted to more than the thirty-two hours ____ shown on Exhibit C. In fact, it is difficult enough to verify even the reduction of 32 hours shown on Exhibit C. For example, counsel for Marty's Maid states that twelve hours of attorney time were deducted from the April 1990 bill as a result of "joint conference time," yet he specifically lists only 11.5 hours that were not billed. Affidavit of Marty's Maid's Attorney at 4-5. In addition, rather than simply deducting the "twelve" hours from one attorney's time, he appears to deduct ten hours from both attorneys' time, after averaging out the difference in rates for both attorneys. A more straightforward approach would have been appreciated. ----------- FOOTNOTE ENDS ----------- for Marty's Maid at 12-13. Counsel admits that the amount of effort might seem to be "large," but claims that the work involved was "not wasted because it facilitated preparation for the appeal hearing." Id. at 13. It is possible that it facilitated preparation for Marty's Maid's counsel. However, the enormous amount of time spent by counsel in preparing spreadsheets, "grandview outline programs," computer exhibits, overlays and charts, etcetera, to prove such things as the deductions from contract payments made to Marty's Maid, the inspections of work done by prior and subsequent contractors, the alleged failures to perform, and labor costs and extra hours worked, among other things, was to a large extent wasted. Such extensive documentation was simply not necessary in a case of this size. Neither was the use of the "total cost formula," which was based on such documentation and calculations, and which we found to be complex and exaggerated. Even if we accept counsel's representation that reimbursement is only being requested for 65 hours of attorney time, we still must deduct 25 hours of this time as unreasonably billed. 3. In January and February of 1991, counsel for Marty's Maid began preparing for a string of depositions. During the first eleven days of March, fourteen depositions were conducted in three different cities. As explained below, not all of these depositions were necessary, and the number of hours spent reviewing and organizing documents in preparation for those that were necessary was extreme. Because counsel for Marty's Maids did not retain the attorney time sheets in this case, it is impossible to tell from the billing statements exactly how much time was spent in preparation for taking depositions. However, most of the extensive review of documents and preparation of various types of outlines seems to relate to the depositions, especially since the hearing was not scheduled until April. Even if all of this attorney time could be said to be more properly considered trial preparation, it was still excessive and repetitive. We estimate that 40 hours is the appropriate amount to subtract from the approximately 110 hours (or approximately $18,00) billed in January and February 1991. 4. GSA objects to a six-hour conference call with the principals of Marty's Maid on March 2, 1991. As counsel for Marty's Maid does not explain why such a long call was necessary, we deduct 6 hours, especially in light of all of counsel's previous telephone calls to and meetings with the client. 5. As we noted, counsel for Marty's Maid took fourteen depositions at the beginning of March. Because a deposition is a means of discovery which may reasonably lead to the admission of evidence, we generally allow reimbursement for the taking of a deposition. In this particular case, however, all fourteen depositions could not reasonably have been expected to lead to the admission of evidence. While we allow reimbursement for most of these depositions, (including all those of GSA employees), we agree with GSA that the depositions of postal employees were unnecessary. It was not unreasonable to depose the postmaster or his deputy, but deposing other postal employees was excessive. These employees could testify only to peripheral matters and could add little not already in the record. Deposing them was simply not warranted in the circumstances of this case.[foot #] 7 Counsel for Marty's Maid is also incorrect when he claims that he had to depose all the people he did because hearsay would not be admissible at the hearing. In fact, under the Board's rules of procedure, hearsay is indeed generally admissible. Rule 22(a). Because we are not convinced that all of the preparation for the depositions was necessary or even that all the depositions themselves were necessary, we deduct 15 hours from this effort. 6. From March through December 1991, counsel for Marty's Maid billed 414 hours. During March, counsel began spending many hours on the pre-trial brief which, although 144 pages long, was not very helpful in terms of hard facts. It was quite repetitive, and contained numerous grammatical and spelling errors and various unsubstantiated allegations. The brief repeatedly either failed to cite to a particular document or incorrectly cited to a document. It went into unnecessary detail in discussing the prior and subsequent contractors. The extensive research included additional work on the common law requirements for terminating a contract for default, after counsel had previously billed over $8,000 to prepare the termination claim. The exhaustive review of the various drafts of the brief would lead one to expect a well-written and helpful brief. Unfortunately, this is not what was produced. As a result, we deduct 20 hours from the time billed to prepare this document. 7. Likewise, counsel's efforts to prepare for the hearing were extreme. In a case involving a contract worth $48,000, counsel for Marty's Maid produced 125 exhibits in addition to the thirty produced by GSA. The amount of time that may be reimbursed for preparing exhibits and witnesses is reduced by 15 hours. 8. GSA specifically objects to time spent in July 1991 on formulating alternative damages and the Marty's Maid's partners' "would-have-been" profits. As this approach was rejected by the Board and these estimates were found to be "wildly exaggerated," 10 hours of the over 15 hours spent on July 21 and 23 is ----------- FOOTNOTE BEGINS --------- [foot #] 7 The Board's finding that postal employees had harassed Marty's Maid's principals and employees was based on the extensive documentation entered into the record both before and during the hearing. The Board referred to only four depositions in its extensive findings (three depositions of GSA employees and one of the Postmaster), and counsel for Marty's Maid made very few references to any of the depositions, all admitted in their entirety, in his pleadings. ----------- FOOTNOTE ENDS ----------- deducted. 9. Regarding the more than 30 hours spent on preparing the post-trial brief, we deduct 10 hours, as this brief was unnecessarily long and repetitive, at seventy single-spaced pages, especially in light of the submission of the pre-trial brief. 10. During July and August 1992, counsel for Marty's Maid spent over 40 hours preparing the EAJA application. As GSA notes, we have previously held that 27 hours spent on an EAJA application in a relatively simple case is too much. Kleen Master, Inc., 90-1 BCA 22,466, at 112,790. Counsel for Marty's Maid also goes into great detail in the EAJA application as to why Marty's Maid should be reimbursed for its "costs" as well as its "expenses." Although this issue was not raised by GSA, Marty's Maid's attorney was concerned that 5 U.S.C. 504 does not differentiate between "costs" and "expenses," as does 5 U.S.C. 2412, which also addresses EAJA. However, he did not need to address this issue since 2412 does not apply to boards of contract appeals such as this one. Time spent arguing this point is deducted from his application, as is the time spent in excessive research and drafting. We estimate that amount of time to be 15 hours. We thus deduct as unreasonable 161 hours of the 700 hours of attorney time incurred by Marty's Maid. This still leaves a total of 539 hours spent litigating the two appeals (and also filing the EAJA application). The Claims Court has found 200 hours to be a reasonable amount of time to prepare for trial in a case involving a claim for $1.2 million, "particularly where opposing counsel has been recalcitrant and significant time was wasted on procedural wrangling." St. Paul Fire and Marine Insurance Co. v. United States, 4 Cl. Ct. 762 (1984). Similarly, we found 849 hours spent on litigation before the Board to be reasonable where "respondent used scorched earth litigation tactics." Gilroy-Sims & Associates v. General Services Administration, GSBCA 11778-C(8720), et al. (September 25, 1992). The situation here could not have been more different from that in St. Paul or Gilroy-Sims. In the case at hand, rather than forcing Marty's Maid into unnecessary or prolonged litigation, GSA's effort since these appeals were filed could only be described as an understandable disinclination to litigate aggressively what should have been a small case. GSA took no depositions, called no witnesses at the hearing, and filed briefs that were only a fraction of the length of those filed by Marty's Maid.[foot #] 8 The decision to incur 700 hours of ----------- FOOTNOTE BEGINS --------- [foot #] 8 While GSA failed to produce quite a few documents, causing Marty's Maid to seek to procure them elsewhere, this failure was less a result of a conscious decision to "stonewall" Marty's Maid than a result of GSA's lack of (continued...) ----------- FOOTNOTE ENDS ----------- attorney time to resolve these appeals appears to have resulted from a mistaken belief that the larger the record, the larger the damage award would be. Expenses Just as we deducted the attorney time spent unnecessarily in taking the depositions of postal employees, we must also subtract the expenses involved in those depositions. We deduct $409.48 for the cost of transcribing, $134 for witness fees, and $80 for process serving for the depositions of postal employees, for a total of $623.48 to be deducted from the $14,548.98 for which Marty's Maid requests reimbursement. Allocation of Award Now that we have decided which attorney fees and expenses were reasonably incurred, we must determine the portion of those fees and expenses for which Marty's Maid is entitled to reimbursement. Marty's Maid cites Kunz Construction Co., Inc. v. United States, 16 Cl. Ct. 431 (1989), as precedent for its argument that it is entitled to recover all of its attorney fees and expenses. As an example of applicant's tendency to stretch somewhat the holdings of individual cases, Marty's Maid states that in Kunz the court awarded the contractor all of its attorney fees. Marty's Maid Reply Brief at 14. In fact, the contractor's application for fees and expenses in Kunz was granted only in part. In Kunz, the Government claimed that the EAJA application should be denied because the fees requested were "exorbitant" in light of the amount in controversy and the amount recovered. There, plaintiff had sought damages of approximately $29,000, had received approximately $8,000, and was seeking an EAJA award of approximately $64,000. The court noted that the Government only made settlement offers before the contracting officer's final decision was issued. Once suit was filed, the Government denied liability and made no further written offers to settle the case in any amount. As a result, the court said, any "exorbitant" fees that might be recovered would have "resulted from defendant's persistence in a position that caused Kunz to incur those fees." Id. at 440. In Marty's Maid, the settlement offers made by the Government were closer to reality than those made by Marty's Maid. The Claims Court denied reimbursement for the fees incurred ----------- FOOTNOTE BEGINS --------- [foot #] 8 (...continued) organization and knowledge of the documents. We found that Marty's Maid was not prejudiced by the Government's failure to produce the documents and we declined to grant Marty's Maid's motion for sanctions. Marty's Maid, slip op. at 2. ____________ ----------- FOOTNOTE ENDS ----------- by Kunz for various pleadings and ordered the parties to come to an agreement on the precise amount of fees to be awarded based on the guidelines in its decision. Id. In Kunz, the plaintiff was forced to defend several motions to dismiss brought by the Government. As noted above, this was not the litigation situation in the case at hand. We do not find the facts in Kunz to be applicable here. We find more relevant the Supreme Court's advice to focus on the significance of the overall relief obtained by the [applicant] in relation to the hours reasonably expended on the litigation. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). We have already held that 141 hours of attorney time billed to Marty's Maid were unreasonable. Multiplying the reasonable number of hours expended here (539 hours) by the amount of attorney fees per hour reimbursable under EAJA ($75 per hour), we get $40,425. From the $14,548.98 in expenses for which we are requested to order reimbursement, we subtract $623.48 in expenses unreasonably incurred, for a sum of $13,925.50. Adding this sum to the $40,425 in attorney fees reasonably expended, we get $54,350.50 that can possibly be reimbursed under the EAJA. We found that the Government's position was not substantially justified on the termination issue but that it was substantially justified in part on the issue of Marty's Maid's damages as a result of the constructive changes to the contract and the improper deductions taken from contract payments. As we stated in a recent decision: It is within our discretion to adjust the amount of attorney fees in accordance with appellant's success in litigating its appeal. However, the allocation of fees is often complicated and there is no set formula dictating their allocation. We view each claim in its entirety, taking into consideration the complexity of the claim, the amount of time spent at hearing, and the degree to which appellant was successful. Jordan & Nobles Construction Co., GSBCA 11277-C(8349), et al. (June 29, 1992). In requesting reimbursement for legal fees and expenses incurred in pursuing this case, Marty's Maid does not specify which fees and expenses pertain to which appeal. Indeed, given how interrelated these consolidated appeals are, it would be virtually impossible to do so. The first appeal involves Marty's Maid's claim that the termination for default should be converted to a termination for the convenience of the Government. This claim is much less complex than Marty's Maid's claim for damages, which we divided into six separate issues. We find the Government's position on the termination for default was not substantially justified, and Marty's Maid needed little time at the hearing to show that the termination for default was improper. Marty's Maid spent the majority of its time throughout this case attempting to prove that it was entitled to almost $50,000 in damages. The vast majority of this litigation centered on the claims for damages due to extra cleaning (both generally and floor stripping and waxing), and due to improper deductions from contract payments. Two of Marty's Maid's six claims for damages were denied entirely and four others were granted at least in part, leading us to conclude that the Government's position in the second appeal was not substantially justified in part. Because of this and because a far greater portion of its time was spent on the more complex claims for damages than on the termination claim, we find Marty's Maid entitled to recover twenty percent of the legal fees and expenses which it reasonably incurred ($54,350.50). In "accordance with [its] success in litigating its appeal[s]," id., slip op. at 5, Marty's Maid is entitled to be reimbursed for $10,870.10 in legal fees and expenses incurred. ______________________ Anne M. Quigley Hearing Examiner