DENIED: January 22, 1993 GSBCA 12067-C(11331) ACE SERVICES, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Benjamin N. Thompson, Dunn, NC, counsel for Appellant. Martin A. Hom, Real Property Division, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges DANIELS (Chairman), NEILL, and HYATT. Board Judge DANIELS. Ace Services, Inc. (Ace) seeks reimbursement, under the Equal Access to Justice Act (EAJA), 5 U.S.C. 504 (1988), of the attorney fees and courier expenses it incurred in successfully prosecuting its appeal of a General Services Administration (GSA) contracting officer's decision before this Board. This application, filed on October 1, 1992, is in the amount of $6,430.25. In the underlying case, Ace persuaded us that it was entitled to an equitable adjustment, for the first option year of its janitorial services contract, covering the entirety of wage increases mandated by Department of Labor wage determinations. We held that the relevant Federal Acquisition Regulation (FAR) clause was required to be included in the contract and benefits the contractor; consequently, it must be read into the contract notwithstanding its physical absence. A GSA Regulation (GSAR) clause which is inconsistent with the FAR clause was consequently given no effect, despite its inclusion in the contract. Ace Services, Inc. v. General Services Administration, GSBCA 11331, 92-2 BCA 24,943 (1992). Following this interlocutory decision, the parties agreed on the amount which should be paid to Ace, and the appeal was dismissed on appellant's motion. Ace Services, Inc. v. General Services Administration, GSBCA 11331 (Sept. 17, 1992). A Government agency may defeat a successful litigant's EAJA application by convincing the adjudicative officer "that the position of the agency was substantially justified." 5 U.S.C. 504(a)(1) (1988). The term "substantially justified" means "'justified in substance or in the main' -- that is, justified to a degree that could satisfy a reasonable person." Pierce v. Underwood, 487 U.S. 552, 565 (1988). Under this standard, the trier of the case must determine whether the Government's position had a reasonable basis in both law and fact. Chiu v. United States, 948 F.2d 711, 715 (Fed. Cir. 1991); Beta Systems, Inc. v. United States, 866 F.2d 1404, 1406 (Fed. Cir. 1989); Insul-Glass, Inc., GSBCA 9910-C(8223), 89-3 BCA 22,223, at 111,751 (1989). Where the case presents an issue of first impression, the Government's decision to litigate is presumed to be substantially justified. FDL Technologies, Inc. v. United States, 26 Ct. Cl. 484, 488 (1992); Alaskan Arctic Gas Pipeline Co. v. United States, 19 Ct. Cl. 211, 219 (1990) (both relying on Devine v. Sutermeister, 733 F.2d 892, 898 (Fed. Cir. 1984)). Before Ace brought the case that underlies the instant cost application, this Board had twice found that the GSAR clause in question represented a reasonable, enforceable allocation of the risks of increased labor costs on a service contract. Semo Security Guard Corp., GSBCA 9503, 89-2 BCA 21,614 (1989); Mr. Klean's Janitor & Maintenance Service, Inc., GSBCA 7613, 88-2 BCA 20,716 (1988). After the relevant FAR clause had been promulgated, the General Accounting Office had opined otherwise. IBI Security Service, Inc., 69 Comp. Gen. 707 (1990), 90-2 CPD 205. Prior to Ace's appeal, however, this Board had never considered this matter. The GAO's recommendations are not binding on us, and this one was made in the context of a bid protest, not a dispute about a contract in which both parties had willingly agreed to be bound by the GSAR clause. In these circumstances, we find that the issue was one of first impression, and that the Government was substantially justified in pursuing it to decision. Decision The application is DENIED. _________________________ STEPHEN M. DANIELS Board Judge We concur: _________________________ _________________________ EDWIN B. NEILL CATHERINE B. HYATT Board Judge Board Judge `