GRANTED IN PART: June 4, 1993 GSBCA 12305-C(12128) GIANCOLA & ASSOCIATES, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Jeffrey S. Giancola, President of Giancola & Associates, Washington, DC, counsel for Appellant. Thedlus L. Thompson, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges DANIELS (Chairman), PARKER, and HYATT. PARKER, Board Judge. In late 1992, Giancola & Associates, appellant, contested the decision of the General Services Administration, respondent, to award it only $425.00 in termination for convenience costs. We granted the appeal in part. Giancola & Associates v. General Services Administration, GSBCA 12128 (Feb. 5, 1993). Appellant now has moved to recover attorney fees and costs pursuant to the Equal Access to Justice Act (EAJA), 5 U.S.C. 504 (Supp. II 1990). For the reasons stated below, we hold that appellant, as a pro se attorney, is not entitled to recover "attorney fees" under the EAJA. We do, however, award appellant $25.08 for photocopying expenses. Background In February 1992, appellant bid $6,800 to teach a 160-hour procurement management course. Giancola, slip op. at 2. Respondent issued a purchase order to appellant on April 22, 1992, and appellant began reviewing the course materials. Id. In early May, the incumbent instructor filed a protest of this award with the General Accounting Office (GAO). Respondent terminated appellant's purchase order for convenience, and the GAO dismissed the protest. Appellant then filed a termination settlement claim with respondent requesting $3,849.20, a sum incorporating a $50.00 per hour reimbursement rate for teaching services. Id. Respondent awarded appellant a total of $425.00.[foot #] 1 Appellant filed an appeal of that decision with the Board, seeking the full $3,849.20. Respondent claimed that no contract had been formed and asked us to dismiss the claim for lack of the requisite "offer and acceptance." We found that the necessary offer and acceptance occurred, and we reimbursed appellant at $30.77 per hour, for 61 hours of preparation.[foot #] 2 Giancola, slip op. at 3. We also awarded appellant $360.00 in claim preparation expenses, for a total award of $2,236.92. Appellant now moves to recover $1,675.10 in litigation costs pursuant to the EAJA. Appellant's president, Mr. Jeffrey Giancola, seeks the statutory maximum of $75.00 per hour, for 22 hours of work, plus $25.08 spent to photocopy exhibits. Discussion Mr. Giancola is a licensed attorney, the proposed procurement law instructor, and the president of Giancola & Associates, a sole proprietorship. Appeal File, GSBCA 12128, Exhibit 2 at 1. He also litigated this case. We find that appellant, as a business of less than 500 employees with a net worth of less than $7 million, is eligible to recover under the EAJA. 5 U.S.C. 504(b)(1)(B). The EAJA permits a "prevailing party" to recover "fees and other expenses incurred by that party" unless the "position of the agency was substantially justified or . . . special circumstances make an award unjust." 5 U.S.C. 504(a)(1). Because appellant received the bulk of the relief requested, we find that appellant qualifies as a "prevailing party." Hensley v. Eckerhart, 461 U.S. 424, 440 (1983). We also find that the agency's position was not "substantially justified." To make this determination, we consider "the administrative record, as a whole." 5 U.S.C. 504(a)(2). The administrative record includes the agency's initial action or failure to act as well as its conduct during litigation. Chiu v. United States, 948 F.2d 711, 715 (Fed. Cir. 1991). The Government bears the burden of proving that its position was "substantially justified." Gavette v. Office of ----------- FOOTNOTE BEGINS --------- [foot #] 1 $425.00 is the product of ten hours times $42.50 per hour. Ten hours was the sum of six hours of course preparation plus four hours to prepare the settlement proposal. [foot #] 2 The $6,800 bid divided by 221 hours (61 preparation hours plus 160 course hours) equals $30.77 per hour. ----------- FOOTNOTE ENDS ----------- Personnel Management, 808 F.2d 1456, 1467-68 (Fed. Cir. 1986) (en banc). Before litigation began in this case, respondent's actions included evaluating the appellant's and the incumbent's proposals; choosing appellant as its contractor; issuing a purchase order; providing appellant with the course materials; then, faced with a bid protest, canceling the award for the convenience of the Government. After litigation commenced, respondent argued that the appellant should not recover course preparation expenses on the ground that the parties had not yet formed a binding contract. We found it clear that the parties had formed a contract and that appellant should recover its preparation expenses, albeit at a lower hourly rate than requested. Respondent first argues that its position was substantially justified because, according to respondent, the issue of contract formation was a case of first impression. See Ace Services, Inc. v. General Services Administration, GSBCA 12067-C(11331), slip op. at 2 (Jan. 22, 1993) (Government litigation of matters of first impression usually "substantially justified"). We disagree; the Board merely applied "black-letter" law in finding that a unilateral contract was created when appellant began performance after receiving the purchase order. Nor do we agree with respondent that its actions were otherwise "substantially justified." First, respondent never explained why it canceled the purchase order, although it argued before the Board that the pendency of the GAO protest did not affect its decision. Second, we find troubling respondent's inconsistent approach in its dealings with appellant. Respondent first found that it had formed a contract with appellant sufficient to justify payment of $425.00 in termination costs. Yet, before the Board, it insisted that the parties never formed a binding contract. Finally, we reviewed the voluminous course preparation materials before issuing our decision on the merits. We found, and find here, too, that respondent unreasonably concluded that a new course instructor could prepare for a 160 hour class in four hours. Respondent took either an inconsistent or unreasonable position on almost every issue.[foot #] 3 ----------- FOOTNOTE BEGINS --------- [foot #] 3 The dissent is partially correct in saying that the Government prevailed on the issue of how costs should be calculated. As to one element of the costs, Giancola's hourly rate, we found the claimed rate to be too high. Giancola asked for $50.00 per hour; the Government argued that $42.50 was the proper rate; and the Board found $30.77 per hour to be the correct rate. As to the other element of the costs, the number of hours to be multiplied by the rate, the Government's position was unreasonable. ----------- FOOTNOTE ENDS ----------- Having found that respondent's position was not "substantially justified," we now turn to the question of whether Mr. Giancola, as an attorney appearing pro se, is eligible to recover fees under the EAJA. We hold that he is not. The term "fees and other expenses" is defined in the EAJA to include, among other things not here relevant, "reasonable attorney . . . fees." 5 U.S.C. 504(b)(1)(A). Our appellate authority has held that the EAJA does not authorize payment to pro se litigants for the time they themselves devote to cases. Naekel v. Department of Transportation, Federal Aviation Administration, 845 F.2d 976, 981 (Fed. Cir. 1988). We have explained: What makes the expenses not reimbursable under EAJA is that they are not "fees" or "expenses" in the sense of money that was actually spent by the litigants. Interpreting the EAJA to permit reimbursement would consequently be a major policy shift unintended by the Congress. The courts have evidently decided that the economists' concept of "opportunity costs" -- earning potential forgone in exchange for doing something else -- is not to be considered when determining EAJA reimbursement. American Power, Inc., GSBCA 10558-C(8752), 91-2 BCA 23,766, at 119,048-49. The circuits have been divided on the question of whether an attorney appearing pro se may recover attorney fees under various federal fee-shifting statutes. The U.S. Court of Appeals for the D.C. Circuit held that pro se attorneys may recover such fees in EAJA cases. Jones v. Lujan, 883 F.2d 1031 (D.C. Cir. 1989).[foot #] 4 Other circuits have held that under ----------- FOOTNOTE BEGINS --------- [foot #] 4 Judge Silberman, concurring in Jones because _____ he believed the result was dictated by prior holdings of his circuit, illuminated why the Naekel reasoning applies to the sort ______ of "costs" with which we are concerned here: "Attorney fees" more naturally, it seems to me, describes the fees an attorney charges another for the provision of legal services than it does the opportunity cost a lawyer assumes when he (or she) does his own legal work. In that sense, a lawyer's "cost" of proceeding pro se is absolutely no different than the cost assumed by anyone else who takes on the burden of litigating his own case. It is not just lawyers whose time is (continued...) ----------- FOOTNOTE ENDS ----------- other statutes authorizing the recovery of attorney fees, pro se counsel may not recover. Duncan v. Poythress, 777 F.2d 1508 (11th Cir. 1985), cert. denied sub nom. Poythress v. Kessler, 475 U.S. 1129 (1986) (civil rights case); Falcone v. Internal Revenue Service, 714 F.2d 646 (6th Cir. 1984), cert. denied, 466 U.S. 908 (1984) (Freedom of Information Act case). In 1991, the Supreme Court finally heard one of these cases. In Kay v. Ehrler, 111 S.Ct. 1435 (1991), the Court held that an attorney who successfully represented himself in a civil rights case could not be awarded attorney's fees. The Court reasoned that: Even a skilled lawyer who represents himself is at a disadvantage in contested litigation. Ethical considerations may make it inappropriate for him to appear as a witness. He is deprived of the judgment of an independent third party in framing the theory of the case, evaluating alternative methods of presenting the evidence, cross- examining hostile witnesses, formulating legal arguments, and making sure that reason, rather than emotion, dictates the proper tactical response to unforseen developments in the courtroom. The adage that "a lawyer who represents himself has a fool for a client" is the product of years of experience by seasoned litigators. A rule that authorizes awards of counsel fees to pro se litigants-even if limited to those who are members of the bar-would create a disincentive to employ counsel whenever such a plaintiff considered himself competent to litigate on his own behalf. The statutory policy of furthering the successful prosecution of meritorious claims is better served by a rule that creates an incentive to retain counsel in every such case. 111 S.Ct. at 1438 (footnote omitted). The considerations expressed by the Supreme Court in this civil rights case apply with equal force in EAJA cases and dictate the result here. Although Mr. Giancola litigated his case efficiently and effectively, appellant did not expend any money for the legal services of its president who, in essence, ----------- FOOTNOTE BEGINS --------- [foot #] 4 (...continued) "their stock in trade"; it is everyone. 883 F.2d at 1036. ----------- FOOTNOTE ENDS ----------- represented himself. The EAJA does not permit an attorney appearing pro se to recover "attorney fees" for his own work. Appellant is, however, entitled to recover its reasonable expenses, which in this case amount to $25.08 for photocopying. American Power. Decision For the reasons stated above, appellant is awarded $25.08 in costs pursuant to 5 U.S.C. 504(d), to be paid without interest. _____________________________ ROBERT W. PARKER Board Judge I concur: ________________________ STEPHEN M. DANIELS Board Judge HYATT, Board Judge, dissenting. The underlying decision in this appeal was issued by a single judge under Board Rule 13, which implements the small claims procedure of the Contract Disputes Act of 1978 (CDA). 41 U.S.C. 608 (1988). This procedure is applicable, at the sole election of the contractor, to claims where the amount in dispute is $10,000 or less. Claims processed by the Board under this procedure are to be resolved, whenever possible, within 120 days from the date of election. The decision, which is issued by one judge, is "final and conclusive and shall not be set aside except in cases of fraud." Id., 608(d). Additionally, decisions issued pursuant to the expedited procedures available under this provision "shall have no value as precedent for future cases." Id., 608(e). The legislative history of this provision acknowledges that the expedited procedures will dispense with due process safeguards in order to provide a simple, speedy, and economical resolution of small dollar value claims. The proceeding is intended to resemble an informal arbitration, with the need for discovery, briefs, formal motions, and application of evidentiary rules eliminated or cut to a minimum. The proviso that such decisions be nonprecedential counterbalances the Government's inability to block the election, or to appeal an unfavorable result, by ensuring the decision will have no future application. Finally, the expedited process was expected to be elected primarily by the small contractor who would not wish to employ an attorney to pursue a claim amounting to $10,000 or less, for the obvious reason that the cost of legal representation might well exceed the monetary award even should the contractor win. See S. Rep. No. 1118, 95th Cong., 2d Sess. 28-29 (1978), reprinted in 1978 U.S.C.C.A.N. 5235, 5262-63. The Equal Access to Justice Act, made applicable to administrative proceedings in 1985, 5 U.S.C. 504 (1988), provides that (a)(1) An agency that conducts an adversary adjudication shall award, to a prevailing party other than the United States, fees and other expenses incurred by that party in connection with that proceeding, unless the adjudicative officer of the agency finds that the position of the agency was substantially justified or that special circumstances make an award unjust. Section (a)(2) provides that the application for an award of EAJA fees shall be submitted within thirty days of a final disposition in the adjudication and that when the Government appeals the merits of the underlying decision, no decision on the application may issue until after resolution of the appeal process. As a policy matter, I question whether it is appropriate to apply EAJA's provision for an award of fees in the context of the CDA's small claims procedure, which calls for dispensing with the more expensive trappings of due process. The purpose of EAJA's fee-shifting provision, to diminish the financial disincentive to pursue a meritorious challenge to an unreasonable Government position,[foot #] 1 is largely already achieved by the application of the CDA's informal, expedited procedure. Burdensome legal expenses should not be incurred by either the contractor or the Government in a small claims case.[foot #] 2 In addition, it appears that Congress generally contemplated that the Government would have an opportunity to appeal an unfavorable decision prior to incurring ----------- FOOTNOTE BEGINS --------- [foot #] 1 See H. Rep. No. 120, 99th Cong., 1st Sess. 4-5, ___ reprinted in 1985 U.S.C.C.A.N. 132, 132-33. ____________ [foot #] 2 The election also contemplates that the limit of the Government's obligation would be $10,000 or less. By permitting recovery of attorney fees under EAJA, that liability exposure could be exceeded. ----------- FOOTNOTE ENDS ----------- liability under EAJA. That opportunity is statutorily precluded here.[foot #] 3 Leaving aside the above considerations, however, there is another, more compelling, basis for my dissent. I am not persuaded, viewing the record as a whole,[foot #] 4 that the Government's position was not substantially justified in this case. It is not dispositive that the Government lost the case. Nor is the Government required to establish that its decision to litigate was based on a substantial probability of prevailing. Rather, the test is whether the Government's actions had a reasonable basis in fact and law. See Luciano Pisoni Fabbrica Accessori v. United States, 837 F.2d 465, 467 (Fed. Cir. 1988); Broad Avenue Laundry and Tailoring v. United States, 693 F.2d 1387, 1391 (Fed. Cir. 1982). The underlying issue in this appeal concerns GSA's termination of a purchase order for instructional services in connection with a four week course on the subject of defense acquisition contracts. Appellant had not previously taught this particular course but was selected in large part because of its principal's extensive experience in the field, which was evaluated by GSA's training center in selecting appellant for award. The course was scheduled to be conducted in June 1992. The Government issued the purchase order on April 21, 1992,[foot #] 5 and provided revised instructional materials to appellant on May 11, 1992. Appellant was notified ----------- FOOTNOTE BEGINS --------- [foot #] 3 I recognize that this Board has previously considered EAJA applications by appellants that prevailed under a small claims election. This issue was not raised in these opinions, and the Board did not decline to entertain the applications on this ground. See Sixth and E Associates, GSBCA ___ _______________________ 9165-C(8914), 88-3 BCA 21,089; In-Vest Corp., GSBCA 8340- ______________ C(6365), et al., 88-2 BCA 20,807; see also Buckley Roofing Co., ________ ___________________ VABCA 3374E, 92-2 BCA 24,826; Preston-Brady Co., VABCA 1992E, _________________ 88-1 BCA 20,446 (1987). Nonetheless, I am troubled by what I view to be the relative incompatibility of the two provisions. [foot #] 4 See Roanoke River Basin Association v. Hudson, ___ __________________________________________ No. 92-1526 (4th Cir. Apr. 20, 1993), holding that the focus of assessment of "substantial justification" should be on the Government's overall position in the entire litigation, and not just on its position concerning the issue with respect to which the applicant prevailed. [foot #] 5 Under applicable regulations, issuance of the purchase order did not create a contract. 48 CFR 13.108 (1991). A binding contract, under these regulations, exists either upon substantial performance or acceptance in writing. Giancola did not formally accept the order, but did commence to review the course materials, which contained some 1200 pages. ----------- FOOTNOTE ENDS ----------- of the cancellation of the course on May 27, 1992. On June 1, 1992, appellant filed a termination for convenience proposal claiming termination costs in the amount of $3,849.20, consisting of some 61 hours of preparation time, general administrative expenses, and legal expenses. On July 28, 1992, shortly after appellant had formally converted its proposal to a claim, the contracting officer issued a decision allowing $255 for preparation costs and $170 in legal expenses. Giancola appealed, and the Board granted the appeal in part, awarding $2,236.92. The Government's defense to appellant's claim was twofold. First, respondent argued that, in fact, the issuance of a purchase order had not created a contract, but had simply constituted an offer on the part of the Government to purchase instructional services. That offer may be accepted by commencement of substantial performance, a standard which has not been the subject of significant litigation at this Board. Respondent pointed out in defending against this appeal that the interpretation of the pertinent regulations had not, in this context, ever been addressed by this Board. In addition to questioning whether appellant's preparation efforts were justified under the circumstances, and, if so, sufficient to constitute acceptance, respondent also challenged the computation of costs based on these hours. On the issue of how costs should be calculated, the Government prevailed. As to the issue of whether a contract had been formed, the Government argues that this was a case of first impression at this Board. The majority rejects this argument; I believe respondent has a point.[foot #] 6 The underlying decision relies on an Armed Services Board decision addressing the question of contract formation under the relevant regulation. See Sunshine Cordage Corp., ASBCA 38904, 90-1 BCA 22,382. Although the decisions of other boards may be persuasive, they are not binding on this board and do not provide dispositive guidance to respondent.[foot #] 7 ----------- FOOTNOTE BEGINS --------- [foot #] 6 Indeed, since the decision issued in the appeal giving rise to this cost application was rendered pursuant to Rule 13, and has no value as precedent, the matter remains one of first impression. [foot #] 7 The underlying decision makes much of respondent's "changed" position in concluding that a contract had been formed as a result of appellant's substantial performance. It points out that the contracting officer implicitly conceded the existence of a contract in awarding appellant $425 in termination expenses. Respondent's position at the Board, however, was that regardless of the issuance of a decision, no contract had been formed and that the Board thus had no jurisdiction to hear the appeal. Given precedent recognizing that an erroneous contracting officer decision cannot confer (continued...) ----------- FOOTNOTE ENDS ----------- Additionally, I think that respondent's skepticism as to the number of hours devoted by appellant to "reviewing" the basic course materials and instructor's manual was legitimately raised as a defense to the claim, as well. Respondent pointed out that the purchase order provided for Giancola to teach a four-week, 160 hour course for the fixed price of $6,800. Although the course materials had been revised, appellant was expected to be substantially familiar with the relatively fundamental concepts to be presented. Appellant had taught other such courses for GSA, although it had not taught the particular course in issue here. It does not surprise me that the Government questioned the end result, which was that Giancola, charging $50 per hour and adding a profit plus administrative and legal expenses, sought to recover nearly one-half of the purchase order price, without teaching one hour. Based on a review of respondent's position as a whole, I believe its posture was substantially justified. Accordingly, I would deny this application altogether.[foot #] 8 ________________________________ CATHERINE B. HYATT Board Judge ----------- FOOTNOTE BEGINS --------- [foot #] 7 (...continued) jurisdiction on the Board, see Paragon Energy Corp. v. United ___ ________________________________ States, 227 Ct. Cl. 176, 184, 645 F.2d 966, 971 (1981), I cannot ______ conclude that this change of position rendered the Government's position in the matter substantially unjustified. [foot #] 8 Finally, I note that the $25.08 that is awarded may be inflated. According to the receipt attached, $3.38 of the $25.08 incurred was paid for stationary. Appellant represents, however, that the costs he incurred were for photocopying expenses and does not state in the application that the stationary purchased was needed to pursue this appeal.