GRANTED IN PART: May 11, 1994 GSBCA 12681-C(12616-P) HSQ TECHNOLOGY, INC., Protester, v. NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, Respondent. Donald O. Pratt and Paul H. Sanderford of Canterbury, Stuber, Pratt, Elder & Gooch, Dallas, TX, counsel for Protester. Sumara M. Thompson-King, Office of General Counsel, National Aeronautics and Space Administration, Washington, DC; and Rosamond M. French, Office of the Chief Counsel, Ames Research Center, Moffett Field, CA, counsel for Respondent. Before Board Judges PARKER, BORWICK, and NEILL. PARKER, Board Judge. HSQ Technology, Inc. (HSQ) has filed, pursuant to 40 U.S.C. 759(f)(5)(C)(1988), for protest costs incurred pursuing its protest of the proposed award of a contract by the National Aeronautics and Space Administration's (NASA's) Ames Research Center to Engineering Design Group, Inc. (EDG). The Government objects to HSQ's status as an appropriate interested party entitled to recover its protest costs. The Government also contends that if the Board decides that HSQ is an appropriate interested party, HSQ should only receive the attorney fees and costs related to the first count of its protest. In its amended motion, HSQ seeks a total award of $12,221.03. This figure is composed of $8,884 in attorney fees for handling the protest and original cost motion, $1,699.50 in attorney fees for preparing the amended cost motion, $630 in attorney fees for preparing a supplemental amended cost motion, and $1,007.53 in disbursements for travel, postage, photocopying, telecopying, and telephone expenses. We grant HSQ's Motion for Protest Costs in the amount of $11,591.03. Background The protesters in the underlying protest, HSQ and Science Applications International Corp. (SAIC), raised numerous issues concerning the Government's actions during the course of the procurement process. On October 6, 1993, the Board stayed consideration of all issues except the allegation contained in Count I -- that NASA failed to obtain a valid delegation of procurement authority (DPA) from the General Services Administration (GSA), and therefore had no power to proceed with this procurement for automatic data processing equipment (ADPE). The Board granted the protesters' Cross-Motion for Summary Relief on Count I on November 3, 1993, and directed the Government to obtain a DPA, and to proceed with the procurement in accordance with statute and regulation. The events leading up to our decision that the Government is required to obtain a DPA are articulated in the Board's decision in Science Applications International Corp. v. National Aeronautics and Space Administration, GSBCA 12600-P, et al., 1993 BPD 328 (Nov. 3, 1993). We briefly summarize those events below. The Government issued solicitation no. RFP2-35117(BEJ) for the delivery and installation of a Facility Automation Control System for the Unitary Plan Wind Tunnels Complex at Ames Research Center. The automation project required the selected offeror to demolish existing tunnel and auxiliary equipment, motor control centers, and concrete foundations. The selected offeror would then rebuild the facilities and include several automation systems during the course of the construction. The Government subsequently informed the protesters that EDG was the intended contract awardee. Following their debriefing sessions, the protesters filed their protests alleging in part that the Government failed to obtain a DPA for the procurement. The Government filed a Motion to Dismiss for lack of jurisdiction and untimeliness and each protester filed a Cross-Motion for Summary Relief. The Government advanced three arguments in support of its position that the protests should be dismissed: (1) the embedded exception contained in the Federal Information Resources Management Regulation (FIRMR) applied to remove the procurement from Brooks Act coverage and from Board jurisdiction; (2) even if the embedded exception did not apply, the regulatory or blanket DPA contained in the FIRMR applied and the Government proceeded with a valid DPA; and (3) even if the embedded exception and regulatory DPA did not apply, there was still time for the General Services Administration (GSA) to ratify the unauthorized procurement process because the contract had not yet been awarded. The Government also contended that the protesters' allegations that it failed to obtain a DPA were untimely. The Board ruled that the embedded exception did not apply to the procurement because the Government was procuring ADPE -- an interconnected system of equipment, the principal functions of which were the "automatic acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information." The Board also found that the regulatory DPA did not apply because the value of the federal information processing equipment to be procured by the Government exceeded the threshold of $2,500,000 contained in GSA's regulatory DPA. Furthermore, the Board ruled that following the Federal Circuit's decision in CACI, Inc. v. Stone, 990 F.2d 1233 (Fed. Cir. 1993), the Board could not ratify a procurement or contract that the agency lacked authority to create. The Board left open the question of whether GSA could ratify NASA's unauthorized actions during the course of the procurement. Finally, the Board decided the protesters' allegations that the Government failed to obtain a DPA were timely. The Board stated that before it could address allegations concerning the agency's actions during the procurement process, it first must determine whether it had subject matter jurisdiction to hear the protest. The Board found that it had subject matter jurisdiction to hear the protest and that the Government needed to obtain a DPA before it could proceed with the procurement. Discussion Prevailing party status The Board may award an appropriate interested party protest costs when the Board determines the agency has violated a statute, regulation, or the conditions of a delegation of procurement authority. 40 U.S.C. 759(f)(5)(B), (C) (1988). The Board has interpreted the phrase "appropriate interested party" to mean a prevailing party, i.e., "one that has succeeded on any significant issue in the litigation that achieves some of the benefit it sought in bringing suit." Bedford Computer Corp., GSBCA 9837-C(9742-P), 89-2 BCA 21,827, at 109,811, 1989 BPD 131, at 3. A protester crosses the threshold of prevailing party status if it can point to a resolution of the dispute which materially alters the parties' legal relationship in a manner which Congress sought to promote in the fee statute. Id. Based on HSQ's success on its Cross-Motion for Summary Relief, we find that it is a prevailing party entitled to an award of protest costs. The Government advances two arguments to support its contention that HSQ is not a prevailing party for purposes of an award of protest costs. The Government avers that HSQ did not succeed on a significant issue which achieved some of the benefit it sought in bringing the protest. The Government contends that HSQ only prevailed on the "limited issue" that the Board had jurisdiction and that NASA needed to obtain a DPA for the procurement. According to the Government, prevailing on this issue did nothing more than give HSQ the possibility of prevailing on other counts. The Government also argues that because HSQ did not take the lead role in arguing the DPA issue that it is not entitled to protest costs for "merely parrot[ing]" SAIC's Count I and "tagg[ing] along on the coattails" of SAIC's Cross-Motion for Summary Relief. In advancing its first argument, the Government relies on the Board's decision in Computervision Corp., GSBCA 8838-C(8709- P), 87-2 BCA 19,818, 1987 BPD 70. The protester in that case raised two issues. The first was whether the agency had improperly failed to obtain a DPA. The second was whether the failure to obtain a DPA voided the procurement. Protester prevailed on the first issue, but not on the second. After prevailing on the first issue, protester sought recovery of its protest costs. In denying the motion for protest costs in that case, the Board stated that the "mere violation of either statute or regulation is not in itself sufficient basis for award of protest costs." Id. at 100,276, 1987 BPD 70, at 4. While protester succeeded on the first issue, the Board found that the second issue was the significant issue for purposes of a cost award. Thus, if protester had prevailed on the second issue, "there is no doubt that it would have qualified for the relief requested." Id. As a result of the Federal Circuit's decision in CACI, the Board's holding in the Computervision protest is no longer valid. In CACI, the Federal Circuit stated that the lack of a DPA is no longer a remediable deficiency as had been assumed by the Board, and that a "government procurement or contract" for ADPE may not proceed without a valid DPA. 990 F.2d at 1236. Thus, the determination that the Government conducted its procurement without a valid DPA is a significant threshold issue which must be resolved before the Board can address any other allegations concerning the Government's actions during the course of the procurement process. Because of the importance of this issue, the focus of the protest could quickly shift from alleged improprieties by the agency during the course of the procurement process to whether the agency was conducting an unauthorized procurement due to the lack of a valid DPA. This was exactly what occurred in this protest. In this protest, HSQ has effectively prevailed on what was recognized in Computervision as the critical issue. NASA failed to obtain a valid DPA and, therefore, the solicitation and all actions taken pursuant to it are void. In Computervision, the Board expressly stated that prevailing on this second issue could support an award of protest costs. Thus, the Government's argument is without support. Furthermore, HSQ obtained at least some of the benefit it sought in filing the protest. In the underlying decision, we stated that the Board was unable to ratify a procurement or contract that the agency lacked authority to create, and that GSA would have to decide for itself whether to ratify the actions NASA had already taken during the course of this procurement. We went on to hold that the Government must obtain a DPA and proceed with the procurement in accordance with statute and regulation. The Government appears to believe that because the Board ordered the Government to obtain a DPA rather than directing an award to HSQ, HSQ was precluded from obtaining the relief it sought -- the award of the contract or the cancellation of the procurement. At this point, we have no knowledge of what action NASA and GSA propose. However, if GSA does ratify NASA's actions, that decision may itself be protestable. Furthermore, if NASA's actions are not ratified, NASA will have to obtain a proper DPA and completely redo the procurement. As we stated in Telos Field Engineering, GSBCA 9887-C(9735-P), et al., 90-3 BCA 23,184, 1990 BPD 194, [T]he Board fashioned its relief so as to restore the procurement to the point at which the violation occurred. . . . Thus, the decision left open the possibility that [HSQ] would have a further opportunity to obtain the award. As such, [HSQ], having achieved at least some of the benefit sought in bringing suit, is an appropriate prevailing party, eligible for an award of costs. Id. at 116,380, 1990 BPD 194, at 4-5. The Government's second argument is that HSQ is not entitled to protest costs because it did not take the lead role in arguing the DPA issue. The Government contends that there was no original legal work in either Count I of HSQ's protest or HSQ's Cross-Motion. The Government avers that HSQ should be precluded from receiving an award of protest costs because of the lack of an original work product. The fact that SAIC, not HSQ, took the lead role in prosecuting Count I of the protest does not preclude HSQ from an award of protest costs incurred in pursuing the count. The time a prevailing party spends prosecuting the protest determines the proper amount of the award, not entitlement to the award. The Board may award a larger amount to a protester who took the "laboring oar" in the prosecution of a protest than to its fellow protester because it spent more time on the protest. Cordant, Inc. v. Department of the Navy, GSBCA 12226-C(12011-P), 94-1 BCA 26,275, at 130,732, 1993 BPD 210, at 2. In addition, intervenors on the side of protesters may be awarded protest costs whenever the Board can determine they are prevailing parties even though they did not take a lead role in prosecuting the protest. See MBI Business Centers, Inc., GSBCA 11030, 93-1 BCA 25,240, at 125,715 (1991) (Board may award protest costs to intervenors on the side of protesters whenever they are prevailing parties and the public interest in encouraging full and open competition is advanced); Storage Technology Corp., GSBCA 9109-C(8959-P), 88-1 BCA 20,293, 1987 BPD 234 (intervenor may be awarded protest costs if it endorsed protester's position, and assisted in formulating or proving the contention). The Government's argument that HSQ should not be awarded protest costs because it did not take the lead role in prosecuting the protest is without merit. As stated above, HSQ is a prevailing party because it succeeded on a significant issue which achieved some of the benefit it sought in filing the protest. The fact that it did not take the lead role in prosecuting the protest will only affect the amount of its award, not its entitlement to an award. Because of HSQ's status as a prevailing party, we find that it is entitled to an award of protest costs. Objections to attorney fees The Government raises several objections to the amount of attorney fees requested. The Government argues that time spent by HSQ on claims which were not decided by the Board should be excluded from any fee award. It contends that because HSQ's counsel did not expressly state how much time should be allocated to each protest count, HSQ's request for costs relating to the entire protest should be denied. The Government also contends that any costs incurred prior to September 28, 1993, the date on which HSQ learned of the grounds for its protest, should be denied. In addition, the Government argues that the time spent preparing HSQ's brief for its Cross-Motion for Summary Relief should be reduced because HSQ's attorney spent too much time on the brief given his skill level and the number of quotes from the solicitation contained therein. The Government goes on to contest the time spent by HSQ's counsel reviewing SAIC's Supplemental Summary Judgment Motion, Amended Protest, and Statement of Undisputed Facts. It argues that HSQ should not recover fees associated with reviewing the documents because HSQ never acted upon or used the documents in any subsequent submittals. Furthermore, the Government avers that HSQ's counsel unnecessarily duplicated its efforts by having two senior attorneys review documents filed with the Board. In response to the Government's objections, HSQ argues that counsel did not duplicate its efforts. It states that its senior attorney was not always available for various conferences with the Board and that a fully briefed attorney needed to be available to step in. Furthermore, it contends that the Government's argument that it should not be compensated for time spent reviewing SAIC's briefs and Statement of Undisputed Fact is "ludicrous." HSQ argues that counsel was required to review the documents to ensure that the documents supported HSQ's position. It contends that counsel was unable to make such a determination until it had reviewed the documents thoroughly. In its submission responding to the Government's objections, HSQ removed $1,566.50 of attorney fees incurred from consideration. Our review of the entries which remain following HSQ's reduction of its fee request persuades us that the time spent pertained exclusively to the DPA issue contained in Count I. Moreover, the work performed and the time spent by counsel was reasonable. Thus, we reject the Government's argument to reduce or deny the fee award on this ground. The Government contends that costs incurred prior to September 28, 1993, should be denied. Specifically, the Government objects to nine hours spent reviewing NASA's rejection of HSQ's offer, researching the provisions of the Federal Acquisition Regulation (FAR) for possible protest grounds, and attending NASA's debriefing of HSQ. In the past we have awarded costs incurred when the protester begins preparing to file its complaint with the Board. Laptops Falls Church, Inc. v. Department of Justice, GSBCA 12229-C(12117-P), 93-2 BCA 25,857, at 128,659, 1993 BPD 56, at 2. In order to prepare its protest, HSQ would have to determine the issues to be raised in the protest and the legal basis for each. After reviewing HSQ's submission, we conclude that the time was spent preparing for the protest and that the time incurred was reasonable. The Government avers that the costs associated with the time spent preparing HSQ's brief should be reduced because of the number of quotes contained therein. The fact that counsel quoted the relevant portions of the solicitation in its brief is not troublesome. Counsel still had to analyze the information prior to preparing the brief and had to formulate legal arguments based on this analysis. Therefore, we deny the Government's request to reduce the fee award on this ground. The Government argues that HSQ should not recover fees associated with reviewing SAIC's submittals because HSQ never acted on or used them. The Government's argument is not persuasive. Had HSQ counsel failed to review this material they would have run a serious ethical risk. HSQ could not know whether it needed to act on or use the documents, or whether it needed to prepare its own submissions, until it reviewed the documents. Our examination of HSQ's time sheets persuades us that the time spent by counsel reviewing these documents was reasonable. Finally, the Government argues that HSQ's counsel duplicated its efforts by having two senior attorneys review documents. The Government's objection focuses on 1.6 hours spent by the two senior attorneys to read documents from the Board and SAIC. Out of this 1.6 hours, NASA stated that it would not contest 0.2 hours. After reviewing both the Government's and HSQ's arguments on this issue, we are persuaded by HSQ's position. Our review of HSQ's time sheets convinces us that the time spent by the HSQ attorneys was not unreasonably duplicative. Moreover, the Board observes that NASA counsel used the same teaming technique. Objections to disbursements The Government raises two objections to HSQ's disbursements. The Government objects to $711.37 incurred when HSQ's counsel traveled to San Francisco to attend HSQ's debriefing. The Government contends that these costs should not be awarded because they were incurred before HSQ became aware of any grounds for protest. The Government also argues the postage, telecopier, photocopy, and telephone expenses should be reduced to one-third of the claimed amount because no more than one-third was incurred for Count I. Accordingly, NASA states that it will not contest $160 of the disbursements. HSQ did not advance any arguments in response to the Government's objections. However, it did reduce its request for disbursements by $143. The Board recognizes that the costs incurred in attending a debriefing are ordinarily considered a routine business expense and, as such, are not allowable. However, the facts in this case persuade us that HSQ incurred these costs in preparation for filing its protest and are allowable. HSQ retained outside counsel thirteen days before the debriefing occurred and had the intent to file a protest eleven days before the debriefing. Appellant's Motion for Attorney Fees and Costs, Exhibit B at 3rd unnumbered page. The day before and the day of the debriefing, counsel reviewed the solicitation, the FAR, and NASA's FAR supplement. Id. Presumably during this period of time, counsel was formulating the grounds of the protest. Counsel's presence at the debriefing was merely a way for counsel to gather more facts in support of the protest. As stated above, we have awarded costs incurred when the protester begins preparing to file its complaint with the Board. Laptops Falls Church, Inc., 93-2 BCA at 128,659, 1993 BPD 56, at 2. The costs associated with attending the debriefing were incurred after HSQ began preparing to file its complaint and, thus, are allowable. Furthermore, we reject the Government's mere conjecture that the disbursements should be reduced by two-thirds of the claimed amount. Our review of the disbursements, inclusive of HSQ's reduction, persuades us that the disbursements made after the Board's order of October 6 were incurred for Count I. We are also persuaded that the disbursements were reasonable and adequately supported. Amended request for attorney fees HSQ submitted an amended request for attorney fees with its Response to Respondent's Opposition to the Motion for Award of Attorney Fees and Costs. As stated above, HSQ reduced its initial request for attorney fees and costs by $1,709.50 in response to the Government's objections and requested an additional $1,699.50 in attorney fees for time spent preparing its response. Although the Board's rules do not expressly provide for a response from the Government in these situations, we nonetheless reviewed the Government's response. In its response, however, the Government mostly reiterated prior objections. Suffice it to say that we find all of the Government's arguments to be without merit. In advancing its argument, the Government ignores the Board's well established precedent that "an appropriate prevailing party may recoup the expenses incurred in preparing, filing, and defending a cost motion before the Board." Grumman Data Systems Corp. v. Department of the Air Force, GSBCA 11799- C(11635-P), 93-2 BCA 25,773, at 128,245, 1993 BPD 16, at 8; see also Aspect Telecommunications v. Department of the Treasury, GSBCA 11399-C(11250-P), 93-1 BCA 25,423, 1992 BPD 245. In its amended motion, HSQ has requested fees for time spent defending its cost motion. This is clearly within the established precedent of the Board. Therefore, we will award HSQ fees incurred preparing its amended request. Supplemental amended request for attorney fees On February 24, 1994, HSQ filed a Supplemental Amended Motion for Fees and Costs. The supplemental motion was filed following NASA's corrective actions taken as a result of the protest. On or about February 11, 1994, NASA issued two amendments to the solicitation. Amendment 7 incorporates the GSA DPA number for the procurement, provides clarification regarding the evaluation criteria, provides a dollar range for the Government's estimate, and provides for another round of Best and Final Offers from all offerors in the competitive range. HSQ Technology's Supplemental Amended Motion for Fees and Costs, Exhibit A at 2nd unnumbered page. Amendment 8 changes the schedule for completion of work, liquidated damages, and allotment of funds. Id. at 7th-9th unnumbered pages. HSQ requests an additional $630 for attorney fees incurred in reviewing the amendments to the solicitation and in preparing the supplemental cost motion. Our statutory authority gives us the discretion to award an appropriate interested party the costs of filing and pursuing a protest. HSQ is requesting attorney fees for time spent reviewing solicitation amendments which were issued following the completion of the protest process. Because these attorney fees were not incurred with respect to filing and pursuing a protest, we deduct $630 from HSQ's award. Decision The Motion for Protest Costs is GRANTED IN PART in the amount of $11,591.03. This award may be paid, without interest, from the permanent indefinite judgment fund, 31 U.S.C. 1304 (1988). 40 U.S.C. 759(f)(5)(C)(1988). ___________________________ ROBERT W. PARKER Board Judge We concur: ______________________________ ___________________________ ANTHONY S. BORWICK EDWIN B. NEILL Board Judge Board Judge