DENIED: November 4, 1994
GSBCA 11336-C(11214-P)
INTEGRATED SYSTEMS GROUP, INC.,
Protester,
v.
DEPARTMENT OF THE TREASURY,
Respondent,
and
MEMOREX TELEX CORPORATION,
Intervenor.
Stephen L. Mills, Vice President, Marketing, of Integrated
Systems Group, Inc., Vienna, VA, appearing for Protester.
Barbara Harris Vail and Arthur I. Rettinger, U.S. Customs
Service, Department of the Treasury, Washington, DC, counsel for
Respondent.
William A. Roberts III, Lee Curtis, and Brian A. Darst of
Howrey & Simon, Washington, DC, counsel for Intervenor.
Before Board Judges DANIELS (Chairman), PARKER, and DEVINE.
DANIELS, Board Judge.
The Board denied a protest brought by Integrated Systems
Group, Inc. (ISG), which alleged that a Government agency's
request for proposals to supply computer hardware and software
contained ambiguous and restrictive specifications. The agency
in question was the U. S. Customs Service, a bureau of the
Department of the Treasury. Integrated Systems Group, Inc.,
GSBCA 11214-P, 91-3 BCA 24,155, 1991 BPD 140. The decision
was written by a panel of judges none of whom is presently a
member of the Board. Integrated Systems Group, Inc. v.
Department of the Treasury, GSBCA 11214-P-R (Oct. 6, 1994).
The Board's decision used particularly strong language in
criticizing protester's positions. It called them "bogus,"
"totally without merit," "nothing more than an allegation
designed to cozen this Board into [a] false belief," "simply
disingenuous," "fictitious," and "make-believe." The decision
called protester's determination to file and proceed with the
case "a blatant abuse of the protest process." 91-3 BCA
24,155, 1991 BPD 140.
Memorex Telex Corporation intervened in the case on the side
of the Government. In its posthearing brief, the intervenor
moved for monetary sanctions against protester. Memorex Telex
maintained that because the protest was clearly filed in bad
faith and with the knowledge that ISG had no valid basis of
protest, ISG should be required to reimburse Memorex Telex for
its costs of defending the protest, including the attorney fees
incurred. The panel of judges to which the case was assigned did
not rule on this motion. After the case was decided, the
Government filed its own motion for imposition of monetary
sanctions against protester, asking that the Board require ISG to
pay the costs the Government incurred in defending a protest
which had been brought in bad faith. The Board docketed the
Government's motion as GSBCA 11336-C(11214-P). Earlier this
month, in dismissing protester's motion for reconsideration of
the panel's decision, we informed the parties that both sanctions
motions would be considered under docket number 11336-C(11214-P).
That case is being resolved in the present opinion by a new panel
of judges.
Discussion
Although the two motions are founded on the same theory, the
fact that they are brought by two different parties is important
to our analysis.
Memorex Telex, the intervenor in the case, asks us to order
one private party to the protest to transfer money to another
private party. The Board's authority is limited to that granted
by statute. Sterling Federal Systems, Inc. v. Goldin, 16 F.3d
1177, 1186 (Fed. Cir. 1994); SMS Data Products Group, Inc. v.
Austin, 940 F.2d 1514, 1517 (Fed. Cir. 1991); ViON Corp. v.
United States, 906 F.2d 1564, 1567 (Fed. Cir. 1990). Statute
vests in us the power to resolve disputes between the Government
and certain private parties in certain circumstances. 40 U.S.C.
759(f) (1988); 41 U.S.C.A. 606, 607 (1994). The law does
not permit us to resolve disputes between two private parties.
Although we allow intervention in protests which are filed with
us, an intervenor must take a position either for or against the
Government's position as to each count; an intervenor may not use
the protest process to litigate against another private party.
Rule 5(a)(4), (b)(4).[foot #] 1 Memorex Telex's choice
to volunteer in support of the Government in this case does not
confer on us the power to adjudicate rights between Memorex Telex
and ISG.[foot #] 2 The intervenor's motion must be
denied, without regard to whether ISG brought this protest in bad
faith or not.
The Government's motion is not susceptible to such summary
treatment. With regard to a similar motion made by another
agency, this Board held five years ago that it "has the authority
to impose sanctions, including awards of reasonable attorneys
fees and other costs, against parties and attorneys who litigate
in bad faith." International Technology Corp., GSBCA
10056-C(10010-P), 90-1 BCA 22,341, at 112,283, 1990 BPD 2, at
5 (1989). We concluded in that decision that this power derived
from our inherent authority to control our docket. Noting that
we had dismissed a protest for failure of a party to litigate in
good faith, we made the following statement: "It makes no sense
that we could, as a sanction for abuse of our process, dismiss a
protest involving a multi-million dollar procurement, yet could
not make an award of attorney fees totalling in the thousands."
90-1 BCA at 112,283, 1990 BPD 2, at 5-6.
The year after we issued this decision, the Court of Appeals
for the Federal Circuit held that because the authority to
dismiss a protest, based on a finding that the case was brought
in bad faith, is not explicitly given to the Board by statute, we
do not have that authority. ViON Corp., 906 F.2d at 1567;
Sysorex Information Systems, Inc., GSBCA 10642-P, et al., 90-3
BCA 23,083, 1990 BPD 164. Thus, the Court eliminated the
legal underpinning for our decision in International Technology.
During the current year, while writing legislation dealing
with Federal Government procurement generally, the Congress
considered in detail whether the statute dealing with protests to
this Board should be amended to deal with bad faith protests.
The Senate addressed the subject in two ways. First, it proposed
amending the law to provide specifically that "[t]he board may
dismiss a protest that the board determines . . . has been
brought in bad faith." Congressional Record, June 9, 1994 (daily
----------- FOOTNOTE BEGINS ---------
[foot #] 1 To be codified at 48 CFR 6101.5(a)(4), (b)(4)
(58 Fed. Reg. 69,246, 69,253-54 (Dec. 30, 1993)).
[foot #] 2 We note in this regard that even where the
Board does have the authority to award costs, and those costs are
of a protester whose attorney fees were increased by the need to
respond to an intervenor's discovery requests, our authority is
properly exercised by requiring the Government, not the
intervenor, to reimburse the protester for the costs. United
______
States v. Compusearch Software Systems, 936 F.2d 564 (Fed. Cir.
_______________________________________
1991).
----------- FOOTNOTE ENDS -----------
ed.), at S6721 ( 1434). Second, the Senate would have required
that the Board's Rules of Procedure --
shall provide that if the board expressly
finds that a protest or a portion of a
protest is frivolous or has not been brought
or pursued in good faith, or that any person
has willfully abused the board's process
during the course of a protest, the board may
impose appropriate procedural sanctions,
including dismissal of the protest.
Id. ( 1438).
The bill then went to the House of Representatives, which
passed it in a form that included the same authority to dismiss
bad faith protests. Congressional Record, June 27, 1994 (daily
ed.), at H5014 ( 1434). The House's authorization to sanction
protesters went further than the Senate's, however. In addition
to permitting "appropriate procedural sanctions, including
dismissal of the protest," for abuse of the board's process, the
House bill provided:
If the board makes a determination [to
dismiss a protest that the board determines
is frivolous, has been brought in bad faith,
or does not state on its face a valid basis
for protest], the board may impose
appropriate sanctions. Such sanctions may
include imposition of liability on the
protester, or other interested party who
joins the protest, for payment to the United
States of all or that portion of the United
States costs, for which such a finding is
made, of reviewing the protest, including the
fees and other expenses . . . incurred by the
United States in defending the protest.
Id. at H5014-15 ( 1434).
The conference committee on this legislation incorporated in
the compromise bill authority for the Board to dismiss protests
which have been brought or pursued in bad faith. H.R. Rept. No.
712, 103d Cong., 2d Sess. (1994) at 53 ( 1434). The conferees
explicitly chose to adopt the Senate's position, and not the
House's, with regard to monetary sanctions, however. Id. at 193.
Section 1437, as proposed by the committee and enacted as part of
Public Law 103-355, states:
The [Board's Rules of Procedure] shall
provide that if the board expressly finds
that a protest or a portion of a protest is
frivolous or has been brought or pursued in
bad faith, or that any person has willfully
abused the board's process during the course
of a protest, the board may impose
appropriate procedural sanctions, including
dismissal of the protest.
Id. at 54. The provisions of the Act described above will take
effect on October 1, 1995, or such earlier date as may be
prescribed by the Board in regulations. Id. at 167-69 ( 10001,
10002).
Taking into account the foregoing history, here is the
situation at the present time with regard to the Board's
authority to impose monetary sanctions against protesters who
come here in bad faith. In 1989, we concluded that we had this
authority, based on a determination that if we could dismiss a
bad faith protest as a matter of docket control, we could also
impose a lesser sanction such as a monetary fine. The following
year, the Court of Appeals eliminated the underpinning of that
decision by holding that we could not dismiss a protest simply
because the case had been brought in bad faith. In 1994, the
Congress effectively overruled the Court's holding by empowering
us to dismiss a bad faith protest. At the same time, however,
the Congress specifically limited the sanctions which could be
imposed on a bad faith protester to "procedural" sanctions. The
new statutory provisions are not in effect yet, but they will be
soon.
The history does not indicate decisively whether we
currently have authority to impose monetary sanctions against a
protester who files or pursues a case in bad faith. It does show
that our original reason for concluding that we have this
authority is invalid, however. Thus, if we do have the power, it
must be based on a theory not heretofore expressed in our
decisions. The Government cites a number of cases involving
inherent authority to impose monetary sanctions, but because they
all involve Federal courts, and we do not have a court's inherent
authority in this regard, under the Federal Circuit's consistent
analysis, the holdings of these cases are not applicable to us.
As a result of Congressional action, within the next few months,
the Board will clearly not have the authority the Government
wishes us to exercise. Although the new statute is not yet in
effect, we choose to follow the intent of Congress that we not
impose monetary sanctions. We decline to consider whether we
possess the power to impose them at this very moment.
Consequently, we also do not consider whether the protest was
filed or prosecuted in bad faith.
Decision
The motions filed by Memorex Telex and the Government for
the imposition of monetary sanctions against the protester are
DENIED.
_________________________
STEPHEN M. DANIELS
Board Judge
I concur:
_________________________
ROBERT W. PARKER
Board Judge
DEVINE, Board Judge, concurring.
I fully agree with the result reached by the majority but
not with its reasons for reaching it. The protest decision in
which this Board asserted the authority to fine a litigant
appearing before it was wrong when decided and it is still wrong
now. It will continue to be wrong until Congress gives us
express statutory power to impose fines. This is so because this
Board has only those powers specifically granted to it by
Congress, together with those powers that can be directly
inferred as necessary to carry out the grant. By statute we have
the power to hear and decide the matters that come before us; we
are empowered to administer oaths and to summon witnesses.
However if our subpoena is not obeyed we need the help of a
constitutional court to enforce it.
A constitutional court, by contrast, has the power to fine
or jail for contempt those who disobey its orders. This is the
major power difference between this Board and a court. The power
to fine or jail a litigant in order to enforce compliance with a
decree (the civil contempt power), or to punish for a
disobedience (the criminal contempt power) is the essence of a
court's control over its litigants. It arises from the inherent
power of a court to control the persons and causes of those who
come before it and has been exercised by constitutional courts
for a great many years.
This Board, however, is not a constitutional court and thus
has no contempt power, and therefore no power to levy fines for
any reason. It has no power to punish the person of the
recalcitrant litigant but it does have the power to control the
cases of those who appear before it. This is the only method it
has to control its proceedings. If its orders are not obeyed its
only recourse is to do harm to a recalcitrant litigant's case by
dismissing it or by imposing less severe sanctions. Those less
severe sanctions, however, do not include fines.
______________________________
DONALD W. DEVINE
Board Judge