PROTEST COSTS GRANTED IN PART: March 6, 1996
                                                          
 
 
                         GSBCA 13316-C(13107-P)
 
 
                 AT&T CORP., NETWORK SYSTEMS DIVISION,
 
                                           Applicant,
 
                                   v.
 
                      DEPARTMENT OF THE AIR FORCE,
 
                                           Respondent.
 
        Francis J.  O'Toole, David Lewis,  Howard Stanislawski,  and
   Joseph  C. Port,  Jr., of  Sidley &  Austin, Washington,  DC; and
   Nathaniel Friends  and Steven W. DeGeorge of AT&T, Silver Spring,
   MD, counsel for Applicant.
 
        Clarence D. Long, III, Office of General Counsel, Department
   of the Air Force, Washington, DC, counsel for Respondent.
 
   Before Board Judges DANIELS (Chairman), BORWICK, and GOODMAN.
 
   DANIELS, Board Judge. 
 
        AT&T  Corp., Network Systems Division (AT&T) has applied for
   an award of costs incurred in filing and pursuing a protest which
   was  granted by  the  Board.   AT&T  seeks  reimbursement of  the
   following costs:
 
        --   Attorney fees                           $555,620.00
        --   Paralegal costs                           23,575.00
        --   Expert witness fees and expenses         227,117.99
        --   Other litigation-related disbursements    71,040.33
 
   The total amount requested is $877,353.32.
 
        We find  that  this amount  is  excessive when  compared  to
   awards we  have made  in response  to cost applications  stemming
   from protests of similar breadth and complexity.  We consequently
   award only a portion of the requested sum.
 
        In the protest  underlying this cost application,  the Board
   found, as  AT&T alleged, that  the Department of the  Air Force's
   award of a contract for the supply of  telecommunications systems
   to NORTEL Federal Systems, Inc., violated statute and regulation.
   The Air Force  misevaluated aspects of the proposals submitted by
   each of the  offerors.  The agency's  cost-technical tradeoff and
   consequent award decision were irrational because they were based
   on   ratings  which  were  insupportable  in  light  of  evidence
   possessed by the agency itself.   We revised the General Services
   Administrator's  delegation  of  authority to  the  Air  Force to
   conduct this procurement by directing the Air Force to review the
   ratings  as  discussed  in  the  opinion,  weigh  the  evaluation
   criteria  in a  manner permitted  by  the solicitation,  and make
   another  award decision.   AT&T  Corp., Network  Systems  Div. v.
   Department of  the Air Force,  GSBCA 13107-P, 95-1  BCA   27,551,
   1995 BPD   54.
 
        NORTEL appealed  this decision to  the Court of  Appeals for
   the Federal  Circuit.  The Court  found that the appeal  was moot
   and  dismissed it "without  prejudice to AT&T's  pending petition
   for reimbursement  of protest  costs."   NORTEL Federal  Systems,
   Inc. v. United States Air Force, No. 95-1213 (Fed. Cir. Nov.  13,
   1995).
 
        Whenever  the Board  "determines  that a  challenged  agency
   action violates a statute or  regulation or the conditions of any
   delegation  of procurement  authority  [regarding automatic  data
   processing equipment]," it  may "further  declare an  appropriate
   interested  party to  be  entitled  to the  costs  of filing  and
   pursuing  the protest, including reasonable attorney's fees."  40
   U.S.C.     759(f)(5)(B),   (C)   (1988).[foot #] 1      AT&T   is
   an appropriate interested  party to recover  its costs of  filing
   and pursuing the underlying protest because it was the prevailing
   party in that case --  it succeeded on the significant  issues it
   raised and achieved  the benefit it sought in  bringing the suit.
   See Stanley Computer Systems, Inc. v. Department of the Treasury,
   GSBCA 12781-C (12700-P), 94-3 BCA    27,168, at 135,376, 1994 BPD
     183, at 2 (citing Bedford Computer Corp., GSBCA 9837-C(9742-P),
   89-2 BCA   21,827, at 109,811, 1989 BPD   121, at 3).
 
        AT&T  and  the  Air  Force  have  filed  what  they  term  a
   "Settlement  Agreement" in which they "stipulate that $800,000 is
   a reasonable  amount for AT&T's  costs and is fully  supported by
   the documentation submitted with AT&T's petition."
 
        This filing  does not dispose  of the matter.   Awarded sums
   are to be  paid from the permanent indefinite judgment  fund.  40
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 1     This statute  has been amended by the Federal
   Acquisition Streamlining  Act of 1994,  Pub. L. No.  103-355, 108
   Stat. 3243, 3293 (1994).  The  earlier version of the law applies
   in this case because the  underlying protest was filed before May
   5, 1995.  60 Fed. Reg. 17,023-24 (1995).
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   U.S.C.   759(f)(5)(C)  (referencing 31  U.S.C.   1304).   Statute
   entrusts   to  the  Board   alone  the  responsibility   to  make
   determinations  of parties'  entitlement to  costs; the  parties'
   agreement  as to  these matters  thus cannot  bind us.   Sterling
   Federal   Systems,  Inc.   v.   National   Aeronautics  &   Space
   Administration, GSBCA 10000-C-REM (9835-P), 95-1 BCA   27,575, at
   137,425, 1995 BPD   65, at 10-11; Centel Federal Systems, Inc. v.
   Department  of the  Army,  GSBCA  11315-C(11238-P),  92-2  BCA   
   24,779, at 123,621, 1992 BPD   37, at  2 (citing ICF Severn, Inc.
   v.   National   Aeronautics   &   Space   Administration,   GSBCA
   11552-C(11334-P),   92-1   BCA      24,736,   1992   BPD      21,
   reconsideration  denied, 94-3 BCA    27,162, 1994 BPD    153; and
   Bedford Computer Corp.).
 
 
        In carrying out this responsibility --
 
             [w]e take seriously . . . our charge to award
             reimbursement only  for those  costs incurred
             by  a  successful  protester which  are  both
             reasonable and necessary  for the pursuit  of
             the case.   We are  mindful of  the Court  of
             Appeals' counsel  that reimbursing  a winning
             litigant for every expense it has seen fit to
             incur would  not be  just.   Sterling Federal
             Systems, Inc.  v. Goldin, 16  F.3d 1177, 1187
             (Fed. Cir. 1994).
 
   First  Image Management  Co.  v.  Department  of  Justice,  GSBCA
   12896-C (12852-P), 95-2 BCA   27,634, at  137,777, 1995 BPD   84,
   at 3.   We  have on  numerous occasions  declined to  award costs
   which appeared to  us inordinately high, considering  the breadth
   and complexity of the work involved; we have awarded instead only
   those  costs  which   seemed  appropriate.    See,   e.g.,  Octel
   Communications  Corp. v.  General Services  Administration, GSBCA
   13243-C(12976-P),  96-1 BCA   27,928, at 139,471, 1995 BPD   178,
   at 3; First  Image Management Co., 95-2 BCA at  137,777, 1995 BPD
     84,   at  3;  Science   Applications  International   Corp.  v.
   Department  of  the  Navy,  GSBCA  12923-C  (12834-P),  95-1  BCA
     27,603, at  137,532, 1995 BPD    77, at  2-3; Sterling  Federal
   Systems, Inc., 95-1  BCA at 137,427-28, 1995 BPD    65, at 15-16;
   Government Technology  Services, Inc.  v. Department  of the  Air
   Force,  GSBCA  12277-C(12041-P), 94-3  BCA   27,008,  at 134,564,
   1994 BPD   128, at 6-7;  Government Technology Services, Inc.  v.
   Department   of  the  Navy,   GSBCA  10610-C(10389-P),  94-2  BCA
     26,685, at 132,734, 1994 BPD   3, at 5.
 
        A  review   of  our   decisions  issued   on  protest   cost
   applications during  the past  three years  demonstrates that  in
   this period, we have awarded as reasonable and necessary costs of
   filing  and pursuing a protest only one sum which is greater than
   the  amount  AT&T  seeks  here.     The  underlying  protest  was
   extraordinary; it involved a twenty-three day hearing, most of it
   resulting  from  the agency's  unfounded,  last-minute assertions
   that  the protester  made  misrepresentations  to the  Government
   during   the  procurement,   and   the  protester's   consequent,
   successful efforts  to show  the invalidity of  the charges.   We
   ultimately awarded $1,518,645.23  in protest costs in  that case.
   Sterling  Federal Systems, Inc.  v. National Aeronautics  & Space
   Administration, GSBCA 10601-C (10381-P),  94-3 BCA   27,267, 1994
   BPD   233; 95-2  BCA   27,667, 1995 BPD   89;  95-2 BCA   27,828,
   1995 BPD    135.   In arriving at  this amount,  incidentally, we
   made   reductions  in  some   elements  of  the   claimed  costs,
   notwithstanding the  agency's  position that  the higher  figures
   requested were appropriate.
 
 
        No other  cost application  has resulted,  during the  three
   years in question, in an award close to the amount AT&T requests.
   The predecessor to  the aforementioned Sterling protest  resulted
   in  the greatest  reimbursement, $623,329.50.    Sterling Federal
   Systems, Inc.  v.  National Aeronautics  & Space  Administration,
   GSBCA 10000-C (9835-P), 94-1 BCA   26,270, 1993   7 (1992);  95-1
   BCA   27,575,  1995 BPD    65.  That  case was highly  unusual as
   well.  The  litigation over the cost application  took nearly six
   years (including a  side trip to the  Court of Appeals, costs  of
   which  were not  sought here);  considerable  extra briefing  was
   required to respond to both the Board's invitation to address the
   Court's directions on remand and the agency's repeated changes of
   position on elements of claimed  costs.  This caused the attorney
   fees for pursuit of the application  to be much greater than they
   normally are.
 
        In only four other  cases did we find protest  costs of more
   than $400,000 to have been reasonable  and necessary.  Government
   Technology Services,  Inc., 94-3  BCA   27,008,  1994 BPD    128;
   Government Technology Services, Inc., 94-2 BCA   26,685, 1994 BPD
     3;  Cordant,  Inc. v.  Department  of the  Navy,  GSBCA 12226-C
   (12011-P),  94-1  BCA    26,275,  1993  BPD    210;  Westinghouse
   Electric   Corp.   v.   Department   of   Transportation,   GSBCA
   11907-C(11745-P), 93-3  BCA   26,203,  1993  BPD   167.   In  the
   second and third of  these cases, we rejected claimed  consultant
   and  employee  costs  pursuant  to a  limitation  the  Board  had
   imposed, but  which the Court  of Appeals has since  overruled in
   Sterling Federal Systems, Inc. v. Goldin, 16 F.3d 1177 (Fed. Cir.
   1994).  Adding those claimed costs to the sums allowed would have
   resulted in each award being worth about $500,000.
 
        All   four  of  the  protests  underlying  the  cost  awards
   discussed in the preceding paragraph involved matters of law  and
   fact which were commensurate  in breadth and complexity with  the
   ones  involved in the protest underlying the instant application.
   Other   protests  of  similar  nature  have  been  prosecuted  at
   considerably less cost.  For example, the Desktop IV cases, which
   culminated in a  hearing nearly twice as  long as the one  in the
   AT&T  protest  (nine days  instead  of five)  but  were otherwise
   similar  in  that  both  they and  this  one  involved  extensive
   discovery efforts  and complex  issues, spawned  awards averaging
   only  $218,986.18 to  four protesters.   Apple Computer,  Inc. v.
   Department of  the Air Force,  GSBCA 12273-C (12042-P),  94-3 BCA
     27,011, 1994 BPD   125; CompuAdd Corp. v. Department of the Air
   Force, GSBCA 12275-C(12021-P), 94-3 BCA   27,010, 1994 BPD   126;
   Electronic Data  Systems Corp. v.  Department of  the Air  Force,
   GSBCA  12276-C(12028-P),  94-3  BCA    27,009,  1994  BPD    127;
   Government Technology Services, Inc., 94-3 BCA   27,008, 1994 BPD
     128.   The total amount  awarded these four companies  was less
   than what AT&T alone seeks in the instant case.
 
 
        We  acknowledge that AT&T has provided us with documentation
   of virtually every nickel it requests.  That documentation shows,
   however, that the  company devoted  what we  regard as  excessive
   resources to the case.   AT&T's outside counsel spent 2,137 hours
   on  the protest.  They hired two  consulting firms to assist them
   in understanding technical  matters.  One of the  firms spent 619
   hours on  the  case, and  the other  spent 366.    In all,  these
   lawyers and experts worked 3,122 hours on this protest!  And this
   total  does   not  count  the  time  of   paralegals  (for  which
   reimbursement is sought)  and AT&T's in-house counsel  (which was
   extensive, but for which reimbursement is not requested).
 
        AT&T  was of  course free  to  make a  business decision  to
   devote all these resources to  the case.  The protester's choice,
   however,  does not  impinge  on  our statutory  duty  to make  an
   independent  judgment as to  the reasonableness and  necessity of
   the  costs incurred.   This  case does  not appear  to have  been
   different  from   the  others   cited  (excepting   the  Sterling
   misadventures)  and similar cases in terms of the appropriateness
   of costs.  It is not apparent, for example, that any  benefit was
   derived  from AT&T's  having devoted  2,137  lawyer-hours to  the
   protest, compared to the 1,260.5  hours spent by the attorneys in
   the  also-complicated case  of  Grumman  Data  Systems  Corp.  v.
   Department of  the Air  Force, GSBCA  11799-C(11635-P), 93-2  BCA
     25,773, 1993 BPD   16.   Nor is  it evident that any  advantage
   was  secured from AT&T's having spent $227,117.99 on consultants'
   fees and  expenses, far  more than the  $50,000 to  $100,000 each
   protester spent on similar  goods and services in the  comparable
   Grumman,  Cordant,  and  Government  Technology  Services  (GSBCA
   10610-C(10389-P)) cases.
 
        Additionally, we note that AT&T's lawyers charged a "blended
   rate"  of $260  per hour  for each  attorney, whether  partner or
   associate, who worked on the case.  We accept the lead attorney's
   statement  that had the  partners billed  at a  non-blended rate,
   their hourly charge would have been higher than $260.  Given that
   63  percent of  the  hours  billed  were  worked  by  associates,
   however, we question whether the use of the blended rate resulted
   in  total  charges which  actually represented  the value  of the
   services provided.
 
        We  could, given our concerns,  try to make adjustments here
   and there to  AT&T's cost application, in  an attempt to  come up
   with a number that would  represent the reasonable and  necessary
   costs of  filing and  pursuing this protest.   This  method would
   generate specific  numbers, and thus  look precise, but  it would
   not necessarily  lead to  a correct  result.   Approximations are
   inevitable in  this sort of  exercise, since we could  never know
   with  any degree  of certainty  what the  "right" hours  or rates
   really are.   Nor  would it  make much  sense to  go through  the
   expense vouchers one by one, because the total amounts disallowed
   would  pale  in  comparison  to the  variations  which  could  be
   achieved by shifting the "appropriate" numbers of  hours or rates
   of the professionals who worked on the case.
 
 
        The  Supreme Court  has  cautioned  that  "[a]  request  for
   attorney's fees should not result in  a second major litigation."
   Hensley v.  Eckerhart, 461  U.S. 424, 437  (1983).   The suitable
   course of  action  here, it  seems  to us,  is  to take  an  all-
   encompassing   approach.    With   the  exception  of   the  very
   occasional, extraordinary case like  the ones involving  Sterling
   Federal Systems,  our  experience has  been that  the filing  and
   pursuit of even a broad,  complex protest like the one underlying
   AT&T's cost  application should  not result in  more than  half a
   million dollars in costs.  This case is not out of  the ordinary.
   We hold AT&T's recovery to this limit.
 
                                Decision
 
        We GRANT IN  PART AT&T's application and award  to this firm
   as  the reasonable, necessary,  and documented costs  of pursuing
   its protest, $500,000.  This sum shall 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).
 
                                      _________________________
                                      STEPHEN M. DANIELS
                                      Board Judge
   We concur:
   _________________________          _________________________
   ANTHONY S. BORWICK                 ALLAN H. GOODMAN
   Board Judge                        Board Judge