gmbh brief by payableondeath



Application Under the Equal Access            )
 to Justice Act                               )
Decker & Company, GmbH                        )    ASBCA No. 41089
Under Contract No. DAJA76-87-C-0094           )

APPEARANCE FOR APPELLANT:                          Leodis C. Matthews, Esq.
                                                    Matthews & Kelso
                                                    Frankfurt, Germany

APPEARANCES FOR THE GOVERNMENT:                    COL Nicholas P. Retson, JA
                                                    Chief Trial Attorney
                                                   MAJ Cynthia S. Gleisberg, JA,
                                                    Chief, European Trial Team
                                                   CPT Keith Moore-Erickson, JA
                                                    Trial Attorney
                                                    Headquarters, U.S. Army Europe
                                                     & 7th Army


       Appellant, Decker & Company, GmbH (Decker), seeks attorneys’ fees and
expenses pursuant to the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504. In an
opinion issued on 8 March 1994, the Board held that it possessed jurisdiction to review
Decker’s appeal of the termination for default of its underlying construction contract,
94-2 BCA ¶ 26,759. Turning to the merits, we sustained the termination for default. In
doing so, the Board also rejected several minor arguments raised by Decker, including a
contention that “the Army erred in deducting amounts from its invoice for completed
work and in declining to pay it for materials allegedly stored at the jobsite.” 94-2 BCA
¶ 26,759 at 133,121.

       Decker appealed the Board’s decision. On appeal, the Government also
challenged our jurisdictional determination. In an opinion issued on 21 February 1996,
the United States Court of Appeals for the Federal Circuit agreed with the Government’s
arguments and held that the Board lacked jurisdiction to review the default termination.
Nonetheless, the court agreed with “the Board’s decision that the termination for default
was proper.” In addition, the Federal Circuit ruled that the Board erred in upholding the
Government’s deductions of DM 75,817.27 from the amounts owed for completed
work, based on alleged discrepancies in percentage of work completed. Accordingly,
the Court affirmed in part, reversed in part, and remanded the appeal to the Board for
further proceedings. Decker & Co. v. West, 76 F.3d 1573, 1582-83 (Fed. Cir. 1996).

        Upon receipt of the Court’s mandate, we remanded the case to the parties.
Subsequently, the parties informed the Board that they had settled all aspects of the
litigation, except for the issue of EAJA fees and expenses incurred with respect to the
Board proceedings under ASBCA No. 41089.1

      Thereafter, Decker filed a timely EAJA application; the Army submitted an
opposition brief; Decker filed a reply brief; and the Army submitted a supplemental brief.


        Decker appended to its application a statement of its net worth at the time when it
filed its appeal with the Federal Circuit. In its opposition brief, the Army correctly
pointed out that Decker was required under 5 U.S.C. § 504(b)(1)(B) to establish its
eligibility as of the time when “the adversary adjudication was initiated,” i.e., June 1990.
It is well-established that applicants may supplement their original EAJA applications to
demonstrate that they meet the Act’s eligibility requirements. See, e.g., Ed Fields v.
United States, 29 Fed. Cl. 376 (1993); Decker & Co., ASBCA No. 38072, 92-3 BCA
¶ 25,057. We accorded Decker that opportunity, and it supplemented its reply brief with
affidavits and financial records which, taken together, establish its eligibility.

                                  PREVAILING PARTY

       The parties appear to differ as to whether Decker was a “prevailing party,” as
defined in 5 U.S.C. § 504(a)(1). At first glance, the Army’s position seems meritorious.
Of the several issues which it presented to the Board, Decker appealed only two to the
Federal Circuit: the default termination and the Government’s deductions for alleged
discrepancies in percentage of work completed. Further, the Federal Circuit rejected
Decker’s attempt to overturn the default termination. It thus prevailed only on the less
significant issue of the Government’s deductions.

       But, pursuant to long-standing precedent of this Board and other tribunals, we hold
that Decker is a prevailing party because it clearly achieved some of the benefits which it
sought in this litigation. Accord ISC-Serco, ASBCA No. 36397, 91-3 BCA ¶ 24,087
(appellant prevailed on only 1 of 10 claims); Jackson Engineering Co., ASBCA No.
36220, 91-3 BCA ¶ 24,178 (applicant prevailed where it received only 8.8 percent of

       Decker’s appellate attorney filed an EAJA application with the Federal Circuit for
       fees incurred at that level. It is our understanding that the Court has resolved that

amount claimed); Aislamientos y Construcciones Apache, S.A., ASBCA No. 45437, 98-1
BCA ¶ 29,378 (appellant prevailed where recovery was limited to 3.478 percent of its

                            SUBSTANTIAL JUSTIFICATION

        As a prevailing party otherwise eligible, Decker is entitled to recover under EAJA
unless the Government’s position was substantially justified. 5 U.S.C. § 504(a)(1). As
the United States Supreme Court ruled in Pierce v. Underwood, 487 U.S. 552, 101 L. Ed.
490, 504, 108 S. Ct. 2451 (1988), a position or action is “substantially justified” if it is
justified in substance or in the main, or justified to a degree that could satisfy a reasonable
person. The Government bears the burden of demonstrating that its position was
substantially justified. Pierce, 487 U.S. at 575-76.

        In our view, the Government has not met this burden. Indeed, it merely alludes to
the issue in a single footnote of its opposition brief and presents no persuasive arguments
that its position was reasonable. Furthermore, the Federal Circuit reviewed evidence
which was not brought to the Board’s attention by the parties demonstrating that
authorized Government officials had accepted the work which was the subject of the later
deductions. Therefore, the Government erred in taking the deductions, and its actions
were not substantially justified. We find the Government’s position was not substantially
justified. Hence, we conclude that Decker is entitled to a fee award.

                                     SPECIFIC ISSUES

       Although we only have the entitlement aspects of Decker’s EAJA application
under consideration, the Board is constrained to offer the parties guidance with respect to
several specific issues. For example, Decker is generally not entitled to recover for fees
and expenses incurred prior to receipt of the contracting officer’s final decision. Harrell
Patterson Contracting, Inc., ASBCA Nos. 30801, 30802, 30803, 32025, 32208, 33740,
33741, 88-1 BCA ¶ 20,510. Further, because it prevailed on only one of the seven issues
raised before the Board, Decker may recover only those fees and expenses which it can
reasonably allocate to that issue. Hensley v. Eckerhart, 461 U.S. 424, 440 (1983).
Finally, we note that the EAJA, at 5 U.S.C. § 504, places a limit on fees at $75 per hour
unless the involved agency issues a regulation setting forth circumstances which justify a
higher fee. The Department of Defense has not issued a regulation permitting such an
upward adjustment in this appeal. Therefore, Decker’s recovery is limited to the statutory
fee. E.C. Schleyer Pump Co., ASBCA No. 33900, 89-1 BCA ¶ 21,194.2

       For adversary adjudications commenced on or after 29 March 1996, EAJA has
       been amended to raise the maximum allowable rate to $125 per hour. Contract


       The EAJA application is sustained on entitlement and is remanded to the parties
for a determination of quantum.

      Dated: 23 April 1998

                                                  MICHAEL T. PAUL
                                                  Administrative Judge
                                                  Armed Services Board
                                                  of Contract Appeals

I concur                                          I concur

PAUL WILLIAMS                                     MARK N. STEMPLER
Administrative Judge                              Administrative Judge
Chairman                                          Vice Chairman
Armed Services Board                              Armed Services Board
of Contract Appeals                               of Contract Appeals

      With America Advancement Act, Pub. L. 104-121, §§ 231, 233, 110 Stat. 847,
      862-864 (1996).

       I certify that the foregoing is a true copy of the Opinion and Decision of the Armed
Services Board of Contract Appeals on an application for fees and other expenses
incurred in connection with ASBCA No. 41089, Appeal of Decker & Company, GmbH,
rendered in accordance with 5 U.S.C. § 504.


                                                   EDWARD S. ADAMKEWICZ
                                                   Recorder, Armed Services
                                                   Board of Contract Appeals


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