        In the United States Court of Federal Claims
                                            No. 13-515C

                                (Filed Under Seal: June 23, 2015)

                           (Reissued for Publication: June 29, 2015)1

*************************************
                                    *
WHR GROUP, INC.,                    *
                                    *
                                    *                   Bid Protest; Claim for Attorneys’ Fees
                    Plaintiff,      *                   and Expenses Under the Equal Access to
                                    *                   Justice Act; Injunctive Relief Granted;
v.                                  *                   Irrational Corrective Action; Whether
                                    *                   Defendant’s Position was Substantially
THE UNITED STATES,                  *                   Justified.
                                    *
                    Defendant.      *
                                    *
*************************************

David T. Ralston, Jr., with whom was Frank S. Murray, Foley & Lardner, LLP,
Washington, D.C., for Plaintiff.

Devin A. Wolak, Trial Attorney, with whom were Stuart F. Delery, Assistant Attorney
General, Robert E. Kirschman, Jr., Director, Deborah A. Bynum, Assistant Director,
Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington,
D.C., Robert D. English, Federal Bureau of Investigation, Of Counsel, for Defendant.

                       OPINION AND ORDER ON PLAINTIFF’S
                   MOTION FOR ATTORNEYS’ FEES AND EXPENSES

WHEELER, Judge.

       Plaintiff, WHR Group, Inc. (“WHR”), prevailed in a bid protest, WHR Group, Inc.
v. United States, 115 Fed. Cl. 386 (2014) (Block, J.), and now seeks attorneys’ fees and

1
  The Court issued this opinion under seal on June 23, 2015 and gave the parties until June 30, 2015 to
submit any proposed redactions of competition-sensitive, proprietary, confidential, or other protected
information. On June 29, 2015, the parties represented to the Court that they had no proposed redactions,
and thus the opinion appears in its original form.
expenses under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. Chief Judge
Patricia Campbell-Smith transferred this case to Judge Wheeler on June 10, 2015. WHR’s
motion for an award of attorneys’ fees and costs has been fully briefed, and the parties have
waived oral argument. The total amount of WHR’s claim is $110,657.59. For the reasons
explained below, the Court GRANTS WHR’s motion.

                                        Background

        In January 2013, the Federal Bureau of Investigation (“FBI”) issued a competitive
solicitation to procure relocation services for its personnel when they are required to move.
The FBI limited the solicitation to companies holding a GSA Federal Supply Schedule
contract to provide such services. “Relocation services” for FBI personnel are designed to
minimize the inconvenience of moving, and include home sale services, home marketing
services, destination area services, reports, mortgage counseling, property management
services, special handling transactions, and move management services. WHR Group, 115
Fed. Cl. at 390. The FBI planned to award from one to four Blanket Purchase Agreements
(“BPAs”) against which task orders could be placed for a 60-month period. Proposals were
to be evaluated on a lowest price, technically acceptable basis. Id.

       The FBI received proposals from seven offerors who met all of the technical
requirements. Id. at 391. Of these seven, the FBI on March 15, 2013 awarded BPAs to
the three lowest priced offerors, Franconia Real Estate Services d/b/a Allegiance
Relocation Services (“Allegiance”), Lexicon Government Services, LLC (“Lexicon”), and
WHR. The evaluated prices of these three offerors ranged between $12,165,000 and
$12,449,000. Id. The incumbent contractor, Brookfield Relocation, Inc. (“Brookfield”)
was ranked sixth in price, and did not receive an award. Id. Brookfield filed a timely
protest at the Government Accountability Office (“GAO”) on March 22, 2013, contending
that WHR and the other two awardees failed to satisfy the “financial capability”
requirement in the solicitation. This requirement mandated that offerors self-certify, with
supporting documentation, that they had the capacity to handle 100 percent of the FBI’s
relocation service needs. Id. at 390.

       The FBI at first opposed the Brookfield protest, but later changed its course
following an “outcome prediction” conference with the GAO attorney assigned to the case.
The FBI elected to resolve Brookfield’s protest by entering into a settlement agreement on
June 7, 2013. Id. at 392. Under the settlement, the FBI agreed to award a fourth contract
to Brookfield, even though Brookfield had submitted only the sixth lowest price. Id. In
light of the settlement, the GAO dismissed Brookfield’s protest as “academic,” but
predictably, two other offerors that had been passed over in the award process filed GAO
protests of the Brookfield award. Capital Relocation Services (“CapRelo”), the fourth
lowest priced offeror, protested to the GAO on June 17, 2013 challenging the award to
                                             2
Brookfield, but did not contest the awards to Allegiance, Lexicon, or WHR. Id. TRC
Global Solutions (“TRC”), the seventh lowest priced offeror, protested to the GAO on June
24, 2013 also challenging the Brookfield award, but not the awards to Allegiance, Lexicon,
or WHR. Id.

       In response to CapRelo’s protest of the fourth award to Brookfield, the FBI first
filed a motion to dismiss which the GAO denied. Following GAO’s denial, the FBI
announced its intention to take “corrective action.” Id. at 392-93. The corrective action
would consist of canceling all four of the BPAs – WHR, Allegiance, Lexicon, and
Brookfield – and conducting a new procurement with a revised solicitation. Id. at 393. On
July 26, 2013, WHR filed its complaint in this Court challenging the proposed corrective
action. Id. at 394. Early in the Court proceedings, all five of the other interested offerors
who had participated in the GAO protests were allowed to intervene in the judicial protest.
The current attorneys’ fees dispute, however, involves only WHR and the Government, so
the other parties and their counsel are not listed in the caption above. See WHR Group,
115 Fed. Cl. at 386-88 for a complete listing of the parties and their counsel.

       On the merits of the protest before Judge Block, WHR prevailed in all respects. On
August 12, 2013, Judge Block entered a temporary restraining order (“TRO”) preventing
the FBI from proceeding with a new procurement. On March 21, 2014, Judge Block
granted WHR’s motion for judgment on the administrative record and entered a permanent
injunction again preventing any new procurement. The Court entered a final judgment on
March 27, 2014. The time for filing an appeal expired on May 27, 2014, but none of the
parties filed an appeal. WHR’s motion for recovery of attorneys’ and expenses followed
on June 17, 2014.

       The basis for the granting of injunctive relief was that the FBI’s decision to take
corrective action was not rationally related to any procurement defect. The protest filed by
CapRelo, the fourth lowest offeror, against the Brookfield award, the sixth lowest offeror,
did not implicate any of the three lowest priced awards. There was no rational justification
for canceling the solicitation and starting over with a new procurement.

                              Eligibility for an EAJA Award

        To receive an award of attorneys’ fees and expenses under EAJA, five conditions
must be met: (1) the fee application must be submitted within 30 days of final judgment
in the action and be supported by an itemized statement; (2) at the time the civil action was
initiated, the applicant, if a corporation, must not have been valued at more than $7,000,000
in net worth or employed more than 500 employees; (3) the applicant must have been the
“prevailing party” in a civil action brought by or against the United States; (4) the
Government’s position must not have been “substantially justified;” and (5) there cannot
                                             3
exist any special circumstances that would make an award unjust. 28 U.S.C. §
2412(d)(1)(A), (B); see also Comm’r, Immigration & Naturalization Serv. v. Jean, 496
U.S. 154, 158 (1990); United Partition Sys., Inc. v. United States, 95 Fed. Cl. 42, 49 (2010);
ACE Constructors, Inc. v. United States, 81 Fed. Cl. 161, 164 (2008).

        1. Timely Application

        An EAJA fee application is timely if it is submitted within 30 days of final judgment
in the action. 28 U.S.C. § 2412(d)(1)(B). The term “final judgment” means “a judgment
that is final and not appealable.” 28 U.S.C. § 2412(d)(2)(G). In the present case, the Court
entered its judgment on March 27, 2014, and the 60-day appeal period expired on May 27,
2014 without any party taking an appeal.2 WHR filed its fee application on June 17, 2014,
and this is timely filed within 30 days of final judgment. Defendant agrees that WHR’s
fee application is timely filed.

        2. WHR’s Size and Net Worth

       WHR meets the size and net worth standards necessary to be eligible for an award
under EAJA. 28 U.S.C. § 2412(d)(2)(B)(ii). Through the declaration of Robert Keefe,
WHR’s President, the Court is satisfied that WHR has at all relevant times employed far
fewer than 500 persons, and that its net worth was below the $7,000,000 threshold. In an
exhibit to his declaration, Mr. Keefe has attached an audited financial statement for 2013
showing a net worth of less than $7,000,000. Defendant does not contest that WHR meets
the size requirements of EAJA.

        3. Prevailing Party

        A plaintiff is a prevailing party under EAJA if it is granted some relief on the merits
of its claim. See Astrue v. Ratliffe, 560 U.S. 586, 591 (2010); Davis v. Nicholson, 475
F.3d 1360, 1363 (Fed. Cir. 2007). WHR easily satisfies the prevailing party requirement.
WHR prevailed on all of its arguments that the FBI’s proposed “corrective action” was
unreasonable and should be enjoined, and that the agency’s continued use of the Brookfield
task order instead of WHR’s valid BPA was improper. Judge Block of this Court issued




2
  The 60th day following the Court’s entry of judgment was Monday, May 26, 2014, the Memorial Day
federal holiday. The deadline thus is extended to the next day, Tuesday, May 27, 2014. Fed. R. App. Proc.
26(a)(1)(C).
                                                   4
both a TRO and a permanent injunction forbidding the FBI’s corrective action. WHR
prevailed in all respects. Defendant agrees that WHR was the prevailing party.

       4. Government’s Position Was Not Substantially Justified

       Where, as here, the Government loses its case on the merits, it bears the burden of
showing that its position was “substantially justified.” See, e.g., White v. Nicholson, 412
F.3d 1314, 1315 (Fed. Cir. 2005); Dalles Irrigation Dist. v. United States, 91 Fed. Cl. 689,
702-03 (2010) (finding that the Government’s position was not substantially justified
where government conduct directly contravened the parties’ contract); see also Doty v.
United States, 71 F.3d 384, 385 (Fed. Cir. 1995). The government’s “position” that must
be substantially justified encompasses the entirety of its conduct, including both agency-
level action and the litigation. Doty, 71 F.3d at 386; Standard Commc’ns, Inc. v. United
States, 106 Fed. Cl. 165, 172 (2012). Defendant contends that, even though it lost the
protest on the merits, its litigation position was substantially justified. This is the one area
of the five EAJA conditions where Defendant opposes WHR’s application for fees and
expenses.

        The FBI’s plan to implement corrective action took a wrong turn when the agency
decided to award a fourth contract to Brookfield to resolve Brookfield’s GAO protest,
notwithstanding that Brookfield was only the sixth-priced offeror in line for award. Thus,
in settling with Brookfield, the FBI planned to leave the three lowest-priced contracts in
place, pass over the fourth- and fifth-priced offerors, and award an additional contract to
Brookfield. Even though the fourth- and fifth-priced offerors were not then involved in
Brookfield’s GAO protest, it was naïve for the FBI to think that these passed-over offerors
would not complain about the FBI’s apparent favoritism toward Brookfield. Indeed, in
addition to awarding a fourth contract to Brookfield, the FBI executed the aforementioned
settlement agreement with Brookfield specifically anticipating that these passed-over
offerors might file a new protest at the GAO or the Court of Federal Claims. The June 7,
2013 settlement agreement provided in part:

              (c) If a protest is filed by a disappointed bidder, Brookfield
                  will file a request for summary dismissal (at GAO) or
                  move to dismiss (at the U.S. Court of Federal Claims);

              (d) If the circumstances under Paragraph (c) occur, the FBI
                  will join Brookfield’s request or motion and/or file its
                  own;

              (e) If the dismissal is denied, FBI Contracting Officer Dina
                  Olibah represents that her/the FBI’s present intent is to
                                               5
                  take corrective action by amending the RFQ to eliminate
                  the financial capability requirement and the corresponding
                  documentation requirement and to allow revised
                  submissions by all offerors, including revised pricing.

Administrative Record (“AR”) 1813 (emphasis added).

       As the events played out, two passed-over offerors, CapRelo and TRC, did file new
bid protests at the GAO aimed only at challenging the fourth contract award to Brookfield.
As planned in the settlement agreement provisions quoted above, the FBI and Brookfield
filed motions for summary dismissal at the GAO. AR 2031-33, 2034-43, 2051-53; WHR
Group, 115 Fed. Cl. at 392. The GAO dismissed TRC’s protest because TRC was the
seventh offeror in line for award, and was not an interested party. AR 2065-66. However,
the GAO declined to dismiss CapRelo’s protest because, as the fourth-lowest offeror,
CapRelo was an interested party to challenge the Brookfield award. AR 2049.

        At this point, pursuant to paragraph (e) of the settlement agreement with Brookfield,
the FBI announced on July 12, 2013 that it would take new “corrective action” to resolve
the CapRelo protest. In transmittals to the four BPA awardees, the contracting officer
stated that each of the BPAs would be canceled, and the FBI would start over with a new
solicitation. AR 2068-69. There was no rational reason to disturb the three awards to
Allegiance, Lexicon, or WHR, because the FBI’s needs for the relocation services still
existed, and CapRelo had not even challenged these three awards in its bid protest. The
cancellation of all the BPAs went far beyond the permissible corrective action under the
law.

       An agency’s corrective action must be rationally related to some procurement
defect. Sys. Application & Technologies, Inc. v. United States, 100 Fed. Cl. 687, 720-21
(2011); Sheridan Corp. v. United States, 94 Fed. Cl. 663, 669-70 (2010). Here, the Court
cannot see a rational reason for any of the FBI’s actions in making an award to Brookfield,
or in later wanting to cancel all four BPA’s to resolve CapRelo’s protest. As noted,
CapRelo did not even challenge the awards to Allegiance, Lexicon, or WHR. The fact that
the FBI had laid out such a plan in its settlement agreement with Brookfield does not
legitimize the Allegiance, Lexicon, and WHR cancellations. It is settled law in GAO bid
protests that “[t]he existence of a settlement agreement does not permit the contracting
agency to act in ways not otherwise permitted by applicable statutes and regulations.”
Earth Property Servs., Inc., B-237742, 90-1 CPD ¶ 273 at *4 (Comp. Gen. Mar. 14, 1990),




                                             6
aff’d B-237742.2, 90-1 CPD ¶ 546 (Comp. Gen. June 11, 1990); see also Coulson Aviation
(USA), Inc. et al., B-409356.2 et al., 2014 CPD ¶ 106 at *17 (Comp. Gen. Mar. 31, 2014).

        The record reflects that Brookfield was able to negotiate a favorable deal with the
FBI in which it would either receive a fourth contract award as the sixth-priced offeror, or
it would at least obtain an opportunity to rebid the procurement at the expense of the three
unchallenged awardees, Allegiance, Lexicon, and WHR. The fact that the FBI agreed in
the settlement to make some changes to the solicitation only if further bid protests were not
summarily dismissed shows that the changes were just “window dressing” to make the
cancellations of the three unchallenged contracts seem legitimate. Indeed, accepting that
the FBI wanted to resolve the original Brookfield bid protest, it could have done so just by
awarding a fourth contract to Brookfield without the need for any settlement agreement.
The chances of the passed-over offerors filing further bid protests were so high that
Brookfield’s fall-back position was to at least insure a rebid to be able to compete again.
The settlement agreement in itself amounted to impermissible favoritism of a single offeror
that was not even in line for award.

        In a rebid scenario, Allegiance, Lexicon, and WHR would be prejudiced by having
to compete again for contracts they had already won in a fair competition, but now with
their prices disclosed. WHR Group, 115 Fed. Cl. at 403-04; Sheridan, 94 Fed. Cl. at 669-
70. In such a setting, these three winning offerors likely would have to “bid against
themselves” by lowering their prices to keep the contracts they had previously won. The
FBI’s settlement with Brookfield truly was a “sweetheart deal” that would direct an
undeserved contract to it, or at least allow Brookfield a do-over to the extreme prejudice of
Allegiance, Lexicon, and WHR. Although an agency has wide discretion to implement
corrective action, there is no law, regulation, or case precedent that would allow an agency
to venture far beyond the limits of permissible corrective action and to cancel contracts that
were not even challenged in a bid protest.

       Judge Block concluded his opinion on the merits of WHR’s protest with the
following observation:

                      It is also worth adding as a final point that if the FBI’s
              “corrective action” in this case were not enjoined, it would
              signify that the government’s power to take “corrective action”
              is nigh unlimited. The requirement that corrective action be
              “targeted” or “rationally related” to an existing defect in the
              initial procurement is essential to the integrity of the
              procurement system. In this case it is clear that the “corrective
              action” was not targeted or rationally related to any actual

                                              7
              defect and it is therefore crucial to the public interest that the
              FBI’s “corrective action” be enjoined.

WHR Group, 115 Fed. Cl. at 405. The Government has fallen well short of its burden of
proof, and has not offered any convincing arguments to show that its position was
substantially justified.

       5. Special Circumstances

       Neither party contends that there are any special circumstances to be considered in
assessing WHR’s claim for attorneys’ fees and expenses. Therefore, this category of the
five EAJA conditions need not be considered.

                               Amount of WHR’s Recovery

        The EAJA allows recovery of attorneys’ fees and expenses, subject to certain
limitations, including a cap on the hourly rate for fees. A statutory $125 per hour cap
applies to attorneys’ fees claims, “unless the court determines that an increase in the cost
of living or a special factor, such as a limited availability of qualified attorneys for the
proceedings involved, justifies a higher fee.” 28 U.S.C. § 2412 (d)(2)(A)(ii). Cost of living
adjustments to the statutory cap should be freely granted. United Partition Sys., 95 Fed.
Cl. at 58; see also Baker v. Brown, 839 F.2d 1075, 1084 (5th Cir. 1988) (stating that absent
“unusual circumstances,” an award of EAJA attorneys’ fees should include a cost of living
adjustment); Payne v. Sullivan, 977 F.2d 900, 903 n.2 (4th Cir. 1992) (acknowledging that
many circuits “regard the cost of living adjustment as ‘essentially perfunctory or even
mandatory.’”) (citation omitted).

        WHR is seeking a cost of living adjustment to the statutory cap for attorneys’ fees.
The $125 hourly cap was established 19 years ago, in March 1996. WHR’s cost of living
adjustment is based on Consumer Price Index (“CPI”) data between March 1996 and the
date on which the legal services were rendered. Where the legal services span a number
of months, as here, our Court has used the “mid-point” method to perform a CPI
calculation. United Partition Sys., 95 Fed. Cl. at 58; Chiu v. United States, 948 F.2d 711,
722 n.10 (Fed. Cir. 1991); Geo-Seis Helicopters, Inc. v. United States, 79 Fed. Cl. 74, 79
(2007); Cal. Marine Cleaning, Inc. v. United States, 43 Fed. Cl. 724, 734 (1999). Under
the “mid-point” method, the Court determines the “month that lies at the mid-point between
the first and last month for which attorneys’ fees are being awarded,” and uses the CPI for
that “mid-point” month as the basis for the cost of living adjustment to the statutory cap.




                                              8
DGR Assocs., Inc. v. United States, 97 Fed. Cl. 214, 221 (2011), rev’d on other grounds,
690 F.3d 1335 (Fed. Cir. 2012).

       WHR is claiming attorneys’ fees for the period June 2013 through June 2014. The
mid-point in that period is December 2013. To calculate the cost of living adjustment for
March 1996 through December 2013, the statutory cap of $125 is multiplied by the CPI in
December 2013 (233.049) and divided by the CPI in March 1996 (155.7). This calculation
results in an inflation adjusted hourly rate of $187.10. Defendant does not oppose this
hourly rate.

       WHR’s total claim for attorneys’ fees and expenses is $110,657.59. This amount is
comprised of 565 attorney hours at a rate of $187.10 per hour ($105,711.50), 12.4 hours of
paralegal and summer associate time at $145 per hour ($1,798.00), and out-of-pocket
expenses of $3,148.09. The Government challenges only a portion of these fees and costs
which were incurred between the time this case was ripe for decision (September 20, 2013)
and the time the Court’s decision was issued (March 21, 2014). The Government asserts
that WHR’s attorneys continued to bill time to this protest after the matter had been fully
briefed. The Government states that the time entries either were for unnecessary work, or
for work related to other litigation.

       WHR explains that the legal services spent between September 20, 2013 and March
21, 2014 (29.6 hours) predominantly were undertaken in responding to Defendant’s notices
to the Court of the FBI’s intention to continue issuing noncompetitive extensions of the
Brookfield task order, for months at a time, rather than obtaining relocation services
through WHR’s validly awarded BPA. See Notices, Oct. 18, 2013 (Dkt. 106), Nov. 25,
2013 (Dkt. 107), Feb. 21, 2014 (Dkt. 108) (announcing FBI’s intent to extend Brookfield’s
task order for additional months). Judge Block found these sole-source extensions
unlawful. WHR Group, 115 Fed. Cl. at 405. The Court observed that “any continued
extensions of Brookfield’s non-competitive task order or utilization of that task order is
unlawful given the option of the plaintiffs’ competitively-awarded BPAs.” Id. The 29.6
hours at $187.10 per hour is only $5,538 (approximately 5 percent) of the total attorneys’




                                            9
fees requested, and the Court finds the amount reasonable under the circumstances
presented.3 There is no evidence of any claimed hours being spent on other litigation.

                                             Conclusion

       Based upon the foregoing, the Court awards EAJA attorneys’ fees and expenses to
WHR in the amount of $110,657.59. The clerk is directed to enter judgment in WHR’s
favor in this amount.

        On or before June 30, 2015, the parties shall carefully review this opinion for
competition-sensitive, proprietary, confidential or other protected information, and submit
to the Court proposed redactions to this opinion, if any, before it is released for publication.
The parties are requested to minimize their requested redactions so that the Court may
publish as much of the decision as possible.

        IT IS SO ORDERED.

                                                        s/Thomas C. Wheeler
                                                        THOMAS C. WHEELER
                                                        Judge




3
  The Government is incorrect in stating that the fees in question for September 20, 2013 through March
21, 2014 are $19,939.83. Def.’s Resp. Br. at 16-17.

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