             ARMED SERVICES BOARD OF CONTRACT APPEALS

Application Under the Equal Access          )
 to Justice Act of --                       )
                                            )
Optimum Services, Inc.                      )      ASBCA Nos. 58755, 59952
                                            )
Under Contract No. W912EP-09-C-0033         )

APPEARANCE FOR THE APPELLANT:                      Joseph W. Lawrence, II, Esq.
                                                    Vezina, Lawrence & Piscitelli, P.A.
                                                    Fort Lauderdale, FL

APPEARANCES FOR THE GOVERNMENT:                    Thomas H. Gourlay, Jr., Esq.
                                                    Engineer Chief Trial Attorney
                                                   Charles T. Pino, Esq.
                                                   Joshua R. Holmes, Esq.
                                                    Engineer Trial Attorneys
                                                    U.S. Army Engineer District, Jacksonville

             OPINION BY ADMINISTRATIVE JUDGE DICKINSON
               ON APPELLANT'S APPLICATION UNDER THE
                    EQUAL ACCESS TO JUSTICE ACT

       Appellant, Optimum Services, Inc. (OSI), has applied pursuant to the Equal
Access to Justice Act (EAJA), 5 U.S.C. § 504, for fees and other expenses incurred in
connection with the subject appeals. The appeals arose from a sponsored
subcontractor claim for $1.87 million and a 93-day time extension for differing site
conditions adversely impacting the dredging portion of a contract with the Jacksonville
District Corps of Engineers (the government or the Corps) to restore the benthic
substrate and hydro logic process of Rose Bay in Volusia County, Florida. See
Optimum Servs., Inc., ASBCA No. 58755, 15-1BCA~35,939; Optimum Servs., Inc.,
ASBCA No. 59952, 16-1 BCA ~ 36,490. We assume familiarity with those decisions.

      OSI filed its EAJA application on 28 November 2016. OSI initially sought
recovery of fees and other expenses in the following categories and amounts:

                                                                 Amount
                 Category of Fees, Other Expenses               Requested
          Attorneys' Fees
          Joseph W. Lawrence, II (14.2 hrs at $425/hr)         $ 6,035.00
          Joseph W. Lawrence, II (546.2 hrs at $475/hr)        $ 259,445.00
          Paul Washington (2 hrs at $190/hr)                   $     380.00
          Robert L. Frye ( 1.6 hrs at $330/hr)                 $     528.00
Robert L. Frye (2.6 hrs at $350/hr)                   $     910.00
Steven K. Johnson (16.5 hrs at $250/hr)               $ 4,125.00
Steven K. Johnson (646.4 hrs at $275/hr)              $ 177,760.00
Kristina Diaz (4.2 hrs at $21 O/hr)                   $     882.00
                         Subtotal (Attorneys' fees)   $ 450,065.00

Legal Assistant Fees
A.M. Lucas (0.8 hrs at $120/hr)                       $      96.00
Koly Cuebas (3.9 hrs at $85/hr)                       $     331.50
Jacklyn Frometa (60.6 hrs at $80/hr)                  $   4,848.00
Enidelz Alvarado (52.6 hrs at $65/hr)                 $   3,419.00
                      Subtotal (Legal Assistants)     $   8,694.50

Miscellaneous Attorney Expenses
Copy Costs for copies of documents made in
preparation for the entitlement, quantum hearings     $ 14,172.71
Attorney Travel Costs                                 $ 4,793.64
Costs/Charges for Hearing Transcripts                 $    557.50
Telephone Bills/Conference Calls                      $    256.50
Courier/Postage                                       $ 1,018.65
Trial Exhibit Preparation                             $    328.50
     Subtotal (Miscellaneous Attorney Expenses)       $ 21,127.50

Expert Witness Fees
William Humphreys                                     $ 135,468.50
Luis A. Prieto-Portar                                 $ 86,977.50
Vincent Encomio                                       $ 1,673.00
                  Subtotal (Expert Witness Fees)      $ 224, 119.00

Expert Witness Travel Expenses
William Humphreys                                     $   5,519.66
Luis A. Prieto-Portar                                 $   1,737.11
Vincent Encomio                                       $     641.22
      Subtotal (Expert Witness Travel Expenses)       $   7,897.99

Mr. Humphreys' Mailing and Courier Expenses
William Humphreys                                     $    791.88
        Subtotal (Mailing and Courier Expenses)       $    791.88


                                 2
             Fact Witness Expenses
             William Ryan                                         $   1,652.50
             Juan Garland                                         $   2,232.70
             Matt Conneen                                         $     561.44
             Marc Barnell                                         $     421.84
             Donald (Sonny) Buchanan                              $      22.00
                            Subtotal (Fact Witness Expenses)      $   4,890.48
                                                    TOTAL         $ 717,586.35

(See, e.g., appellant's application and brief in support (app. br.); Bd. order <ltd. 7 December
2016; Bd. corr. ltr. <ltd. 10 February 2017)

        By order dated 7 December 2016, the Board noted that the liquidation agreement
between OSI and its subcontractor, Ryan Incorporated Southern (Ryan), provides that the
parties "will bear attorneys' fees and costs of pursuing this recovery on a pro rata basis in
proportion to each party's claim to the total of all claims made." The Board directed OSI
to clarify whether Ryan independently would have met the eligibility requirements for
fees and expenses under the EAJA and, if so, provide supporting evidence or declaration.

        The government responded to OSI's EAJA application on 27 January 2017. In its
response, the government conceded, or at least indicated that it does not dispute, that: OSI
timely filed its application (gov't resp. at 3 ); OSI is a prevailing party in these appeals
(id.); OSI is an eligible party under the EAJA (id.); and the government's position was not
substantially justified (id. at 5). For the most part, the government does not contest the
quantum of hours or the other expenses in OSI's application (see id. at 6-8, 12-16). The
government contested 25.3 hours of attorney's fees and other expenses as having been
incurred prior to claim submission (id. at 7, 12, 20-21 ); argued that the hourly rate for
attorney's fees should be capped at the statutory rate of $125/hour, resulting in a total fee
amount of$151,050 (id. at 8-12); asserted that travel expenses for attorneys and expert
witnesses should be reimbursed at government rates (id. at 12-13, 16); and rejected
entirely OSI's request for compensation for its fact witnesses (id. at 16-19). 1 As to its
position regarding OSl's hourly rates for expert witness compensation, the government
was vague, providing the rate for one of its own experts and asking the Board to "exercise
its discretion in fashioning an adjustment addressing" expert witness fees (id. at 15-16).
The government noted in its response that Ryan would have to demonstrate that it



1
    The government also objected to certain "copy costs" that it alleged to be duplicative
         (see gov't br. at 3, 12-13, 19-21). The Board understands that this "double
         counting" resulted from a mathematical error, in which OSI's copy costs were
         listed by the government on page 3 of its response under both the "Attorney
         Expenses" and "Copy Costs" categories (see gov't br. at 3; app. reply br. at 11-12,
         19-20). Accordingly, we give no consideration to this erroneous amount.
                                              3
independently satisfies the eligibility requirements of the EAJA (id. at 4-5). The
government submitted that an EAJA award to OSI should be structured as follows:

                                                                      Amount
                  Category of Fees, Other Expenses
                                                                     Requested
          Attorneys' fees                                       $   151,050.00
          Attorney Expensesl 2l                                 $    12,271.15
          Legal Assistants                                      $     8,694.50
          Expert Witness Expensesl 3l                           $       791.88
          Fact Witnesses                                        $       434.35
          Copy Costs                                            $     7,877.97
          Costs/Charges for Hearing Transcripts                 $       557.50
          [Trial Exhibit Preparation]                                  [Silent]
          Expert Fees to be determined at the Board's
          discretionC 4l                                                [TBD 5]
          [Expert Witness Travel ExpensesC 6 1                  $    [4,756.69]
                                                             TOTAL [TBD]

(See gov't resp. at 13, 21) The government's proposed EAJA award structure amounts
to $186,434.04 before adding in reasonable expert witness fees as determined by the
Board (id). Although not included in the proposed EAJA award structure, the
government did not contest OSI's request of $328.50 for trial exhibit preparation costs.

       On 10 February 2017, OSI responded to the Board's order and filed its reply to
the government's response. Attached to OSI's 10 February 2017 reply was an
affidavit by William Ryan to prove that Ryan independently meets the EAJA size and
net worth standards (app. reply br., ex. A). In its reply, OSI conceded the issue of the
inception date and reduced the number of hours claimed, where pertinent, by 25 .3
hours (app. reply br. at 5). Likewise, OSI conceded $207 of copy costs and another

2
  OSI originally claimed $18,962.82 for Attorney Expenses which includes the following
       amounts which the government stipulates are appropriate: Attorney Travel
       ($3,748.19) (gov't resp. at 11-13); Courier/Postage ($1,698.71) (id. at 12); Telephone
       Bills/Conference Calls ($303.51) (id.); Copies ($6,691.67) (id. at 13); and "Westlaw
       Charges" ($6,373.74) (id.). However, because OSI noted in its reply that it did not
       claim "Westlaw Charges" (app. reply br. at 13 n.8), that amount is not included here.
3 This consists entirely of Mr. Humphrey's expenses ($791.88) (gov't resp. at 16), and

       does not include expert witness travel expenses.
4
  The government noted here the "Office of Personnel Management GS-15 hourly locality
       rates: 2013-$62.06; 2014-$62.68; 2015-$63.31; 2016-$63.94" (gov't resp. at 21).
5 'TBD" here means "to be determined."
6 Although not included in its proposed EAJA award structure, the government

       stipulated that $4,756.69 would be an appropriate amount (gov't resp. at 16).
                                            4                                   '
$94.04 of other miscellaneous attorney expenses that were incurred before the
inception date (id. at 13-14, 19). Taking into account the parties' respective
concessions, OSI revised its request as follows:

                                                          Amount
                  Category of Fees, Other Expenses
                                                         Requested
           Attorneys' Fees                             $ 439,312.00
           Legal Assistants                            $    8,694.50
           Copy Costs                                  $ 13,965.71
           Attorney Travel Costs                       $    4,793.64
           Costs/Charges for Hearing Transcripts       $      557.50
           Telephone Bills/Conference Calls            $      253.50
           Courier/Postage                             $      927.61
           Trial Exhibit Preparation                   $      328.50
           Expert Witness Fees                         $ 224,119.00
           Expert Witness Travel Expenses              $    7,897.99
           Mr. Humphreys' Mailing and Courier Expenses $      791.88
           Fact Witness Expenses                       $    4,890.48
                                                 TOTAL $ 706,532.31

(See app. reply hr. at 21; Bd. corr. ltr. dtd. 10 February 2017) In support of its revised
request, OSI renewed its arguments for enhanced fees for its attorneys (app. reply br.
at 5-11 ); expert witness fees (id. at 14-17); travel expenses at market rates, rather than
government rates (id. at 13-14, 17); and expenses for its fact witnesses (id. at 18-19).

       As a threshold matter, we conclude that OSI's EAJA application was timely,
and the government does not dispute that OSI has adequately demonstrated that it is
both eligible for and entitled to fees and other expenses. See, e.g., JF. Taylor, Inc.,
ASBCA Nos. 56105, 56322, 13 BCA ~ 35,297 at 173,272; Freedom NY, Inc., ASBCA
No. 55466, 09-1 BCA ~ 34,031 at 168,329. Furthermore, based on the parties'
stipulations, we conclude that the following amounts are not in dispute:




                                             5
                                                           Amount
                  Category of Fees, Other Expenses
                                                          Requested
            Attorneys' fees                             $ 151,050.00
            Legal Assistants                            $    8,694.50
            Copy CostsPl                                $ 13,965.71
            Attorney Travel Costs                       $    3,748.19
            Costs/Charges for Hearing Transcripts       $      557.50
            Telephone Bills/Conference Calls            $      253.50
            Courier/Postage                             $      927.61
            Trial Exhibit Preparation                   $      328.50
            Expert Witness Travel Expenses              $    4,756.69
            Mr. Humphreys' Mailing and Courier Expenses $      791.88
            Fact Witness Expenses                       $      434.35
                                   TOTAL (UNDISPUTED) $ 185,508.43

Accordingly, OSI is entitled to, at the very least, the undisputed amount of
$185,508.43. We tum now to the disputed portions ofOSl's request, which we
address seriatim: enhanced attorneys' fees; expert witness fees; travel expenses; and
expenses for fact witnesses.

Enhanced Attorneys' fees

       With respect to the question of fee enhancement, the EAJA provides that
"attomey ... fees shall not be awarded in excess of $125 per hour unless the agency determines
by regulation that an increase in the cost of living or a special factor, such as the limited
availability of qualified attorneys or agents for the proceedings involved, justifies a higher
fee." 5 U.S.C. § 504(b)(l)(A) (emphasis added). Our Board jurisprudence has long held that
the EAJA "does not confer on the ASBCA discretion to apply cost of living or special factor
increases without an agency determination so prescribing by regulation." Freedom, NY, Inc.,
ASBCA No. 43965, 09-1BCAii34,097 at 168,595; see also ABS Baumaschinenvertrieb,
GmbH, ASBCA No. 48207, 01-2 BCA ~ 31,549 at 155,826-27 (declining to enhance fees
where "the Department of Defense has not issued such a regulation authorizing enhancement
of fees based on cost of living or any other special factor"); Arapaho Commc 'ns, Inc./Steele
& Sons, Inc., Joint Venture, ASBCA No. 48235, 98-1 BCA ii 29,563 at 146,544 ("No such
regulation has been issued by the Department of Defense. We have no authority in this
instance to award more than [the statutory rate.]").



7   Undisputed copy costs ($13,965.71) are based on a comparison ofOSI's revised
         requested amount ($13,965.71) (app. reply br. at 19-20, 21) and the
         government's stipulated amounts ($14,569.64 = $6,691.67 (under attorney
         expenses)+ $7,877.97 (under copy costs)) (gov't resp. at 12-13, 19-21).
                                            6
       OSI asserts that there is an applicable Department of Defense (DoD) regulation that
confers such authority upon the Board: the DoD Financial Management Regulation
(FMR), DoD 7000.14-R, Volume 10, Chapter 12, which provides in relevant part:

                      B. Attorney fees and other expenses awarded to
              claimants under EAJA are payable from funds available to the
              DoD activity at the time of the award. Attorney fees payable
              under EAJA are limited to $125 (5 U.S.C. § 504) per hour
              unless the adjudicating officer (deciding official) ... determines
              that a higher rate may be allowed under the law.

DoD FMR, DoD 7000.14-R, vol. 10, ch. 12, ii 120203.B (emphasis added). We do not
find this language from the FMR to be particularly helpful to OSI's cause. It does not
confer upon an adjudicating officer any particular authority to enhance fees, nor does it
determine the circumstances or factors that an adjudicating officer should take into
account when considering whether to award enhanced fees. Indeed, according to the
FMR, the adjudicating official may enhance fees only when it determines that such
enhancement "may be allowed under the law." The law, however, prohibits such
enhancement by an agency unless "the agency determines by regulation" that such an
enhancement is warranted. 5 U.S.C. § 504(b)(l)(A).

       The FMR describes, in broad terms, the policy relating to paying parties
pursuant to EAJA; it does not authorize the Board to award attorneys' fees at more
than the statutory rate of $125 per hour. OSI has not brought to our attention any other
DoD regulation, nor are we aware of any, that would confer such authority upon us.
We conclude that we lack the authority to award OSI enhanced attorneys' fees.

Expert Witness Fees

       With regard to expert witness fees, the EAJA provides that "no expert witness
shall be compensated at a rate in excess of the highest rate of compensation for expert
witnesses paid by the agency involved." 5 U.S.C. § 504(b)(l)(A). In other words,
OSI's experts should not be paid more than the government's experts.

       The government urges us to apply the DF ARS 23 7 .104 "GS-15 limitation" on
recovery (see note 4, above) and cites to our decisions in Union Precision & Eng'g,
ASBCA No. 37549, 92-3 BCA ii 25,028, and Watsky Constr. Co., ASBCA No. 36940,
92-1BCAii24,694. These decisions rely upon DFARS 237.104(f)(i), which, in the
version current at the time of contract award, stated in pertinent part:

                     (f)(i) Payment to each expert or consultant for
              personal services under 5 U.S.C. 3109 shall not exceed the
              highest rate fixed by the Classification Act Schedules for
              grade GS-15 (see 5 CFR 304.105(a)).

                                             7
                    (ii) The contract may provide for the same per diem
             and travel expenses authorized for a Government
             employee, including actual transportation and per diem in
             lieu of subsistence for travel between home or place of
             business and official duty station.

The DFARS cap on the highest rate to be paid to expert witnesses is a cap on what the
government is permitted to pay its own expert witnesses. Where, as here, the government
has admitted that it paid its own experts in excess of the DFARS cap, OSI is entitled to be
compensated up to the same rate paid by the government. The government has furnished
us with the rates of one of its experts, Mr. Hudyma, which range between $200-$300 per
hour (gov't resp. at 15).

        We conclude that the rates proposed by OSI for its experts are generally reasonable
and, with one exception, fall below the maximum of $300 per hour that the government
paid to its expert, Mr. Hudyma (app. hr., ex. E). The only expert witness rate that exceeds
the government's $300 maximum fee rate was the maximal hourly rate of OSI's expert
Mr. Prieto-Portar, $365 per hour; he billed 56.75 hours at this maximal rate (id.).
Although OSI urges us to consider Mr. Hudyma's maximal fee merely to be an indicator
of the reasonableness of its own expert's maximal fee, we have been furnished with no
evidence that the government paid any of its other expert witnesses at a higher rate than
that of Mr. Hudyma. Accordingly, we cannot reimburse OSI for Mr. Prieto-Portar's fees
at a rate exceeding that of Mr. Hudyma's highest rate. Adjusting Mr. Prieto-Portar's fees
using the government's maximum $300 per hour rate results in a reduction of $3,688.75.
Applying this reduction to the amount requested by OSI, we conclude that OSI is entitled
to $220,430.25 in expert witness fees.

Travel Expenses

       The EAJA, with respect to other fees and expenses, provides that the amount
awarded "shall be based upon prevailing market rates for the kind and quality of the
services furnished." 5 U.S.C. § 504(b)(l)(A). The government proposes that the amount
requested by OSI for reimbursement of travel expenses - both for its attorneys and its
expert witnesses - be reduced to reflect government travel and per diem rates. The
government cites to no authority for its position. We have consistently awarded
reasonable travel expenses when the incurred costs are itemized and documented, as here.
See, e.g., Arapaho, 98-1 BCA ~ 29,563; Jay-Brant Gen. Contractors, ASBCA No. 51891,
01-1 BCA ~ 31,317. Accordingly, we conclude that OSI is entitled to $4,793.64 for its
attorney travel expenses, and $7,897.99 for its expert witness travel expenses.

Fact Witnesses

      The Board has long held that fees of lay witnesses are generally not reimbursable.
See Watsky Constr. Co., ASBCA No. 41541, 95-2 BCA ~ 27,889. However, certain

                                           8
payments to non-employees and consultants may be compensable under the EAJA. See BH
Servs., Inc., ASBCA No. 39460, 94-1 BCA ii 26,468. The evidence provided by OSI, which
the government does not dispute, indicates that Mr. Garland was not an employee of either
OSI or Ryan, but rather a paid consultant (app. br., ex. E). Mr. Garland's fees and expenses,
amounting to $2,232.70, are reasonable, and therefore reimbursable. Together with
conceded expenses of $434.35, we conclude that OSI is entitled to $2,667.05 for fact witness
fees and other expenses.

                                   CONCLUSION·

       For the forgoing reasons, Optimum is awarded reasonable attorneys' fees and
other expenses incurred in the course of these appeals, as follows:

                                                        Amount
                 Category of Fees, Other Expenses
                                                        Awarded
          Attorneys' Fees                             $ 151,050.00
          Legal Assistants                            $   8,694.50
          Copy Costs                                  $ 13,965.71
          Attorney Travel Costs                       $   4,793.64
          Costs/Charges for Hearing Transcripts       $     557.50
          Telephone Bills/Conference Calls            $     253.50
          Courier/Postage                             $     927.61
          Trial Exhibit Preparation                   $     328.50
          Expert Witness Fees                         $ 220,430.25
          Expert Witness Travel Expenses              $   7,897.99
          Mr. Humphreys' Mailing and Courier Expenses $     791.88
          Fact Witness Expenses                       $   2,667.05
                                                TOTAL $ 412,358.13

       Dated: 20 July 2017


                                                  DIANA S/DICKINSON
                                                  Adminis{rative Judge
                                                  Armed Services Board
                                                  of Contract Appeals

(Signatures continued)




                                           9
I concur                                          I concur




RICHARD SHACKLEFORD                               OWEN C. WILSON
Administrative Judge                              Administrative Judge
Acting Chairman                                   Acting Vice Chairman
Armed Services Board                              Armed Services Board
of Contract Appeals                               of Contract Appeals




      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 Nos. 58755, 59952, Appeals of
Optimum Services, Inc., rendered in accordance with 5 U.S.C. § 504.

       Dated:



                                                  JEFFREY D. GARDIN
                                                  Recorder, Armed Services
                                                  Board of Contract Appeals




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