1 Board of Contract Appeals General Services Administration Washington, D.C. 20405 _______________________________ GRANTED IN PART: March 18, 1998 _______________________________ GSBCA 14409-C(14090) TEEMS, INC., Applicant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Toni L. DeGasperin of Jones & Donovan, Irvine, CA, counsel for Applicant. Robert T. Hoff, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges BORWICK, VERGILIO, and GOODMAN. VERGILIO, Board Judge. The Board received this application on November 21, 1997, from Teems, Inc. seeking recovery under the Equal Access to Justice Act (EAJA). Teems had prevailed, in part, in the underlying appeal seeking an equitable adjustment and reimbursement under a termination for convenience settlement proposal. The agency's position was substantially justified on some of the issues on appeal. While Teems does not recover fees and expenses incurred relating solely to those issues, it does recover fees and expenses incurred in pursuing issues for which the agency lacked substantial justification. The Board grants in part the application and awards $9,037.88. Findings of Fact 1. In a decision issued on October 31, 1997, the Board granted in part the appeal of Teems, finding entitlement to a portion of the amount sought as an equitable adjustment and under a termination settlement proposal. Teems, Inc. v. General Services Administration, GSBCA 14090, 98-1 BCA 29,357. That decision is final. 2. On November 24, 1997, the Board received from Teems its application to recover costs pursuant to the Equal Access to Justice Act, 5 U.S.C. 504 (Supp. II 1996). Teems sought $18,197.48. 3. When Teems filed the underlying appeal, its net worth was less than $7 million (it was approximately $53,500) and it had fewer than 500 employees (it had three). Application, Exhibit A. 4. In its answer to the application, the agency requested "the Board to grant EAJA fees and costs to [applicant] in the net amount of $10,116.78, without interest." It calculated the dollar figure as follows: Teems submitted a claim for $89,606. The contracting officer allowed $20,663.88; the Board awarded an additional $15,603.57. Teems recovered at total of $36,267.45 ($20,663.88 + $15,603.57). This represents 40.47% of the amount sought ($36,267.45 $89,606). The agency then multiples the percentage by the amount sought in the application (40.47% x $18,197.48). 5. In response to the agency's answer, Teems revised its application. It deleted from its request for reimbursement $800 for attorney and consultant efforts associated with issues on which Teems failed to recover in the underlying appeal. Additionally, Teems sought an additional $27.90 for costs incurred in copying and mailing the response. Teems seeks $17,425.38. This amount reflects attorney fees of $16,775--134.2 hours of attorney time at $125 per hour (which is less than the billed rates)--plus allowable, incurred expenses of $650.38. Discussion Teems was a corporation with a net worth (less than $7 million) and of a size (fewer than 500 employees) which qualifies it as a party to recover under the EAJA. 5 U.S.C. 504(b)(1)(B). The EAJA directs that the Board shall award to Teems "fees and other expenses incurred by that party in connection with that proceeding, unless the [Board] finds that the position of the agency was substantially justified or that special circumstances make an award unjust." 5 U.S.C. 504(a)(1). The agency requests that the Board not award the full amount requested. It contends that the recovery by Teems in the underlying appeal of less than half the amount sought "is indicative of substantial justification of some, but not all, claim items." Teems maintains that the agency's position was not substantially justified. Teems asserts that it prevailed on the most complex and time-consuming issue: the number of recoverable labor hours. Teems alludes to language in the Board's discussion, "agency's determinations to reduce the claimed hours lack reasonable support in the record," Teems, 98-1 BCA at 145,961, in support of its conclusion that the agency's position was not substantially justified on related issues. However, recovery relating to labor hours required a showing of the reasonableness of labor hours and hourly rates. Regarding the latter, the Board found that the administrative contracting officer "justifiably concluded that Teems had not supported its labor costs, given variations in alleged salaries and hourly rates, and payroll records failing to support payments of salaries (as contrasted with profit distributions), and proceeded to make an award recognizing an entitlement to reimbursement." Id. at 145,957 ( 39). The record reveals that the agency had substantial justification for its position for the fully denied issues of the claim and for the issues regarding hourly rates of the employees. For the remainder of the issues, the agency lacked substantial justification for its factual and legal positions. Although precision is not possible, the records in the underlying appeal and in this application permit the Board to conclude that fifty percent of the efforts for which compensation 3 is now sought were reasonably expended on matters for which the agency lacked substantial justification. Accordingly, the applicant is entitled to recover $8,387.50, for attorney time. The records enable the Board to conclude that the full amount of expenses, $650.38, were reasonably incurred and recoverable. The applicant did not incur appreciable expenses solely on unsuccessful issues or issues for which the agency's position was substantially justified. Decision The Board GRANTS IN PART the application. Teems is entitled to recover a total of $9,037.88. _______________________ JOSEPH A. VERGILIO Board Judge We concur: _____________________ _____________________ ANTHONY S. BORWICK ALLAN H. GOODMAN Board Judge Board Judge