Board of Contract Appeals General Services Administration Washington, D.C. 20405 ________________________________________________ RESPONDENT'S MOTION TO DISQUALIFY APPELLANT'S COUNSEL DENIED: June 29, 1998 __________________________________________________ GSBCA 14442-TD HOSPITAL HEALTHCARE SYSTEMS, INC., Appellant, v. DEPARTMENT OF THE TREASURY, Respondent. James P. Rome, Wilmette, IL, counsel for Appellant. Michael Salyards, General Legal Services, Internal Revenue Service, Department of Treasury, Dallas, TX, counsel for Respondent. BORWICK, Board Judge. This appeal involves a dispute in connection with a termination for convenience of a contract for laser printer labels. Respondent moves to disqualify appellant's counsel (Mr. Rome) in this appeal because appellant's counsel served as a consultant to appellant in the pre-award and contract administration stages of the contrac. His representation of appellant in this case, according to respondent, would violate ethical standards prohibiting an advocate from serving as a witness or potential witness in the litigation. For the reasons below, we deny the motion. To understand the position of the parties, some brief background is necessary. The contracting officer denied as unallowable certain costs presented by appellant in its termination for convenience settlement proposal. One cost item was the fee for Mr. Rome's consultant services before award of the contract; the other item was the cost of certain machinery retooling. Respondent explains that the contracting officer denied the fee for consultancy services because the services were billed on an unallowable contingent fee basis under section 31- 205.33 of the Federal Acquisition Regulation (FAR).[foot #] 1 Respondent maintains that the scope of the services provided by the consultant is also at issue. Respondent maintains that since Mr. Rome was a negotiator for appellant after contract award, his testimony might be necessary on the retooling issue to determine whether the retooling resulted from an allegedly defective sample or defective specifications. Respondent' s Motion to Disqualify at 2-3. Appellant argues that it has no intention of calling its attorney as a witness to give substantive testimony; it would call Mr. Rome simply to authenticate the retainer agreement for Mr. Rome's consultant services: The cost elements of appellant's claim are supported by written documentation, mainly from third parties. The only such documentation about which Rome could be called to testify is the agreement for consultative services. As the document speaks for itself, Rome's testimony, if called for, would only be to corroborate the authenticity of the writing. Appellant Reply to Respondent's Disqualification Motion at 3. Appellant questions the need for respondent to call Mr. Rome as a witness. Appellant argues in its supplemental opposition: If Respondent desired, or now desires to make inquiry into the consultative agreement, or for that matter, the other major incurred cost it denied, the special tooling purchased by appellant, then the party best able to respond is appellant, not Rome. Appellant's Supplemental Response to Respondent's Motion for Disqualification. In deciding such matters, we apply the law of the jurisdiction where the practitioner conducts business; in this case the State of Illinois. Rule 118(a); B.G.W. Limited Partnership, GSBCA 10501, 91-3 BCA 24,336, at 121,584. Illinois Rule of Professional Conduct (RPC) 3.7 provides: (a) A lawyer shall not accept or continue employment in contemplated or pending litigation if the lawyer knows or reasonably should know that the lawyer may be called ----------- FOOTNOTE BEGINS --------- [foot #] 1 That provision states that costs of consultant services are allowable "when reasonable in relation to the services rendered and when not contingent upon recovery of the costs from the Government." 48 CFR 31.205-33 (1997) (FAR 31.205- 33). ----------- FOOTNOTE ENDS ----------- as a witness on behalf of the client, except that the lawyer may undertake the employment and may testify: (1) if the testimony will relate to an uncontested matter; (2) if the testimony will related to a matter of formality and the lawyer reasonably believes that no substantial evidence will be offered in opposition to the testimony; (3) if the testimony will relate to the nature and value of legal services rendered in the case by the lawyer or the firm to the client; or (4) as to any other matter, if refusal to accept or continue the employment would work a substantial hardship on the client. (b) If a lawyer knows or reasonably should know that the lawyer may be called as a witness other than on behalf of the client, the lawyer may accept or continue the representation until the lawyer knows or reasonably should know that the lawyer's testimony is or may be prejudicial to the client. Ill. Ann. Stat. RPC 3.7 (Smith-Hurd 1993). Appellant states that it does not expect to call Mr. Rome, except to authenticate the consultancy agreement, thus it satisfies the test of RPC 3.7(a)(2). We agree with appellant that the contingency issue can be determined by reference to the retainer agreement itself; supplemental testimony from Mr. Rome is not necessary to construe it. While the extent of the services provided is relevant to determine whether the consultancy cost is allowable under FAR 31.205-33, appellant can, and intends to, address this issue through witnesses other than Mr. Rome. Appellant can also address the retooling issue through other witnesses. Respondent has stated it may call Mr. Rome to address these issues. Thus, Mr. Rome may be called as a witness by respondent, or--in the phraseology of RPC 3.7(b)--as a witness "other than on behalf of the client." Under that circumstance, an attorney may continue representing the client unless the lawyer's testimony is or may be prejudicial to the client. Respondent has not met its burden as the moving party of showing that Mr. Rome's testimony developed by respondent is or may be prejudicial to appellant. The case of People v. Hill, 371 N.E. 2d 1257 (Ill App. 1978), relied upon by respondent, is not on point. There, the defense counsel in a criminal case asked an informer a question that placed counsel in the position of being an impeaching witness for his client. The trial judge sustained the prosecution objection and the appellate court held sustained the trial judge's ruling. Here, in contrast, appellant has stated that it will not call Mr. Rome to testify except for purposes allowed by RPC 3.7(a)(2). This case is similar to Park-N-Shop, Ltd. v. City of Highwood, 864 F. Supp. 82, 83 (N.D. Ill. 1994), where the court, construing its analogous Rule 3.7, denied attorney disqualification when there were other witnesses to testify about the issue in the case and it had not been demonstrated that the attorney's testimony was necessary. It is also similar to Weil, Freiburg & Thomas v. Sara Lee Corp., 577 N.E. 2d 1344, 1354 (Ct. App. Ill. 1991), where attorney disqualification was denied because there was no showing that if the attorney were called as a witness for the other side, that the attorney's testimony would be prejudicial to the client. Decision Respondent's motion to disqualify counsel is DENIED. Within ten calendar days from the date of this order, counsel will submit to the Board their joint suggestions as to time and place of the hearing in this appeal. __________________________ ANTHONY S. BORWICK Board Judge