CBCA 6612-C(5387)

GRANTED IN PART: January 29, 2020 CBCA 6612-C(5387) VET4U, LLC, Applicant, v. DEPARTMENT OF VETERANS AFFAIRS, Respondent. Michael T. Stanczyk of Lynn D’Elia Temes & Stanczyk LLC, Syracuse, NY, counsel for Applicant. Harold W. Askins III, Office of Regional Counsel, Department of Veterans Affairs, Charleston, SC, counsel for Respondent. Before Board Judges DRUMMOND, LESTER, and O’ROURKE. O’ROURKE, Board Judge. Applicant filed a timely request for attorney fees and costs under the Equal Access to Justice Act (EAJA) after the Board partially granted its appeal. See Vet4U, LLC v. Department of veterans Affairs, CBCA 5387, 19-1 BCA ¶ 37,336. During the appeal process, applicant incurred costly legal bills, which it now seeks to recover in this action. Respondent opposes any award of legal fees under EAJA, contending that it was substantially justified in denying applicant’s claims. We disagree and grant the request in part. CBCA 6612-C(5387) 2 Background Facts The Contract, the Appeal, and the Board’s Decision Respondent, the Department of Veterans Affairs (VA or agency) awarded applicant, Vet4U, a firm, fixed-price contract to transform the crawl space under a sixty-year-old, multi- level VA hospital into a fully functional hospital floor. This required Vet4U to perform a wide variety of construction services, including asbestos abatement, dirt and rock excavation, engineering services, and electrical, plumbing, and concrete work. The VA paid Vet4U approximately $4.1 million for the project, which Vet4U completed one year prior to the required deadline, but eighteen months after the construction time line in its contract bid. During performance, Vet4U incurred additional costs over and above the contract award amount and sought to recover those costs ($296,853) through the claims process. Vet4U’s claim to the agency consisted of twenty-three individual claims, which the VA denied in their entirety. Vet4U appealed to the Board and requested a decision on the record. On May 14, 2019, we granted Vet4U’s claim in the amount of $46,052. We dismissed the portion of the appeal related to legal fees ($6300) as premature. Vet4U LLC, 19-1 BCA at 181,584. With no appeal to the Court of Appeals for the Federal Circuit, the Board’s decision became final 120 days later, on September 12, 2019. Vet4U’s EAJA Application and the VA’s Response On September 25, 2019, Vet4U filed its application for attorney fees (at market rates) in the amount of $47,212.50 and expenses totaling $930.11. Alternatively, if market rates could not be recovered, Vet4U requested $32,642.38 in attorney fees, plus expenses of $930.11. In support of its EAJA application, Vet4U stated that “[it] experienced continuous difficulties throughout the life of the project,” and, as a result, incurred unforeseeable costs that could not be addressed informally by the parties due to personnel changes within the VA and strained relationships between the parties. Vet4U also stated that because it completed work that was outside the scope of the contract—work that was duly approved or mandated by the VA—the VA’s position on the same was not justified. Vet4U noted that it had extremely limited resources to contest the decision of the contracting officer, but had no other choice than to seek relief from the CBCA due to the agency’s unreasonable position during and after performance. In response, the VA did not dispute Vet4U’s status as a prevailing party in the underlying litigation, nor as a qualifying corporation for purposes of EAJA, but argued against the award of any attorney fees. It maintained that it was substantially justified in denying Vet4U’s claims, as evidenced by the fact that the Board denied nineteen of the twenty-three claims on appeal. The VA clarified, however, that in the event the Board finds CBCA 6612-C(5387) 3 merit in Vet4U’s EAJA application, it suggested that a reasonable award for attorney fees and costs in this case would be $1847. Discussion Vet4U’s application for costs, fees, and interest was filed pursuant to the Equal Access to Justice Act (EAJA), 5 U.S.C.