Thursday, August 10, 2017

Contractor Asks For $706 Thousand EAJA Reimbursement - Receives $412 Thousand

The Equal Access to Justice Act (EAJA) awards attorneys' fees and litigation expenses to eligible individuals (and contractors) who are parties to litigation against the Government. There are several qualifications a party must meet to be termed "eligible". They must have a net worth of less than $2 million (or less than $7 million and less than 500 employees). They must be the prevailing party in the litigation. And, the Government's position was not substantially justified (see The Equal Access to Justice Act - Briefly for more details). The EAJA is a significant benefit to Government contractors who, for lack of resources, might not be able to pursue valid and legitimate claims against the Government.

A recent ASBCA decision illustrates how the amount of the award is determined. Optimum Services, Inc. (OSI) was the prevailing party in a dispute with the Army Corps of Engineers involving differing site conditions. The case was decided for OSI and afterwards, OSI applied for EAJA fees and other expenses. The Government agreed that EAJA fees were due. The Government acknowledged that OSI was the prevailing party and did not dispute OSI contention that its position was not substantially justified.

OSI submitted an itemized listing of EAJA expenses including attorney fees, legal assistant fees, reproduction, travel costs, transcripts, telephone, courier, postage, trial exhibits, expert witness fees, expert witness travel expenses, and fact witness expenses. Together these expenses totaled $717 thousand (later revised downward to $706 thousand).

The ASBCA decision details how the Board considered each of the claimed expenses and ultimately it determined an amount due of $412 thousand. The primary reason for the reduction related to the statutory limit on attorney fees of $125 per hour. While OSI claimed attorney fees in excess of $400 per hour, it was only reimbursed $125 per hour.

While the EAJA helps recover litigation expenses, it won't cover everything as illustrated by this case. Here, the contractor still had to absorb $300 thousand and prospects that large could have a deterrent effect on small businesses pursuing claims against the Government. Alternatively, they could look for legal representation charging $125 an hour but good luck finding those.

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