As a government contracts attorney, there is nothing I enjoy more than winning a victory on behalf of a client–then having the government pick up the tab. It doesn’t happen all the time, of course. The general rule in the United States is that everyone pays his or her own attorneys’ fees. But a recent GAO decision highlights the fact that, under the right circumstances, a successful GAO protester is entitled to recover its attorneys’ fees.
The last time we saw our friends at Shaka, Inc., they were busy winning a GAO bid protest, in which the GAO held that the procuring agency had unfairly rejected the company’s bid. Following its win, Shaka submitted a claim for $22,275 in attorneys’ fees. The claim asked the agency to reimburse Shaka for $15,450 in attorneys fees it had paid, as well as reimbursing the company’s large subcontractor $6,825 for its own attorneys’ fees.
In my experience, $22,275 is not an unreasonable amount to expend in attorneys’ fees in a GAO bid protest. Nevertheless, the agency opposed the claim, stating that the fees were excessive and duplicative, and making other vague arguments that it shouldn’t have to pay Shaka’s fees. The agency also argued that it should not have to reimburse the subcontractor’s attorneys’ fees because the subcontractor was not a party to the protest.
In Shaka, Inc.–Claim for Costs, B-405552.2 (May 17, 2012), the GAO rejected the agency’s contentions. It held that Shaka’s counsel had presented adequately detailed invoices supporting the fees, and that the time the attorneys had invested in the protest was reasonable.
In addition, the GAO disagreed with the agency regarding the subcontractor’s fees. It held that the subcontractor and Shaka had worked in concert on the protest and had a fee-splitting agreement in place to cover their costs. Under these circumstances, the GAO found that the subcontractor should be reimbursed its portion of the attorneys’ fees billed on the joint (and successful) effort.
The Shaka decision does not stand for the principle that a successful GAO protester will always recover its attorneys’ fees. Most notably, the GAO will not allow a protester to recover fees when the agency takes corrective action (essentially, throws in the towel) rather than producing an agency report defending the protest. Other exceptions also exist to the right to recover.
However, Shaka’s situation does demonstrate that, under the right circumstances, a successful GAO protester will be able to both win its case and be reimbursed for the costs of its legal representation. In this case, Shaka not only won its protest, but recovered more than $22,000 it and its subcontractor had expended. If Shaka’s attorney is anything like me, knowing that the government picked up his client’s tab made this win especially sweet.