Dellew Corporation v. United States, 127 Fed. Cl. 85

Background

Dellew Corporation filed a post-award bid protest challenging the Army’s award of a logistics support contract to Tech Systems, Inc. (TSI), alleging (inter alia) disagreement over whether TSI agreed to cap its G&A rate and failures in cost‑realism analysis.
The Court heard cross-motions for judgment on the administrative record and held oral argument on October 22, 2015; during argument the judge made extensive critical comments favoring Dellew’s position and suggested the Army take corrective action.
Less than a month later the Government notified the Court the Army would take corrective action; the case was dismissed as moot and judgment entered on December 17, 2015.
Dellew moved for attorney’s fees and costs under the Equal Access to Justice Act (EAJA). The Government contested prevailing‑party status, substantial justification, and several time entries in the fee request.
The Court found Dellew met EAJA procedural and eligibility requirements (timeliness, net worth, employee count), held Dellew was a prevailing party because the Court’s oral rulings carried sufficient judicial imprimatur to materially alter the parties’ legal relationship, and concluded the Government’s position was not substantially justified.
The Court awarded EAJA attorneys’ fees (adjusted for CPI to $190.94/hr) totaling $76,713.60 and reimbursable expenses of $2,743.16 (total $79,456.76), with minor reductions for withdrawn time entries.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Dellew is a "prevailing party" under EAJA after Government took corrective action and the Court dismissed the case	Dellew argued the Court’s oral statements at a fully briefed argument functioned like a judicial imprimatur and materially changed the parties’ legal relationship, qualifying it as a prevailing party	Gov argued corrective action was voluntary and the Court’s oral comments lacked the judicial imprimatur needed under Buckhannon; catalyst theory does not apply	Held: Dellew is a prevailing party — the Court’s detailed, late-stage oral conclusions functioned like a judicial imprimatur and induced the Agency’s corrective action
Whether the Government’s position was "substantially justified"	Dellew argued the Army’s interpretation re: G&A cap was unreasonable and thus not substantially justified	Gov argued its interpretation of the solicitation and its cost‑realism analysis were reasonable	Held: Government’s position was not substantially justified, primarily due to its untenable interpretation of the G&A cap issue
Whether the EAJA application was timely and the applicant met EAJA size/net‑worth limits	Dellew asserted the fee application was timely and that it met the statutory net‑worth and employee thresholds	Gov conceded timeliness and eligibility	Held: Application timely; Dellew met the net‑worth and employee limits
Whether claimed attorney hours/rates and expenses were reasonable	Dellew sought fee recovery at CPI‑adjusted $190.94/hr and detailed time entries; defended requested hours for researching and drafting a novel prevailing‑party argument	Gov contested certain time entries as excessive or unclear and objected to some individual entries	Held: Court approved CPI‑adjusted rate, allowed most hours (with small reductions for withdrawn entries), and approved listed expenses as reasonable

Key Cases Cited

Buckhannon Board & Care Home, Inc. v. West Virginia Dep’t of Health & Human Resources, 532 U.S. 598 (rejection of catalyst theory; prevailing party requires judicial imprimatur)
Brickwood Contractors, Inc. v. United States, 288 F.3d 1371 (Fed. Cir.) (bench comments at TRO hearing held insufficient to create judicial imprimatur under Buckhannon)
Rice Services, Ltd. v. United States, 405 F.3d 1017 (Fed. Cir.) (dismissal/remand order insufficient to confer prevailing‑party status when government acted unilaterally prior to judicial ruling)
Universal Fidelity LP v. United States, 70 Fed. Cl. 310 (Court of Fed. Cl.) (written court order late in process treated as having sufficient judicial imprimatur to confer prevailing‑party status)
Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240 (EAJA context and American Rule on attorney’s fees)
Key Tronic Corp. v. United States, 511 U.S. 809 (fee awards require statutory authority)