DGR Associates, Inc. v. United States
2012 U.S. App. LEXIS 16019
Fed. Cir.2012Background
- DGR prevailed in a bid protest against the Air Force and sought EAJA fees; the trial court awarded fees, finding the Government's position not substantially justified.
- The underlying dispute involved whether SBA parity regulations favor HUBZone over 8(a) programs; multiple branches had conflicting views on statutory priority.
- During agency action, the Air Force followed SBA parity regulations, guided by DOJ, OMB, and DOD memoranda, despite GAO and Court of Federal Claims opinions to the contrary.
- In Court, the government argued both a merits-based position about the statute and a jurisdictional defense based on timing of protest filing; the trial court rejected both for main purposes.
- The Federal Circuit reversed, holding that the government’s overall position was substantially justified, and thus EAJA fees were not warranted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Merits: was HUBZone priority over 8(a) lawful? | DGR: parity violated the plain Act; HUBZone must precede 8(a). | Government: parity regulations were consistent with the Act; reasonable belief there was a dispute. | Substantial justification found; agency-level view justified; merits position not clearly unreasonable. |
| Agency action vs litigation positions: were positions substantially justified at agency level? | Parity regulations unlawfully constrained Air Force actions; agency actions not justified. | Agency actions aligned with parity regulations and DOJ/OMB/DOD guidance; justified. | Agency actions were substantially justified; the agency-level position supported by legal context. |
| Jurisdictional argument: was the Court's jurisdiction properly invoked? | Blue & Gold Fleet waived preclusion, so suit timing should not bar review. | Jurisdictional defense was weak but part of overall posture; not dispositive. | Overall posture substantially justified; jurisdictional argument considered but not controlling. |
Key Cases Cited
- Scarborough v. Principi, 541 U.S. 401 (U.S. 2004) (EAJA standard; reasonableness of government position)
- Pierce v. Underwood, 487 U.S. 522 (U.S. 1988) (substantial justification threshold; genuine dispute standard)
- INS v. Jean, 496 U.S. 154 (U.S. 1990) (defining substantially justified positions in EAJA context)
- Blue & Gold Fleet L.P. v. United States, 492 F.3d 1308 (Fed. Cir. 2007) (exhaustion of administrative remedies and waiver concept)
- Lion Raisins, Inc. v. United States, 416 F.3d 1356 (Fed. Cir. 2005) (statutory interpretation and agency discretion in procurement)
- White v. Nicholson, 412 F.3d 1314 (Fed. Cir. 2005) (EAJA substantial justification standards and appellate review)