Q Integrated Companies, LLC v. United States
133 Fed. Cl. 479
Fed. Cl.2017Background
- Q Integrated challenged HUD’s award of three Asset Management contracts to Sage, alleging inadequate discussions during past-performance evaluation; the Court found HUD’s discussions prejudicial and awarded injunctive relief plus bid costs.
- The Court’s merits decision held HUD’s “Not Relevant” sub-ratings constituted adverse past-performance information that should have been raised in discussions, prejudicing Q Integrated’s chance of award.
- The Court directed submission of bid-preparation costs and EAJA fee requests; consideration was delayed while SBA size determinations and an intervening government RCFC 60(b) motion were resolved.
- Q Integrated sought $63,373.41 in bid costs (later revised) and $82,591.06 in attorneys’ fees; the government contested allocation, reasonableness, EAJA eligibility, and substantial justification.
- The Court allocated bid costs to the three protested areas (30% of total HUD procurement effort), awarded $21,124.47 in bid costs, and found the government not substantially justified, awarding EAJA fees and expenses totaling $67,322.66.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to bid-preparation costs | Q Integrated argued HUD’s prejudicial discussion failures caused unnecessary bid costs for the three protested areas | Government argued costs were not unnecessarily incurred because Q Integrated reused nearly identical proposals across ten areas and benefitted elsewhere | Court: HUD’s errors prejudiced Q Integrated; it is entitled to bid costs allocable to the three protested areas |
| Allocation of bid costs among multiple proposals | Q Integrated sought costs for all non-awarded areas (90%); alternatively sought full procurement costs | Government sought allocation limited to the three protested areas (30%) | Court: equal allocation across ten areas is reasonable; award limited to 30% of total bid costs |
| Reasonableness and proof of claimed bid costs | Q Integrated produced reconstructed time and invoices; reduced claims in reply to objections | Government challenged pre-solicitation hours, principal rates, certain consultant fees, and specific expenses | Court: accepted reconstructed time and revised rates/invoices as reasonable; awarded $21,124.47 (post-allocation) |
| EAJA eligibility and substantial justification | Q Integrated asserted prevailing-party status, met net-worth/employee limits with supplemental records, sought full EAJA award | Government argued Q Integrated didn’t prove size/net worth and that government position was substantially justified (Fair/Some Confidence rating) | Court: Q Integrated met EAJA eligibility; government not substantially justified because adverse sub-ratings required discussions; awarded full EAJA fees (with reductions for unsuccessful amendment motion and expense concessions) |
Key Cases Cited
- Geo-Seis Helicopters, Inc. v. United States, 79 Fed. Cl. 74 (award of bid-preparation costs includes research and proposal preparation)
- Lion Raisins, Inc. v. United States, 52 Fed. Cl. 629 (definition and recoverability of bid-preparation expenses)
- Reema Consulting Servs. v. United States, 107 Fed. Cl. 519 (three-part test for recoverable bid costs)
- Boeing N. Am., Inc. v. Roche, 298 F.3d 1274 (allocability requires sufficient nexus between cost and contract)
- Lockheed Aircraft Corp. v. United States, 375 F.2d 786 (nexus test for allocability)
- Pierce v. Underwood, 487 U.S. 552 (standard for "substantially justified" under EAJA)
- Hensley v. Eckerhart, 461 U.S. 424 (degree of success governs fee awards)
- Chiu v. United States, 948 F.2d 711 (EAJA considers government position throughout dispute)
- REO Sol., Inc. v. United States, 125 Fed. Cl. 659 (distinguishing overall "Fair/Some Confidence" rating context)
- DGR Assocs., Inc. v. United States, 690 F.3d 1335 (interpretation differences can support substantial justification in some contexts)