Sufi Network Services, Inc. v. United States
113 Fed. Cl. 140
| Fed. Cl. | 2013Background
- SUFI sued for attorneys’ fees, expenses, and interest arising from a 1996 Air Force contract for telephone services in Germany, after ASBCA found a material breach.
- Court previously held Government liable for fees and expenses; damages trial on April 24-26, 2013 addressed hours, rates, expenses, and interest.
- SUFI retained Crowell & Moring on a contingency basis; damages claims were large and complex, guiding reasonableness scrutiny.
- PSA transition agreement after ASBCA decision and later DCAA audit influenced the damages timeline and claims processing.
- Court awarded all claimed fees and expenses with interest, but denied overhead and profit multiplier; final award totaled $723,189.31 plus interest.
- Affirmative defenses of exhaustion and release were raised but rejected as untimely and meritless.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Reasonableness of claimed hours | SUFI hours are reasonable and well-supported by contemporaneous timesheets. | Government contends categories are vague and require proportional reductions. | Hours found reasonable; no reduction mandated; fees approved. |
| Reasonableness of rates | Crowell & Moring rates are reasonable and market-consistent. | Rates should be based on Laffey Matrix instead of firm rates. | Firm rates presumptively reasonable; Court rejects Laffey-based adjustment. |
| Recoverability of expenses | All claimed expenses are reasonable and properly documented. | Certain expenses lack adequate documentation and should be disallowed. | Expenses recoverable; $25,486.81 awarded after dispositive documentation showing reasonableness. |
| Accrual of interest under PSA | Interest accrues from date damages were incurred; contingency does not defeat incurrence. | Interest accrues from date claim submitted or when paid under PSA terms. | Interest accrues from the date damages were actually incurred. |
| Overhead and profit multiplier | Contends 25% combined overhead and profit on fees and expenses. | No overhead or profit due to lack of value-added by contractor; multiplier inappropriate. | Overhead and profit denied; no multiplier awarded. |
Key Cases Cited
- Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (reasonableness and billing judgment in fee awards)
- Blum v. Stenson, 465 U.S. 886 (U.S. 1984) (prevailing market rate presumptively reasonable)
- Mass. Bay Transp. Auth. v. United States, 129 F.3d 1226 (Fed. Cir. 1997) (lodestar method and reasonable hours/rates framework)
- United Partition Sys., Inc. v. United States, 95 F.Cl. 42 (2010) (incurrence of fees; timing and payment rule)
- Phillips v. Gen. Servs. Admin., 924 F.2d 1577 (Fed. Cir. 1991) (fee-shifting framework; payment expectations)
- Eureka Inv. Corp. v. Chicago Title Ins. Co., 743 F.2d 932 (D.C. Cir. 1984) (detailed timekeeping and billing detail for fee requests)
- Florida Rock Indus., Inc. v. United States, 9 Cl. Ct. 285 (1985) (counsel’s expenses must be reasonably incurred)
- Bluebonnet Savings Bank v. United States, 339 F.3d 1341 (Fed. Cir. 2003) (breach damages and likelihood of recovery principles)