Maritime Mgmt. Inc. v. U.S.

• Decision Date: 01 March 2001
• Docket Number: No. 99-14862,99-14862
• Citation: 242 F.3d 1326
• Parties: (11th Cir. 2001) MARITIME MANAGEMENT, INC., a Florida corporation, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1326

242 F.3d 1326 (11th Cir. 2001)

MARITIME MANAGEMENT, INC., a Florida corporation, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.

No. 99-14862.

United States Court of Appeals, Eleventh Circuit.

March 1, 2001.

March 13, 2001

[Copyrighted Material Omitted] Appeal from the United States District Court for the Middle District of Florida.(No. 95-01238-CIV-J-20B), Harvey E. Schlesinger, Judge.

Before BLACK, FAY and COX, Circuit Judges.

PER CURIAM:

The Government appeals the district court's award of attorneys' fees to Maritime Management, Inc. pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. 2412.

I. FACTS AND PROCEDURAL HISTORY

In September of 1994, the Department of the Navy through Military Sealift Command solicited bids for a contract to supply layberthing facilities and services for two SL-7 Fast Sealift Ships. The SL-7s, measuring 946 feet in length and 105.6 feet in width, provide rapid sealift of military cargo for the Armed Forces from the United States to locations around the world. Because of their large size and their military charge, provision of layberthing facilities for these vessels requires special considerations, all of which were detailed in the bid request as minimum requirements for the award of the contract. Military Sealift Command (the Agency) rated bids for cost and for conformity to these minimum requirements.

The Agency received six initial offers from five competing bidders and reviewed each for technical deficiencies. After the submission of best and final offers, only two acceptable bidders remained: Maritime Management, Inc. (Maritime) and Keystone Ship Berthing, Inc. (Keystone). The Agency awarded the contract to Keystone as the lowest acceptable bidder and Maritime protested the award to the General Accounting Office, citing technical deficiencies in Keystone's offer. Award of the contract was suspended pending review. The Agency submitted the administrative record to the General Accounting Office (GAO),¹ which upheld the award to Keystone and lifted the contract suspension.

Maritime filed a complaint in the district court, claiming the Agency violated the Administrative Procedure Act, 5 U.S.C. 701 et seq. Maritime asserted the award to Keystone was arbitrary and capricious because Keystone's bid proposal failed to satisfy the minimum requirements of the bid solicitation in the areas of safe berthing, safe working area, water depth for access routes, security, mooring, roadways, and fuel bunkering. (R.1-16 passim.)

The case was referred to a magistrate judge for preparation of a report and recommendation. Early in the proceedings the parties disputed the composition of the administrative record. In support of a motion for summary judgment, the Government submitted what it characterized as "the entire Administrative Record," (R.1-21 at 1) and Carole H. Wieszek, the contracting officer responsible for procurement and administration of the contract, certified that "the decision to award the above-mentioned contract was based on these documents." (R.1-24 at 1.) The Government's submission consisted of two black binders, tab numbers one through thirty-four, and some site drawings-the same information that the Government had filed with the GAO as the administrative record.

Next, arguing that "the Court's scope of review is limited to the Administrative Record," the Government asked for a stay of all further discovery and requested a protective order relieving it from responding to Maritime's outstanding interrogatories, requests for production and requests for admission. (R.1-27 at 2.) Maritime, opposing the motion, questioned whether the Government had submitted a complete record, and requested limited discovery. (R.1-32 at 6.) The magistrate judge, stating that "[i]t appears to the Court that the United States has not submitted the entire administrative record," directed the parties to confer and jointly determine the complete record. (R.2-34 at 2.)

After three meetings the parties failed to agree, and Maritime, asserting that in the meetings "it was determined that [the Government] failed to file several documents with its initial purported 'record,' " informed the court of the impasse. (R.2-36 at 2.) The magistrate judge scheduled an evidentiary hearing on the matter. The day before the hearing the Government moved to supplement the record with the agency report and additional materials, tab numbers thirty-five through forty-two. The additional materials were discovered after the Government "requested that the federal agency review its file and determine all documents considered by the agency in making its decision to award the contract in question." (R.2-39 at 2.) No explanation was offered for their prior omission from the record. At the hearing, responding to allegations from Maritime and repeated questions from the magistrate judge, counsel for the Government admitted that tab numbers thirty-five through forty-two had not previously been included in the binders submitted to both the GAO and to the court. The Government also acknowledged that the Agency bore responsibility for compiling the record.² The Government continued to oppose inclusion of certain items, including the protest letter Maritime filed with the GAO, as well as several other post-award documents.³

Following the hearing, the magistrate judge issued an order including tabs thirty-five through forty-two, the agency report, Maritime's initial protest document, and certain post-award documents in the administrative record.⁴ The magistrate judge lifted the Government's protective order, which had been temporarily in place prior to the hearing, allowing Maritime to proceed with limited discovery.⁵ In so doing the magistrate judge noted that a court's review of a decision to award a contract will not be limited to the formal record if a plaintiff makes "a strong showing of bad faith or improper behavior," quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420, 91 S.Ct. 814, 825, 28 L.Ed.2d 136 (1971), overruled on unrelated grounds by Califano v. Sanders, 430 U.S. 99, 105, 97 S.Ct. 980, 984, 51 L.Ed.2d 192 (1977), and concluded that "[a]t this point plaintiff has made a sufficient showing to justify at least limited discovery. It is clear that the complete administrative record was not submitted to the GAO." (R.2-44 at 8-9.)

The Government filed a Rule 72 objection to the magistrate judge's order with the district court.⁶ See Fed.R.Civ.P. 72. The district court rejected the Government's objection, concluding that limited discovery was indeed proper because of the Government's "failure to include relevant documents in the report to the GAO and in light of the negative nature of those documents purposefully excluded from the report. Such evidence constitutes a showing of bad faith or improper behavior on the part of Defendant justifying additional discovery." (R.2-50 at 2.) On January 2, 1997, the magistrate judge issued an order finally determining which documents would constitute the administrative record. (R.3-74 at 4.) Some of the documents that had been the subject of the Government's arguments at the evidentiary hearing and the Rule 72 objection were included in the record.⁷

The magistrate judge's Report and Recommendation advised the district court to enter judgment in favor of Maritime and award it the contract, or, in the alternative, to allow full discovery on whether there was good faith review of the proposals. (R.4-100 at 58-59.) The magistrate judge determined that the Agency had improperly relaxed the bid requirement regarding security, thereby prejudicing Maritime's opportunity to compete for the contract. The district court agreed that the Agency had violated federal regulations by relaxing the bid requirement, but concluded that there was no showing of prejudice to Maritime. (R.4-104 at 2.) Instead of awarding the contract to Maritime, the district court ordered a rebidding of the contract.

Both parties appealed to this court. Maritime argued that the contract should not be rebid but should be awarded to Maritime, and the Government argued that without a showing of prejudice the contract should neither be rebid nor awarded to Maritime. This court affirmed the district court's decision, agreeing with the no-prejudice finding and stating that because the Contracting Officer had violated the law, the district court did not err in setting aside the contract. See Maritime Management v. United States, 170 F.3d 187, No. 98-2380, mem. op. at 3-4 (11th Cir. January 28, 1999).

Following that decision, in the judgment from which the current appeal is taken, the district court granted Maritime's motion for attorneys' fees and costs under the Equal Access to Justice Act (EAJA), 28 U.S.C. 2412, in the amount of $281,225.00. (R.4-133 at 2.) The order identified the Government's bad faith in failing to submit a complete administrative record as both the basis for the award and the reason for exceeding the per hour cap established by 28 U.S.C. 2412(d)(2)(A).

II. ISSUES ON APPEAL

On appeal the Government argues that the district court erred because (1) its position was substantially justified, making any award of fees improper; (2) no evidence supports the bad faith finding; (3) the award included fees incurred during the GAO proceedings that are not compensable under the EAJA; and (4) that the portion of the award that reimbursed expenses incurred by Maritime's president were purely personal in nature and therefore improper.

III. STANDARD OF REVIEW

This court reviews the decision to grant or deny attorneys' fees under the EAJA for abuse of discretion. National Treasury Employees Union v. Internal Revenue Service, 735 F.2d 1277, 1278 (11th Cir.1984). The district court's finding of bad faith is a finding of fact that we review for clear error. Long v. Florida, 805 F.2d 1542, 1550 (11th Cir.1986), rev'd on other grounds 487...