DENIED:  October 17, 2007 
CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
OMNI DEVELOPMENT CORPORATION, 
Applicant, 
v. 
DEPARTMENT OF AGRICULTURE, 
Respondent. 
David S. Black of Holland & Knight LLP, McLean, VA, counsel for Applicant. 
Elise Foster, Office of the General Counsel, Department of Agriculture, Ogden, UT, 
and Randall J. Bramer, Office of General Counsel, Department of Agriculture, Denver, CO, 
counsel for Respondent. 
Before Board Judges VERGILIO , POLLACK , and GOODMAN .1 
Opinion for the Board by Board Judge GOODMAN .  Board Judge POLLACK  concurs in 
part and dissents in part. 
GOODMAN , Board Judge. 
On January 16, 2007, Omni Development Corporation (Omni) filed a timely 
application under the Equal Access to Justice Act (EAJA) for attorney fees, costs, and 
expenses. Omni seeks to recover  $712,990.73,  associated with proceedings at the 
1 Judge Goodman was selected by random assignment as a panel member when the 
EAJA application was filed in January 2007, as Judge Westbrook, a member of the panel 
which resolved the underlying appeals, had retired earlier. 

 
 
   
 
 
 
 
       
  
  
 
  
   
2 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
Department of Agriculture Board of Contract Appeals (AGBCA), and an additional 
$39,140.11, associated with proceedings at the United States Court of Appeals for the 
Federal Circuit.   In its application, Omni breaks down the $712,990.73 claimed for the board 
actions to $392,245.50, which it says is applicable to its default challenge and breach claim 
(AGBCA 97-203-1), $306,970.65 for litigating quantum resulting from the breach (AGBCA 
98-182-1), and $13,774.58 for preparing the application. 
In the underlying appeals, Omni sought to overturn a termination for default by the 
Forest Service (FS) and further sought $2,193,066 for breach of the lease associated with that 
default.  The damages claimed were composed of $162,883 for lost rental income and 
$2,030,183 for lost reversionary interest in the building that was to be constructed.  The 
board overturned the default and awarded Omni $204,779 (plus applicable interest) for the 
breach.  Omni Development Corp. , AGBCA 97-203-1, et al., 01-2 BCA ¶ 31,487.  The 
$204,779 was entirely for loss of the reversionary interest. 
Summarizing the procedural history, on September 10, 1997, Omni filed its notice of 
appeal with the AGBCA on the termination for default (AGBCA 97-203-1).  On July 10, 
1998, Omni filed a notice of appeal from a contracting officer (CO) decision denying its 
breach claim for damages attributable to the termination for default (AGBCA 98-182-1). 
The appeals were then combined for purposes of processing. 
On June 18, 1999, the Government moved for summary judgment as to entitlement, 
asking the board to conclude that the termination for default was justified.  On August 6, 
1999, Omni filed its opposition and a cross-motion for summary judgment.  On June 29, 
2001, the board denied the parties’ motions. The majority concluded that on the record 
before it and for purposes of summary judgment there were disputed material facts regarding 
the validity of the termination for default.  One panel member issued a dissenting opinion; 
he would have upheld the termination for default at the summary judgment stage and denied 
the appeals. 
Following the development of the evidentiary record and the submission of briefs, the 
record closed.  The board issued its decision on May 25, 2005.  A majority of the panel held 
that the termination for default was improper and that the Government had breached the 
contract. The majority awarded damages.  The same panel member who issued the dissent 
in the decision on the parties’ cross-motions issued a dissent that disagreed with the majority 
as to both entitlement and damages.  Omni Development Corp. , AGBCA 97-203-1, et al., 
05-2 BCA ¶ 32,982. 
On June 18, 2005, the FS filed a notice of appeal with the Court of Appeals for the 
Federal Circuit and on September 23, 2005, Omni cross-appealed.  The Court summarily 

 
   
   
     
  
 
  
 
 
  
 
 
     
      
    
  
 
     
 
 
  
 
3 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
affirmed the board decision on September 19, 2006.  Johanns v. Omni Development Corp ., 
197 F. App’x 941 (Fed. Cir. 2006). 
Discussion 
Omni timely filed an application 2   pursuant to the EAJA, as amended.  5 U.S.C. § 504 
(2000).  It is undisputed that Omni qualifies as a corporation to recover under the Act, given 
its size and net worth.  Id . § 504(b)(1)(B).  The Act directs that the Board shall award to 
Omni fees and other expenses it incurred in connection with the proceedings, unless the 
Board finds that the position of the agency was substantially justified or that special 
circumstances make an award unjust.  Id. § 504(a)(1).  The Government’s position is 
substantially justified if it is justified in substance or in the main, or justified to a degree that 
would satisfy a reasonable person.  Pierce v. Underwood, 487 U.S. 552 (1988).  The burden 
of proof in establishing substantial justification falls upon the Government.  Community 
Heating & Plumbing Co. v. Garrett , 2 F.3d 1143 (Fed. Cir. 1993); Schuenemeyer v. United 
States , 776 F.2d 329 (Fed. Cir. 1985). 
In the underlying appeals, the majority held that the Government’s decision to 
terminate for default did not comply with the applicable law and was a breach of contract. 
The fact that the Government did not prevail in the underlying appeals is not determinative, 
as a different standard applies in determining an applicant’s entitlement to recover fees and 
expenses pursuant to EAJA.  We must determine if the Government was substantially 
justified in its position throughout the proceedings.  Allen Ballew General Contractor, Inc. 
v. Department of Veterans Affairs , CBCA 3-C(VABCA 6987E), et al. (Aug. 15, 2007). 
In Chiu v. United States , 948 F.2d 711, 715 (Fed. Cir. 1991), the Court provided 
direction regarding the required analysis: 
2 On January 6, 2007, pursuant to section 847 of the National Defense Authorization 
Act for Fiscal Year 2006, Pub. L. No. 109-163, 119 Stat. 3391, the AGBCA was terminated 
and its cases, personnel, and other resources were transferred to the newly-established 
Civilian Board of Contract Appeals (CBCA). The proceedings under this application were 
docketed as CBCA 609-C, relating to AGBCA 97-203-1, and CBCA 610-C, relating to 
AGBCA 98-182-1. The holdings of the AGBCA and other predecessor boards of the CBCA 
are binding on this Board.  Business Management Research Associates, Inc. v. General 
Services Administration, CBCA 464, 07-1 BCA ¶ 33,486. 

 
  
 
  
 
   
 
   
    
       
      
 
          
   
     
 
   
 
 
    
     
 
4 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
[T]o determine whether the overall position of the United States is 
substantially justified, trial courts are instructed to look at the entirety of the 
government’s conduct and make a judgment call whether the government’s 
overall position had a reasonable basis in both law and fact. 
Termination for default and government breach 
As detailed above, the parties filed cross-motions for summary judgment on the issue 
of the validity of the default termination.  While the majority denied the cross-motions, 
holding that issues of material fact remained in dispute, one panel member issued a 
dissenting opinion that contained extensive findings of fact and a reasoned discussion of 
applicable legal principles.  The dissenting opinion concluded that the termination for default 
was properly issued and would have denied appellant’s motion, granted respondent’s motion, 
and denied the appeals. 
Ultimately, a majority of the board held the termination for default to be a breach of 
contract and awarded damages.  The same panel member who issued the dissent in the 
decision on the cross-motions issued another extensive dissenting opinion containing a 
discussion of the facts and applicable legal principles and concluded that the termination for 
default was proper, was not a breach of contract, and that appellant was not entitled to 
damages.  The dissent went further, concluding that even if the termination for default was 
improper, appellant was not entitled to the damages awarded by the majority. 
Even though the Government did not prevail, we find that its position was 
substantially justified throughout the claim process. It is clear from the board’s ruling on the 
cross-motions for summary judgment that the Government had convinced one panel member 
that its position on the validity of the default termination was correct, while the panel 
members in the majority believed a trial was necessary to resolve issues of material fact that 
remained in dispute. After multiple days of hearing on the merits and after a record was fully 
developed and issues briefed, the panel member who dissented in the summary judgment 
proceedings remained convinced of the correctness of the Government’s position.  The 
dissenting panel member wrote detailed, reasoned opinions in both the summary judgment 
and merits hearing proceedings in support of his conclusions that the Government’s position 
as to the propriety of the termination for default was correct and had a reasonable basis in 
both fact and law. For the reasons expressed in the dissents, the Government’s position of 
continued support of the termination for default was justified based upon the record at its 
various stages.  Accordingly, we find that the Government’s position was substantially 
justified, i.e., justified in substance or in the main, or justified to a degree that would satisfy 
a reasonable person. In so holding, we do not do so simply because one panel member issued 
dissenting opinions.  Rather, despite that panel member’s disagreement with the majority 

   
 
 
    
 
     
 
__________________________________ 
_________________________________ 
5 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
opinions, the detailed and reasoned factual and legal analysis of the dissenting opinions leads 
us to this conclusion. 
Breach damages 
During the proceedings of the underlying appeals, the information in the 
Government’s possession did not support the amount Omni sought.  The Government argued 
that if information in its possession was to be used as a basis for damages, if Omni were 
entitled to damages, the information would only support an award in an amount substantially 
lower than that sought by Omni. 
The Government was substantially justified in defending against the quantum claim 
on two distinct bases.  First, its position in support of the termination for default was 
substantially justified. A valid termination for default would mean no Government breach 
and no recovery of damages by Omni.  Second, the excessive damages sought by Omni, 
particularly with a lack of support throughout the proceedings, fully support the 
Government’s non-payment of the relief sought. 
Expenses incurred on appeal 
Further, given the conclusion that the Government’s position was substantially 
justified throughout the litigation process, we deny the request to recover under EAJA the 
expenses applicant incurred in preparing its application for costs. 
Decision 
The application is DENIED . 
ALLAN H. GOODMAN 
Board Judge 
I concur: 
JOSEPH A. VERGILIO 
Board Judge 

      
  
     
  
 
   
          
 
 
   
   
  
    
     
  
           
 
      
6 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
POLLACK , Board Judge, concurring in part and dissenting in part. 
The Department of Agriculture Board of Contract Appeals (AGBCA) majority 
decision in Omni Development Corp. , AGBCA 97-203-1, 05-2 BCA ¶ 32,982, overturned 
the Forest Service (FS) termination for default of Omni’s lease contract.  The AGBCA 
majority concluded that the FS could not meet the legal test required for a default based on 
the failure to make progress. The AGBCA majority further found no other basis justifying 
the default.  The AGBCA majority concluded that at the time of the termination, the 
contracting officer (CO) could not meet the controlling legal test for default as set out in 
Lisbon Contractors, Inc. v. United States , 828 F.2d 759, 765 (Fed. Cir. 1987)
.  The Lisbon 
test requires that in order to terminate for failure to make progress, a CO must be able to 
reasonably conclude that at the time of termination, there was no reasonable likelihood that 
the contractor could complete by the contract due date.  
On Omni’s other appeal, AGBCA 98-182-1, also reported at 05-2 BCA ¶ 32,982, 
the AGBCA majority awarded appellant $204,779 on the breach claim of $2,049,653 arising 
out of the wrongful termination.  
Appellant has claimed fees and expenses under EAJA for both. 
I dissent as to the denial of EAJA fees and expenses on CBCA 609-C, where the 
majority addresses the default appeal issued by the AGBCA in AGBCA 97-203-1.  The 
position of the CO and that of the FS on entitlement in the AGBCA case was not 
substantially justified either at the time of termination or at any other time during the ensuing 
litigation.  I concur with the denial of EAJA fees and expenses on CBCA 610-C (AGBCA 
98-182-1). 
Background Facts 
In November 1995, the FS issued a solicitation for offers (SFO) which involved two 
separate buildings to be leased to the FS.  The smaller was the fire center and the larger, the 
supervisor’s building.  The SFO contemplated that the buildings could be constructed for 
those uses.  The SFO called for space to be ready for occupancy by November 1, 1996. 
Paragraph 1.9, AWARD, provided that “15 days after award, the successful offeror/lessor 
shall provide to the CO a firm commitment of funds in an amount sufficient to perform the 
work required under the leasehold agreement.” The SFO also contained a clause titled, 
“DEFAULT BY LESSOR DURING THE TERM.”  It stated failure to perform any 
requirement of the lease constitutes a default, provided any such failure shall remain uncured 
for a period of thirty days following notice thereof from the CO or CO’s authorized 
representative. It defined notice to mean “written notice sent by certified or registered mail, 

  
 
 
  
  
  
     
  
  
   
 
       
 
 
        
 
      
    
 
 
  
 
 
 
7 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
Express Mail or comparable service, or delivered by hand.”  The solicitation also contained 
a clause titled “NO WAIVER.”  The solicitation did not contain a Termination for 
Convenience clause. 
The FS did not award Omni a contract on the solicitation until April 23, 1996, at 
which time the FS accepted Omni’s first proposal on the lease.  Omni’s offer called for the 
larger building, the supervisor’s building, to be ready for occupancy within 300 days of 
award.  Accordingly, the parties were then looking at a late February 1997 completion. It 
was undisputed that Omni did not provide the CO with a firm commitment for financing 
within fifteen days of award, as was set out in Paragraph 1.9 of the original solicitation.  It 
was also undisputed that the CO did not take any adverse action to enforce the specific time 
frame set out in Paragraph 1.9, either then or throughout the life of the contract.  In fact, the 
cure notice of June 6, 1997 (the termination cure letter) was the first written “demand” by 
the FS giving Omni a mandatory time frame for producing a firm commitment or otherwise 
face default.  The cure notice did not cite Paragraph 1.9 and compliance with the fifteen days 
set out in that clause was not a stated basis for the default. 
Once the FS awarded the contract to lease space, Omni proceeded to design each of 
the buildings which the FS was to occupy.  It provided those designs to the FS for review. 
It could not proceed with substantial construction on the larger, supervisor’s building, 
however, until it had financing in place, had closed on the land, and had a building permit. 
While the purchase of the land for the supervisor’s building had not been finalized, nor had 
any building permit been issued on the supervisor’s building as of the date of the default 
termination, the AGBCA majority found from substantial evidence that the closing on the 
land and the securing of a building permit were not the issues driving the default.  Those 
would have been completed without problem, once financing had been secured.  The default 
was driven by the fact that Omni could not produce a financing commitment by the 
unilaterally-imposed due date set by the CO in the CO’s June 6, 1997, cure notice.  Prior to 
the expiration of the cure notice and at a point which would have allowed Omni ample time 
to complete, Omni and its lender informed the FS that the financing had been recommended 
to the anticipated lender’s loan committee, that Omni had provided the lender with all the 
needed information, and financing approval was simply awaiting the committee’s next 
meeting, which was anticipated to take place on June 25, 1997. Notwithstanding, the CO 
terminated the contract. 
The AGBCA majority recognized that getting Omni to confirm financing was a 
continuing problem throughout the life of the project.  That was evident in the fact that 
financing was still not in place as of April 27, 1997, almost a year after award.  However, 
during the time frame from award to April 1997, Omni had identified the land to be used for 
the supervisor’s building (although it had not yet purchased the land), had substantially 

 
 
 
 
 
 
   
         
    
    
   
 
 
       
 
    
   
   
  
 
    
 
     
 
        
 
  
8 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
constructed the fire center (with the FS taking occupancy), had made design submissions to 
the FS on the supervisor’s building (which the FS responded to), had performed site work 
on the supervisor’s building, and was pursuing financing.  Furthermore, during the time 
frame of September 1996 into the end of January 1997, much of the activity as to the 
supervisor’s building was put on hold.  That was because Omni (with knowledge and 
agreement of the FS) discussed the possibility of adding the Bureau of Land Management 
(BLM) as an co-tenant with the FS. A positive decision by the BLM would have required 
modifications to the design. The BLM ultimately declined to join as a tenant and so 
informed Omni in late January 1997.  The project then resumed with the FS as the tenant. 
 The date of April 27, 1997, was particularly significant. On April 27, Omni and the 
FS entered into a new lease agreement which replaced the original agreement that had been 
awarded pursuant to the solicitation. The new lease agreement stated that it incorporated by 
reference solicitation terms and provisions.  The new lease had no specified start date for 
construction and no specific date or time frame for Omni to provide a commitment on 
financing.  The new lease did specify a new completion date for the building of 
December 13,  1997, which for some unexplained reason was stated as tentative.  As of the 
date of the new lease, the FS knew that Omni did not have a firm financing commitment and 
was continuing efforts to finalize the matter.  Furthermore, any attempt to suggest that the 
new lease resurrected the fifteen-day time frame in the original SFO is nonsensical, since the 
fifteen days referenced in the SFO were to be counted from the date of original award (a date 
which had occurred a year earlier). The April 27 lease was not an award.  Rather, it was a 
new agreement between Omni and the FS. Finally, even after the parties entered into the 
April 27 agreement, it is noteworthy that at no time did the FS claim the fifteen days were 
applicable, and even in the cure notice, the FS did not use fifteen days or cite the SFO 
paragraph on financing.  The FS terminated because it demanded a particular assurance from 
Omni (one not required by the contract), and Omni could not provide that exact assurance. 
The AGBCA majority considered it significant that during April and May 1997, 
beginning even prior to the new lease agreement, the FS had several contacts with Mr. John 
Pitcher, the loan officer for Equitable, as to the status and progress of Omni in securing the 
financing commitment from his firm. In a letter of April 7, 1997, Mr Pitcher advised the CO 
that even though he did not yet have an appraisal or loan application, Equitable had every 
expectation of funding a combination construction/permanent loan for the borrower, subject 
to finalization of the lease which Mr. Pitcher understood would occur on April 25.  The lease 
he was referring to was the new lease agreement referenced above, carrying the date of 
April 27, 1997. Later, in May, Mr. Pitcher had conversations with FS officials, as the FS was 
attempting to understand the delay in securing financing.  In the conversation of May 27, 
1997, Mr. Pitcher told the FS that Omni’s appraiser had still not yet provided the material 
necessary for Equitable to go forward with the loan approval and that he was awaiting that 

 
     
 
 
  
 
  
    
        
   
  
   
 
 
   
 
  
  
     
  
 
   
  
       
 
   
  
9 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
information.  He said that with that information, the approval would take at least two weeks. 
The fact that Mr. Pitcher acknowledged to the FS on May 27 that he was still lacking data 
was considered significant by the AGBCA majority. That is because, about two weeks later, 
on June 10, he reported to the FS a considerable change.  On June 10 he told the FS that the 
loan was then ready to go and was only awaiting the meeting of Equitable’s loan committee. 
Given Mr. Pitcher’s earlier candor as to Omni not yet providing needed data, his positive 
statements of June 10, logically gave the FS reason to believe that Mr. Pitcher finally had the 
needed information and that approval was simply awaiting a formal meeting of the 
committee. 
The AGBCA majority concluded that on or about June 2, 1997, the FS had come to 
a decision to terminate the lease.  By letter of June 6, the FS issued a cure notice.  The cure 
notice specified that Omni had to provide a firm written commitment for financing within 
ten days of Omni’s receipt of the notice.  There were issues as to when the cure notice was 
actually received by Omni; however, the fate of the default did not turn on that issue.  It 
appears the notice was received on either June 9 or 10.  What is relevant is that on June 10, 
Mr. Pitcher of Equitable again spoke with the FS.  He reported that he had received the 
appraisal from Omni’s appraiser on June 9.  He told the FS he was preparing the loan 
documents for the loan committee approval at the next meeting.  He provided the FS with 
tentative dates for that meeting, and then said if the loan was approved, he would be able to 
issue a firm commitment for financing within two to three days and the loan could close 
within two weeks thereafter.  On June 17, still prior to the termination, Omni, through its 
principal, Mr. Quayle, informed the CO that Omni would receive a loan commitment on 
June 25, and the other matters as to the drawings and building permit would also be 
completed by that point. On June 17 or 18, Mr. Quayle provided the FS with a letter from 
Mr. Pitcher to Omni, dated June 17.  In that letter Mr. Pitcher said that he had completed his 
write-up and recommendation for the loan and distributed it to some committee members. 
He said that the loan committee was scheduled for Friday of that week and that it would 
likely be Wednesday of the following week (June 25) before he could have the loan 
commitment to Mr. Quayle.  The letter to Omni was consistent with what Mr. Pitcher told 
the FS on June 10.  As confirmed by Mr. Pitcher, the committee did ultimately meet and the 
loan was approved.  By that point, the FS had already terminated the contract. 
As to the issue of whether Omni at the time of the termination had sufficient time to 
complete by December 31, 1997, the CO used July 5, 1997, as the latest date that appellant 
could begin construction so as to complete on time.  The CO based that on a rudimentary 
schedule that appellant had provided to the FS on May 12, 1997, in response to a request 
from the CO for a schedule. That schedule showed 180 days for construction but also stated 
that it was subject to acceleration “if the recorded date of the loan shifted.” The 180 days 
compared to prior representations from Omni to the FS, representations starting as early as 

     
   
       
  
      
  
  
 
  
  
       
 
  
 
 
 
 
 
  
 
  
10 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
May 1996, when Omni had provided the FS with an estimated construction time of 150 to 
180 days to complete the supervisor’s building.  In arguing in support of the default that 
Omni needed 180 days to complete construction, the FS did not give weight to Omni’s 
statement as to Omni’s willingness to accelerate, if needed.  Additionally, the evidence 
showed that neither the CO in issuing the default nor the FS in defending the appeal took into 
account that substantial site work (shown on the schedule) had already been completed as of 
the cure notice. Undisputed evidence showed that by late November 1996, although Omni 
still had not closed on the land where the supervisor’s building was to be sited, the site work 
for the supervisor’s building was close to completion and Omni needed but a day or two 
before it could start pouring the foundation.  The CO acknowledged that she knew that some 
site work had been conducted. Moreover, the evidence further showed that the FS did not 
appear to make any detailed analysis as to whether Omni had adequate time to finish, if the 
financing was provided at a date later than that demanded in the cure notice.  Further, at the 
hearing, it became clear that the FS reading of the schedule it had from Omni was unduly 
restrictive.  The evidence showed that the FS read the schedule to have each prior activity as 
a full constraint on the next, as opposed to having activities overlap.  However, there was no 
reason why once Omni completed framing in an area, it could not move on to the next 
activity in that space and continue framing in other areas. Overlap of many activities is the 
norm in construction, particularly on a building with more than one floor and with multiple 
rooms or areas.  Reading the schedule without overlap was neither warranted or logical. 
Finally, in the face of the termination, Mr. Stedman, then Omni’s counsel,  attempted to stem 
the default action.  In his telephone call to the CO of June 17, just prior to the termination, 
he told the CO that Omni had built a cushion of thirty days into the submitted schedule. 
Mr. Stedman offered to provide the CO with additional information showing how Omni had 
ample time to complete.  That offer further opened the door for a discussion and for a greater 
analysis of whether Omni could complete with later financing.  The CO indicated she was 
not interested.  She instead terminated the contract. 
In issuing its decision the AGBCA majority reviewed the various information as to 
what date was the outside date for Omni to begin.  The AGBCA majority concluded that 
work could have begun as late as August 4, 1997, taking into account various factors, 
including Omni’s original estimate of 150 to 180 days, Omni’s expressed intention to 
accelerate if needed, and the fact that most of the site work on the supervisor’s building was 
already completed. 
Omni appealed the default, which was docketed as AGBCA 97-203-1, and later filed 
a separate claim for damages, which also was denied by the FS.  Omni then appealed that 
claim, which was docketed as AGBCA 98-182-1.  The separate claims were then 
consolidated for processing purposes.   

 
       
 
 
 
 
 
 
 
 
          
  
  
 
 
   
  
   
11 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
In September 1999, the FS filed a motion for summary judgment, which was followed 
by a cross-motion from Omni. On June 29, 2001, the board issued a majority ruling (with 
a dissent) denying each party’s motion.  Omni Development Corp. , AGBCA  97-203-1, et al., 
01-2 BCA ¶ 31,487. 
On July 17, 2002, the parties engaged in unsuccessful mediation.  By letter of 
September 2, 2002, the FS made what it identified as an offer of judgment to Omni in the 
amount of $300,000.  Omni rejected it.  Thereafter, a hearing was held in Ogden, Utah, in 
July 2003, with the evidentiary record closing with final cross-examination in September 
2003. 
The AGBCA issued its decision on May 25, 2005, with the majority of the panel 
finding that the termination for default was not sustainable.  A dissent was filed.  Omni 
Development Corp. , 97- 203-1, et. al., 05-2 BCA ¶ 32,982.  On June 18, 2005, the FS filed 
a notice of appeal with the Court of Appeals for the Federal Circuit, and on September 23, 
2005, Omni cross-appealed.  The Court affirmed the board decision on September 19, 2006, 
without opinion.     
In the EAJA application filed in this case, there are no issues as to prevailing party, 
size, or other eligibility criteria.  Additionally, the FS has not challenged specific dollars 
claimed by appellant as to attorney fees and other expenses. The attorney fees being claimed 
are priced at the EAJA rate. Accordingly, the issue in dispute is whether the Government’s 
position as to entitlement and damages was substantially justified. 
Basis of majority denial of EAJA fees and costs 
My colleagues set out in their majority opinion on EAJA the basis of their denial. 
They acknowledge that breach was found by two of the three judges in the underlying 
decision, with the remaining judge dissenting.  I was part of the majority.  Judge Vergilio, 
who joins in the denial of EAJA fees and expenses, wrote a dissent on both entitlement and 
quantum.  In explaining the basis for denying EAJA fees and expenses in the matter now 
before the CBCA, my colleagues say as follows: 
For the reasons expressed in the dissents, the Government’s position of 
continued support of the termination for default was justified based on the 
record at various stages. Accordingly, we find that the Government’s position 
was substantially justified, i.e., justified in substance or in the main, or justified 
to a degree that would satisfy a reasonable person.  In so holding, we do not 
do so simply because one panel member issued dissenting opinions.  Rather, 
despite that panel member’s disagreements with the majority opinions, the 

 
     
 
    
 
  
             
     
    
 
  
    
   
   
 
   
12 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
detailed and reasoned factual and legal analysis of the dissenting opinion leads 
us to this conclusion. 
The majority decision to deny EAJA fees and expenses is based on conclusions drawn 
from what my colleagues describe as the “reasoned factual and legal analysis of the 
dissenting opinions,” there referring to the dissenting opinions of Judge Vergilio on both the 
merits and on summary judgment. Because they state that as the basis for finding the FS to 
have been substantially justified as to both entitlement and quantum, I find it necessary to 
respond to the rationale set out in those dissents, as well as explain my and the AGBCA 
majority position which resulted in denying the FS motion for summary judgment and 
granting judgment in favor of Omni on the merits. To do that, I will have to revisit, to some 
extent, the merits of the Omni case and significant factual and legal differences reflected in 
the AGBCA majority and dissenting opinions. Furthermore, an EAJA analysis must look at 
matters through a different lens than does a decision on the merits or on summary judgment. 
My conclusions on EAJA in both cases center on assessing substantial justification and are 
not reached solely because the AGBCA majority found the actions of the CO and FS to be 
wrong. 
AGBCA 97-203-1, entitlement 
Summary judgment 
The FS motion for summary judgment did not focus on establishing whether the CO 
complied with Lisbon.  While the FS contended that appellant did not have time to finish, the 
FS based the default and its arguments for summary relief on the contention that appellant 
did not comply with the demands of the cure notice.  Neither at the time it terminated, nor 
at the time the FS pursued summary judgment relief did the FS conduct or rely on a Lisbon 
analysis.  Moreover, the FS did not make a determination as to whether Omni would have 
had adequate time to complete, had the FS allowed Omni to meet the cure notice demands 
at a later date than the date demanded by the FS.  As the AGBCA majority pointed out in its 
summary judgment decision, Omni Development , 01-2 BCA ¶ 31,487, the FS rationale for 
default was set out by FS counsel in the FS opening brief.  In that brief, FS counsel said: 
Propriety of the termination does not turn on whether it was possible for Omni 
to perform but rather whether the Government received adequate assurances 
that timely completion would occur. 
Id. at 155,460. 

  
     
  
 
  
     
   
     
 
    
 
  
     
  
   
 
 
 
            
13 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
The AGBCA majority later summarized its understanding of the FS position on the 
motion and said: 
The FS has asserted that the Board should grant summary judgment because 
(1) Omni committed anticipatory repudiation by stating that it could not secure 
financing by the end of the FS imposed cure period, and (2) that Omni did not 
provide realistic and reasonable enough assurances to the CO that it could 
complete on time.  The FS relies on Danzig v. AEC Corp ., [224 F. 3d 1333 
(Fed. Cir. 2000)].  We disagree with how the FS understands the law and 
Danzig . 
01-2 BCA at 155,460. In supporting the conclusion that  Danzig was not applicable, the 
AGBCA majority pointed out that Danzig dealt with a much different factual situation than 
that in Omni and further said, “[T]o attempt to apply it here is not appropriate or warranted.” 
The AGBCA majority continued, 
While Danzig  involved a termination by the Navy of a contractor who was 
failing to make progress so as to endanger performance, the thrust of the court 
decision dealt with the legal effect of contractor statements and contractor 
actions which even taken in their best light for the contractor would not give 
the Government an assurance that it would complete in a timely manner. 
Further, the evidence in Danzig showed that the contractor was shutting down 
its operation as opposed to taking steps aimed at completion.  
Id. at 155,461. 
In Danzig , the contractor’s  response included a statement that financial strangulation 
by the surety not only had progressed to the point of preventing the contractor from meeting 
the completion date, but also had made it impossible for the contractor to predict an ultimate 
completion date at that time.  The contractor continued that unless the surety and its affiliates 
restrained themselves from the then-present conduct and released the funds currently sitting 
in the project’s bank account, the contractor doubted that it would ever be able to complete 
the project.  The AGBCA majority had no difficulty seeing the above as justifying a 
termination.  However, the AGBCA majority also had no difficulty concluding that Omni’s 
actions did not even approach the situation set out in Danzig . 
That view of the majority was further buttressed by the fact that Omni, unlike the 
contractor in Danzig , never indicated that it could not or would not finish. Instead, Omni 
made multiple assertions that it could and would complete on time and further offered, 

  
  
 
    
   
  
   
 
 
      
 
    
  
     
    
  
      
   
14 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
through Mr. Stedman, to provide whatever additional data the FS needed to show Omni had 
adequate time to finish. 
The AGBCA majority concluded, in assessing the FS motion, that the FS did not have 
confidence in Omni’s ability to deliver and terminated on that basis.  That said, however, the 
AGBCA majority found that the lack of confidence was not sufficient to justify a default, 
particularly, whereas in Omni , specific evidence showed that Omni could start well after the 
date set in the cure notice and still have ample time to complete by the finish date.  In 
coming to that conclusion, the AGBCA majority relied on the facts that Omni unequivocally 
stated to the FS that it could finish by the completion date, that the FS had corroboration 
through Equitable (the lender) that financing was only awaiting a meeting to be held the next 
week, and that Omni had provided the FS with a schedule (specifically highlighting 
acceleration if needed) which on its face indicated that Omni had adequate time to finish, if 
the financing came through as expected and as appeared likely.  Under these circumstances, 
reliance on anticipatory repudiation, “inadequate assurances,” or lack of confidence was 
found by the AGBCA majority not to be a reasonable or legally sustainable  basis for a 
default termination.  Under the controlling law in Lisbon, Omni did not have to prove the 
financing approval was absolute.  Rather, the legal test was whether the CO was reasonable 
in concluding that there was no reasonable likelihood that Omni could complete on time. 
Given Mr. Pitcher’s statement as to an expected approval for the loan and as discussed below 
given the clear evidence of ample time for construction, the FS position in defaulting and 
defending on summary judgment cannot be seen as reasonable, nor can its position on these 
same matters be classified as substantially justified.     
As I noted at the outset of this dissent, the majority states that it bases its 
determination to deny EAJA fees and costs on what it describes as the “reasoned legal and 
factual analysis of the dissent” in both the summary judgment and merits decisions.  With all 
due respect to my colleague who authored the dissent, I disagree with that characterization 
of his legal and factual analysis.  I conclude that the dissent applied the wrong legal 
principles and relied on factual conclusions not supported by the record.  Accordingly, the 
dissents in both AGBCA cases do not support a finding of substantial  justification.   
In the AGBCA dissent on summary judgment, the dissent described the legal issue as 
follows: 
The question before this Board is not whether the lessor could have provided 
the space on time. Rather, the question is whether the contracting officer 
reasonably concluded that the contractor, in response to the cure notice, failed 
to provide sufficient assurances  that it would complete on time. 

  
 
 
 
  
     
 
   
    
    
  
  
 
 
 
15 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
01-2 BCA at 155,468 (emphasis added).  In that same vein the dissent said:   
During the cure period and prior to the contracting officer issuing the disputed 
termination for default, the lessor informed the Contracting Officer that a loan 
commitment would be obtained, after, not within, the cure period.  Without 
financing, there was no assurance that the project would begin so as to enable 
the lease space to be competed on time.  The lessor’s failure to satisfy the 
contract requirement for financing, particularly given the unfulfilled earlier 
assurance by the lessor that financing was forthcoming, did not provide the 
contracting officer with the  requisite assurance that the lease would be 
satisfied.  The contracting officer’s decision to terminate for default was 
reasonable and justified.  
Id. at 155,468 (emphasis added). 
The common theme in the dissent was the lack of “adequate assurance” or “inadequate 
assurances.”  Meeting that standard and not the Lisbon test was identified as the standard 
under which to judge the appropriateness of the termination. The problem with using an 
“adequate assurances” test is that such a test is not the controlling law when the FS wishes 
to terminate a contractor for default due to failure to make progress.  This termination 
demanded and required that the FS conduct an analysis and make a decision following the 
criteria in Lisbon.   Because the dissent relied upon the wrong legal standard, I cannot find 
that it qualifies as a sufficient legal and factual analysis  so as to bootstrap the FS position 
into one that can be described as substantially justified.   
Turning to the FS position, during the summary judgment stage, the FS argued that 
the termination was justified under Danzig . Given the stark contrast in facts between what 
happened in Danzig, where the contractor made clear statements that completion was 
unlikely and in jeopardy, and what happened in Omni, where the contractor made multiple 
positive representations that it expected financing, but simply had to wait for the loan 
committee meeting, there is no basis to equate the Danzig decision to the Omni termination 
action.  Further, the FS failed to conduct a Lisbon analysis. Accordingly, I cannot conclude 
that one could sustain a finding of substantial justification on either the FS’s or the dissent’s 
reasoning and actions.  Finally, while not conclusive as to establishing a lack of substantial 
justification, I do point out that the Federal Circuit sustained the decision of the AGBCA 
majority. 
Before leaving the motion, one other point needs to be made.  The AGBCA majority 
decision on the motion included a clear statement by the majority that Danzig and a defense 
based on reasonable assurances was not going to prevail.  The AGBCA majority noted that 

    
 
     
  
 
 
  
 
     
    
     
  
    
 
16 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
on the record before it and for purposes of summary judgment, it had questions as to whether 
the CO had a reasonable basis to conclude that there was no reasonable likelihood that Omni 
could not complete by the completion date of December 31, 1997.  The majority concluded 
that the date used in the cure notice was not contractually specified, but rather unilaterally 
set by the CO and that  Danzig  did not apply to this situation. The AGBCA majority said: 
But for the FS argument of anticipatory repudiation (failure to provide 
adequate assurances) and Appellant’s contentions that the FS used defective 
default procedures, this appeal presents the classic default dispute over failure 
to make progress (failure to show due diligence), so as to endanger 
performance.  The law on failure to make progress is well settled.  The validity 
of a termination action essentially turns on whether the CO at the time of the 
termination had a reasonable basis to conclude that there was no likelihood 
that the contractor could complete on time. 
01-2 BCA at 155,459 (citing Lisbon, 828 F.2d at 765). With the above said, following the 
issuance of the board’s decision on summary judgment, the FS was on notice that to justify 
the termination, it had to meet the Lisbon test.  
The AGBCA majority decision to deny appellant’s cross-motion reflected the need 
to take all factual inferences in favor of the non-moving party.  Under that standard, the 
denial of Omni’s motion does not suggest that the AGBCA majority thought that the FS 
position on various facts would ultimately prevail.  All the denial established was that a trier 
of fact, on the record as then developed and taking all inferences in favor of the FS, could 
find in the FS’s favor.  Being able to prevail, when one has all inferences taken in one’s 
favor, is not a basis for finding substantial justification.  
Merits 
In defending on the merits, the FS still pursued the Danzig  argument of inadequate 
assurances. The FS also presented several other challenges, among which were whether the 
Equitable loan would have actually come through, whether Omni could secure the land and 
building permits, and whether Omni could complete if it started by July 5, 1997 (which the 
FS determined was the late start date).  Simply put, on all of those matters, the AGBCA 
majority found the FS evidence to be weak and not sufficient to prove the intended point. 
At the time of the termination all indications were that the loan would be approved, 
albeit a few days after the cure date created by the FS.  The likelihood of the approval of 
financing was corroborated by Equitable. Other witnesses, particularly from Sevier County, 
as well as a local realtor, confirmed that the land transfer and the building permit were not 

  
 
   
  
 
 
     
      
     
      
            
 
  
     
  
   
 
    
 
  
  
         
  
  
17 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
serious problems and would be resolved in plenty of time, upon the approval of financing. 
Had the CO not insisted on terminating because Omni did not meet the ten-day deadline she 
set, Omni would have likely had the financing and, with that in hand, adequate time to 
complete.  
The FS contended that even if Omni secured the financing, it would still have not had 
enough time to complete by the due date. The AGBCA majority again found the FS evidence 
weak in attempting to establish a lack of sufficient time to finish.  To support its position the 
FS relied on a statement by one of its engineers who challenged Omni’s assessment as to 
time needed.   However, this same engineer also acknowledged that a good contractor would 
have time to finish a building such as the supervisor’s building within six months.  That same 
engineer was also involved on the project when Omni made its initial submission of a 
schedule and that showed 150 to 180 days as the time needed to complete. That estimate of 
150 to 180 days was without acceleration. There was no evidence that the engineer had ever 
challenged that time estimate, and accordingly, the challenge at trial was found not to be 
convincing.  
Moreover, the engineer in his assessment did not include acceleration or take into 
account the fact that site work had essentially been completed.  The FS chose not to give 
credence to a clear statement in the last schedule provided by Omni which stated that the 
work could be accelerated if the closing date slipped. The FS did not give credence or effect 
to Mr. Stedman, who reiterated that Omni would accelerate and that the time on the schedule 
could be shortened.  The FS told Mr. Stedman that it did not need or want more information, 
even though he offered it in an attempt to thwart the default.  Further, the FS appeared not 
to understand the operation of stacking of trades and how many construction activities 
overlap and do not have to be fully completed before a subsequent activity could begin. Once 
again under Lisbon, Omni did not have to prove that it was a certainty that the contractor 
could finish on time if it received the financing when expected.   Instead, the FS had to show 
that even if Omni secured financing, Omni could not finish. The fact is that the evidence was 
overwhelming that Omni could have started as late as August 4, the late start date found by 
the majority, and still finished before December 31.  Had the financing been approved as 
expected (certainly not unlikely), the August 4 date could have been met.  Accordingly, the 
AGBCA majority decided that the default could not reasonably stand.  Omni Development , 
05-2 BCA ¶ 32,982. 
Because the majority in this EAJA matter bases the denial on reasoning in the dissent, 
I now address the dissent on the merits. The dissent in the merits case was not in lockstep 
with the dissent discussion on summary judgment, and in that regard did address Lisbon.   The 
dissent stated that in deciding compliance with Lisbon, the board could consider “the lessor’s 
failure to meet progress milestones and financial situation, and other pertinent circumstances 

  
 
 
 
 
 
 
 
  
              
   
   
 
    
     
  
 
 
  
18 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
surrounding the decision in order to determine whether the contracting officer had a valid 
basis for the conclusion.”  05-2 BCA at 163,462. 
I do not disagree with the AGBCA dissent on the above statement.  A contractor’s 
past track record and performance are relevant elements to consider under Lisbon.  I agree 
that a CO is tasked with weighing information as to whether the contractor can complete 
within the needed time frame and a past track record would be a factor.  However, where I 
diverge from the dissent is that I find that a past track record and past performance cannot 
reasonably justify a termination for failure to make progress when the material blocks 
necessary to perform by the completion date are in place.  Thus, since here (1) financing was 
expected within several days (corroborated by the lender, not just appellant), and (2) 
adequate time was left on the schedule to finish, the FS had to let the financing issue play out 
(for at least a few more days) before the FS could properly justify a termination.  As I see it, 
by emphasizing the need for adequate assurances so that the FS could be confident of 
completion, the dissent and the FS radically changed the test established by the court in 
Lisbon. 
Lisbon does not set as the test that the CO has to have a reasonable belief that the 
work will likely be completed.  Lisbon does not turn on the CO having to be confident that 
the work will be done.  Instead, it sets the test that the CO has to have a reasonable belief that 
there is no reasonable likelihood that the work can be completed. That analysis is the one 
that needs to be made before a CO can exercise the drastic sanction of termination in a case 
such as this. 
 Because the FS and dissent applied what I find to be the wrong standard, I conclude 
that there can be no finding of substantial justification. While the dissent recognized Lisbon, 
it tied that decision to “adequate assurances.”  That means that under the dissent, the CO can 
default a contract when he/she is not certain enough that the contract will be completed on 
time.  That is simply not the legal standard. 
Any fair reading of the record shows that the termination did not occur because the 
FS assessed and concluded that the contractor did not have enough time to finish.  Omni’s 
contract was terminated because the CO concluded that once she set a date for the financing, 
she had no obligation to extend that date, even if there was adequate time with an extension 
of the cure period for the work to be completed.  The CO had reached a level of frustration. 
That is reflected from the dissent on the merits, where my colleague stated,  
In short this termination for default must be upheld if the Government was 
justifiably insecure about the lessor’s ability to provide timely occupancy-­
unfulfilled promises, silence and failures to meet deadlines of the contract and 

   
  
    
 
     
 
 
    
  
19 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
schedule are relevant to the analysis, which need not focus on the remaining 
time to complete. 
05-2 BCA at 163,463 (emphasis added). 
Similarly, he stated,  
Without funding, this project would not be completed; performance was 
endangered.  The failure to obtain funding establishes a reasonable basis for 
concluding that there was inadequate assurance that this lessor could 
perform. 
Id. at 163,453 (emphasis added).  This theme continued and the dissenter defined what he 
believed was needed to comply with a “no reasonable likelihood test.”  The dissent stated: 
This contracting officer was not required to engage in discovery, depositions, 
or subject individuals to examination and cross-examination under oath.  The 
lessor had failed to satisfy promised dates for completion of given tasks, the 
contracting officer sought assurances, did not obtain those assurances , and 
reached a reasonable conclusion accordingly. 
Id. at 163,453 (emphasis added). Under the dissent’s reading, because Omni did not provide 
the assurances set out in the cure notice, that was sufficient to justify termination. That is 
incorrect law in this case. 
As to the amount to be recovered, the applicant has stated in an affidavit that 
$392,245.50 of its litigation costs are attributable to the entitlement issues.   The Government 
has not challenged that allocation or the specific costs or expenses from which that total is 
derived.  Applicant’s claim is at the statutory rate for attorney fees.  Accordingly, I would 
award $392,245.50.  
Damages 
Omni  stated in its application that $306,970.65 of its costs are for quantum litigation. 
That was approximately half of the total amount sought and according to applicant 
represented about half of its EAJA effort.  Applicant sought over $2 million for both lost 
income and reversionary value of the property.  It was awarded $204,000, all of that for 
reversionary value.  It received no recovery for lost income. 

  
   
 
  
 
  
     
   
    
 
  
 
 
 
  
 
  
 
 
 
           
 
20 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
The Government urges that we deny relief for attorney fees related to quantum.  First, 
it argues its position on quantum was substantially justified. Second, it contends that even 
if some relief is warranted, that sum should be significantly reduced to reflect the disparity 
between what was recovered and what was sought and if some recovery is allowed, we 
should not award more than ten percent of the claimed quantum costs and fees. Omni argues 
that it should get the full costs and fees because it received damages.  It argues that if an 
adjustment is to be made, that adjustment should be on a page allocation basis. 
The legal test for substantial justification is that the Government needs to show that 
in the main it was justified in denying and defending the quantum issues.  Pierce v. 
Underwood, 487 U.S. 552 (1988). I understand “in the main” to mean that we look at the 
totality of the issues and respective positions of the parties and determine if the Government 
was reasonable in defending in this case.  To be reasonable does not require a high degree 
of probability of success. The decision as to what is reasonable and substantial justification 
is one that is left to the discretion of the tribunal and allows the tribunal to consider all that 
was before it and assess matters on that basis. 
As a threshold matter, the quantum analysis involved in this case was complex and 
required significant clarification and explanation at the hearing. While there was some legal 
authority as to the operation of reversionary value as a damage in breach of a lease,  the 
authority was not extensive and consisted of state court decisions (not Utah) and federal 
court decisions relying on state laws.  The matter of  using and calculating reversionary 
interest in a breach of lease situation was novel in this government contract setting. 
Accordingly, the FS had substantial justification in making its arguments as to a lack of 
forseeability for the reversionary interest damages. 
With the above as a backdrop, but for deciding in favor of Omni as to the 
forseeability of the loss of  reversionary interest, the remainder of the AGBCA majority 
decision on quantum was generally based on and reflected the position of the Government 
and not that of Omni.  A substantial segment of the case on quantum focused on determining 
how to calculate the loss of the reversionary interest rather than on whether a reversionary 
interest was recoverable at all.  In fact, much of the Government’s presentation, and 
particularly that of Mr. Johnson and the Rigbys, centered on how one correctly calculates 
reversionary interest in a lease situation such as that here. Much of Omni’s quantum claim 
was not clear or relied on erroneous principles as to cost and calculation.  Various formulas 
were not clear until explained at the hearing by government witnesses or witnesses being 
challenged by Omni’s expert.  The AGBCA majority’s ability to fashion a remedy and to 
come to a comfort level as to the fairness of the award was primarily due to testimony of the 
Rigbys and Mr. Johnson and rejected much of what was offered by appellant’s expert.  The 
Government’s evidence and presentation focused on real estate valuations, while Omni’s 

  
             
 
 
 
 
 
 
 
  
 
   
  
   
 
  
   
  
 
   
  
 
21 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
expert and its claim generally relied on concepts which were neither applicable nor 
convincing in the real estate context.  
On a number of matters, such as the inclusion and valuation of sweat equity, the 
operation and amount of discount rates, the calculation of net operating income, the issue 
of present day value, and the use of an income approach rather than a cost approach, the 
AGBCA majority came down on the side of the Government and relied on the 
Government’s witnesses and explanations for conclusions.  Of course, there were some 
limited areas and individual matters where the AGBCA majority relied on appellant and 
found its evidence convincing.  However, “in the main,” the AGBCA majority rejected 
Omni’s approach at valuing the reversionary value, rejected its position on income, and in 
general concluded as it did on the basis of the alternatives presented by the Government. 
In appropriate instances, boards have denied recovery of EAJA costs and fees in 
instances analogous but not in lockstep to the situation here.  In Keno & Sons Construction 
Co., ENG BCA 5837-F, 99-1 BCA ¶ 30,273, the board pointed out that its decision reflected 
the complexity of applying the quantum calculations offered by each party regarding the 
appropriate equitable adjustment.  The board said that the resolution of quantum required 
a detailed weighing of considerable financial and operations data and decisions concerning 
opposing proof and calculation theories.  In explaining its denial of applicant’s EAJA claim, 
the board noted that “[T]he complexity of the numerous issues concerning quantum leads 
us to the conclusion that the Corps was reasonably justified in not accepting at face value 
Keno’s financial and accounting data regarding Keno’s actual costs or Keno’s estimate of 
the ‘should cost’ amount offered in support of its equitable adjustment request.” Id. at 
149,708. 
In Overflo Public Warehouse, Inc., PSBCA 4531, et. al., 06-1 BCA ¶ 33,160 (2005), 
the board found that it was reasonable for the Government to have resisted appellant’s 
adjustment claim, noting that appellant’s entitlement to an economic adjustment only 
became clear through evidence presented at the hearing.  Accordingly, even though the 
board allowed the contractor’s claim, it found the position of the Government to be 
substantially justified.   
In C.H. Hyperbarics, Inc., ASBCA 49375, et. al., 05-2 BCA ¶ 32,989, the board said 
that where a contractor’s effort to prove quantum is seriously lacking, the Government is not 
obligated to attempt to assemble the appropriate figures and the Government’s position 
requiring proof as to entitlement on specific claimed problems, on causation, and on 
reasonableness of the amount claimed has been held to be substantially justified. 
Additionally, the board took the position that EAJA recovery was not allowable on some 

 
   
 
 
 
   
  
 
   
       
  
 
 
     
         
   
     
       
      
  
   
22 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
entitlement issues, citing as the basis the fact that the recovery was awarded on an 
independent basis, rather than on the basis presented by the contractor.  
Keno and Overflo both present situations where EAJA recovery was denied because 
the dollar presentations by the appellants were found to lack sufficient detail and support. 
Both boards found that the absence of sufficient detail and support justified a finding that 
the Government’s position in defending was substantially justified.  Hyperbarics differs 
from those cases in that it deals with entitlement.  However, the case reiterates the principle 
that when a contractor achieves its desired results, but does not do so based on or through 
the theories it presented, the tribunal can conclude that the Government was substantially 
justified in defending. Here, given the dollars being sought by Omni and the weakness of 
its calculations and theories, the Government was substantially justified in defending as to 
the reversionary interest claim being asserted by Omni.   
A portion of the Omni appeal involved issues surrounding the cost to construct the 
building.  In the majority decision, value was ultimately based on the projected loan from 
Mr. Hancey, as we found that a better measure than the cost projections and subcontractor 
estimates presented by Omni.  As to the evidence presented on anticipated costs, Omni’s 
number changed as to many items. Moreover, what was being submitted was estimates of 
projected costs or future subcontracts. This was not a matter where the Government could 
simply go through the cost records and verify expenditures or values.  Although many of the 
differences in work item values were explained at the hearing, it was not until those 
explanations were made that some of the numbers made sense.  Accordingly, what the 
Government had before it was of such a nature that there was not sufficient information or 
support to allow it to make a reasoned determination, with any certainty, as to what it would 
have cost Omni to construct the building. Accordingly on issues surrounding the value of 
the building, the Government was substantially justified.  
While the Government may well have not expected to pay zero, the fact is that it was 
reasonable in defending the quantum because appellant was seeking in excess of two million 
dollars and the information before the Government did not support that figure or anything 
close.  Further, the quantum case is not one containing multiple cost centers or separate 
claims that I could comfortably parse out. There were two quantum issues, lost income and 
reversionary interest.  I am certain that the applicant can point out instances where it 
prevailed on a specific cost item or quantum issue; however, to the extent that is the case, 
those instances are dwarfed by other issues and particularly the issues surrounding how one 
calculates reversionary interest and lost income. 

   
   
             
 
   
  
   
 
  
 
   
 
 
  
   
  
  
 
 
 
23 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
In arriving at my conclusion as to substantial justification in defending quantum, I 
am directed by the wording in Pierce that we are to look at the Government’s position in the 
main.  When I do that on damages, I find the FS met the substantial justification standard. 
Special circumstances 
The Government has contended that award of EAJA fees should be denied due to 
special circumstances, citing 5 U.S.C. § 504(a)(2). It states that the amount expended by 
Omni far exceeds what it recovered in the judgment and that Omni refused to accept an offer 
of judgment of $300,000, which represented more than that to which Omni was entitled. 
The Government presents a September 2, 2002, letter to Omni where it offered $300,000. 
The Government points out that after the date of the offer, Omni expended $329,079.87 in 
potential EAJA fees and costs, not including preparation of the EAJA application. 
The Government is urging the Board to deny relief using the rationale expressed in 
Federal Rule of Civil Procedure 68.  That rule in pertinent part basically provides that if an 
offer is made and the judgment finally obtained is not more favorable than the offer, the 
offeree must pay the costs incurred after the offer. 
As appropriately cited by the Government, the Federal Rules of Civil Procedure are 
not binding upon a board of contract appeals. However, boards do look to the rules for 
guidance. Moreover, a number of boards have considered settlement offers in assessing 
EAJA applications.  See McTeague Construction Co. v. General Services Administration, 
GSBCA 15479-C(14765)-R, 01-2 BCA 31,462, aff’d on reconsideration, 01-2 BCA 
¶ 31,526.  
As set forth in the Federal Rules, a critical element in denying relief because of an 
offer of judgment is that the offer made is more favorable than the relief recovered.  Here 
there are two problems with meeting that threshold.  First, the letter offers a dollar figure but 
does not offer to withdraw the termination for default. That may have been the intent, but 
it is not reflected in the letter. Second, while a tribunal will look at the amount awarded and 
that offered, we also need to take into account the absence of fees in the offer.  Using the 
Government’s own number, by the time of the settlement offer, Omni had already incurred 
over $300,000 in legal fees.  Thus, had Omni taken the offer, Omni would have at best 
covered its legal fees, with nothing left for the recovery itself.  When faced with a similar 
situation in Prowest Diversified, Inc. v. United States , 39 Fed. Cl. 276 (1997), the court 
denied the Government’s motion for costs.  In justifying its claim for recovery of fees 
against Prowest, the Government stressed that it had made an offer of judgment of $58,000 
and the court awarded $46,476.  In explaining its denial of the Government’s motion, the 
court added to the judgment, secured by Prowest, the amount of pre-offer attorney fees 

  
  
____________________________ 
24 CBCA 609-C(AGBCA 97-203-1), 610-C(AGBCA 98-182-1) 
Prowest had already incurred.  When those fees were combined with the offer of judgment 
submitted by the Government, the combined total exceeded the Government’s offer.  As 
such, the court ruled against the Government.  
Accordingly, in order to consider an offer of judgment defense, the Board needs not 
only to consider whether the judgment awarded is commensurate with the potential liability, 
but also to take into account what has been incurred in pursuing the case to that point.  Here, 
given the above, I do not find the offer of judgment approach valid in this application.  
HOWARD A. POLLACK 
Board Judge