Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-05070/USCOURTS-ca13-14-05070-0/pdf.json

Parties Involved:
Innovation Development Enterprises Of America, Inc.
Appellant
United States
Appellee

Document Text:

NOTE: This disposition is non-precedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

INNOVATION DEVELOPMENT ENTERPRISES OF 

AMERICA, INC.,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee.

______________________ 

2014-5070

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 1:11-cv-00217-LJB, Judge Lynn J. Bush.

______________________ 

Decided: January 12, 2015

______________________ 

CHARLES K. CRAIN, of Tulsa, Oklahoma, for plaintiffappellant. 

ELIZABETH ANNE SPECK, Trial Attorney, Commercial 

Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, for defendantappellee. With her on the brief were STUART F. DELERY, 

Assistant Attorney General, ROBERT E. KIRSCHMAN, JR., 

Director, and DEBORAH A. BYNUM, Assistant Director. Of 

counsel was KATY M. BARTELMA, Trial Attorney. 

Case: 14-5070 Document: 44-2 Page: 1 Filed: 01/12/2015
2 INNOVATION DEVELOPMENT v. US

______________________ 

Before DYK, O’MALLEY, and TARANTO, Circuit Judges.

O’MALLEY, Circuit Judge. 

Innovation Development Enterprises of America, Inc. 

(“IDEA”) appeals the final decision of the United States 

Court of Federal Claims (“CFC”) denying its claim for bid

preparation and proposal costs in its entirety. Because 

we agree with the CFC that IDEA is not entitled to recover any costs, and that IDEA is, therefore, not a prevailing 

party under the Equal Access to Justice Act (“EAJA”), we 

affirm. 

I. BACKGROUND

The contract award challenged in this suit was for 

support services for the Air Force’s Command Man-Day

Allocation Systems (“CMAS”). In the mid-1990’s, an 

internal Air Force team, which included Lawrence A. 

Crain (“Crain”), developed CMAS. In 1999, the Air Force 

hired an outside contractor to further develop CMAS and 

provide support services for CMAS. The Air Force selected Harris IT Services Corp. (“Harris”) for the initial 

contract. In 2004, Harris also won the second contract for 

CMAS services. From 1999 until 2007, Harris subcontracted with IDEA to provide support services. Crain is 

the sole proprietor of IDEA. 

After Harris stopped subcontracting with IDEA, 

Crain began to explore the notion of IDEA entering bids

for the next CMAS support contract. The Air Force, 

however, extended the second CMAS contract with Harris 

for six months in a sole-source bridge contract to bridge 

the gap between the second CMAS support contract and 

another five-year contract. The Air Force did not solicit 

any proposals from any other contractors for the solesource bridge contract and no other contractor submitted 

a proposal. 

Case: 14-5070 Document: 44-2 Page: 2 Filed: 01/12/2015
INNOVATION DEVELOPMENT v. US 3

Crain protested the award of the sole-source bridge 

contract with the Air Force and the Government Accountability Office. After those protests failed, IDEA filed a bid 

protest at the CFC on April 7, 2011. On January 29, 

2013, the CFC found that the sole-source bridge contract 

was improper and that IDEA had shown that it had been 

prejudiced. At that time, the sole-source bridge contract 

had already been fully performed and the successor 

contract had already been awarded. The CFC, therefore, 

denied IDEA’s claims for injunctive relief as moot. 

The CFC did allow IDEA to submit supplemental 

briefing as to whether it was entitled to bid preparation 

and proposal costs, as well as attorney fees under the 

EAJA. On January 17, 2014, the CFC concluded that 

IDEA was not entitled to compensation for any of its 

claimed costs. Innovation Dev. Enters. Of Am., Inc. v. 

United States, 114 Fed. Cl. 213 (2014). The CFC first 

found that IDEA did not submit a proposal and did “not 

allege that a draft proposal was ever prepared.” Id. at 

222. Based on these findings, the CFC explained that: (1) 

there is no support in the Federal Acquisition Regulation

for a claim for bid preparation costs when no draft proposal has been prepared and no proposal has been submitted; (2) although costs may be recovered for unsolicited 

proposals, IDEA did not prepare or submit an unsolicited 

proposal; and (3) recovery of costs must be based on law, 

not equity. The CFC further concluded that, even if IDEA 

could recover bid preparation and proposal costs when it 

did not draft or submit a proposal, none of its claimed 

costs were recoverable under the statute. According to 

the CFC, all of IDEA’s claimed activities were directed at 

business planning, networking, training, or marketing. 

Finally, the CFC found that the hours and rates claimed 

were not reasonable, particularly based on the description 

of the tasks. Because the hours and the rates were not 

reasonable, the CFC concluded that, even if IDEA’s claims 

were recoverable, “a significant portion of that claim 

Case: 14-5070 Document: 44-2 Page: 3 Filed: 01/12/2015
4 INNOVATION DEVELOPMENT v. US

would be rejected as unreasonable and excessive.” Id. at 

225. 

Ultimately, the CFC concluded that, because IDEA 

did not obtain monetary or injunctive relief, it was not a 

prevailing party entitled to recovery of attorney fees 

under the EAJA. 

IDEA timely appealed. Because this is an appeal 

from a final decision of the CFC, we have jurisdiction

under 28 U.S.C. § 1295(a)(3) (2012). 

II. DISCUSSION

On appeal, IDEA argues that the CFC erroneously 

decided that there is “no recovery when no bid was submitted” and that the “‘act of submitting a bid’ is always 

essential. Appellant’s Br. 11–12. IDEA contends that it 

should receive “just and proper reimbursement for its presolicitation bid preparation costs” because the Air Force 

refused to allow any bids for the sole-source bridge contract. Id. at 13. IDEA further insists that the number of 

hours it is requesting for reimbursement is very modest 

and there is independent evidence supporting its claims. 

Although it never prepared a draft proposal, IDEA insists 

that its pre-solicitation actions were recoverable and 

reasonable, including: (1) pre-drafting elements to go in

the proposal, including “ABOUT CMAS” and “ABOUT 

IDEA” sections; (2) contacts with the contracting office; 

and (3) checking for the bid posting online. Joint Appendix (“J.A.”) 68–72. According to IDEA, moreover, the CFC 

was wrong in valuing Crain’s labor at $0/hour and that 

there were a number of possible acceptable rates the CFC

could have adopted. Finally, IDEA asserts that the CFC 

wrongly rejected its claim for attorney fees under the 

EAJA because the Air Force clearly broke the law and the 

EAJA is designed to protect companies like IDEA. 

The government responds that the burden is on the 

protestor to adequately demonstrate reasonable and 

Case: 14-5070 Document: 44-2 Page: 4 Filed: 01/12/2015
INNOVATION DEVELOPMENT v. US 5

recoverable costs in a bid protest case. According to the 

government, the CFC correctly concluded that IDEA was 

not entitled to bid preparation costs because it did not 

submit or prepare a proposal. The government contends 

that the CFC also correctly concluded that all of IDEA’s 

costs were not properly characterized as bid preparation 

and proposal costs. Because the CFC is not a court of 

equity, the government asserts that CFC correctly found 

that there is no basis in law for IDEA’s monetary claims. 

According to the government, moreover, the CFC properly 

concluded that all of IDEA’s costs are unsupported, not 

reasonable, and excessive. Finally, the government 

argues that, based on binding precedent, the CFC properly rejected IDEA’s EAJA claim. 

We review the CFC’s decisions de novo for errors of 

law and for clear error for findings of fact. Ind. Mich. 

Power Co. v. United States, 422 F.3d 1369, 1373 (Fed. Cir. 

2005).

A. Bid Preparation and Proposal Costs

By statute, if a party is successful in a bid protest 

case, “the [CFC] may award any relief that the court 

considers proper, including declaratory and injunctive 

relief except that any monetary relief shall be limited to 

bid preparation and proposal costs.” 28 U.S.C. 

§ 1491(b)(2) (emphasis added). Although § 1492(b)(2) does 

not define bid preparation and proposal costs, courts often 

turn to the Federal Acquisition Regulation (“FAR”) provisions for guidance in interpreting the statute. See Coflexip & Servs., Inc. v. United States, 961 F.2d 951, 953 (Fed. 

Cir. 1992) (referring to the federal regulations to define 

proposal preparation costs).

The pertinent FAR provision states in relevant part: 

“Bid and proposal (B&P) costs means the costs incurred in 

preparing, submitting, and supporting bids and proposals 

(whether or not solicited) on potential Government or nonGovernment contracts.” 48 C.F.R. § 31.205-18(a) (2012). 

Case: 14-5070 Document: 44-2 Page: 5 Filed: 01/12/2015
6 INNOVATION DEVELOPMENT v. US

We agree with the CFC that IDEA is not entitled to 

recover any costs because IDEA did not submit or prepare 

a bid proposal.1 The statute clearly limits monetary relief 

available to “bid preparation and proposal costs,” 28 

U.S.C. § 1491(b)(2). It is undisputed that IDEA never 

submitted a proposal, whether solicited or unsolicited. 

The CFC further found that IDEA did not even allege that 

it prepared a draft proposal. We see no clear error in this 

finding. Although IDEA argues that it drafted materials 

about CMAS and IDEA that it intended to put in the 

proposal, a review of those materials indicates that they 

were clearly used in an email to the Air Force before any 

bid was posted. See J.A. 68–72. 

IDEA’s equitable argument is unpersuasive because 

the plain language of the statute states that “any monetary relief shall be limited to bid preparation and proposal 

costs.” 28 U.S.C. § 1491(b)(2) (emphasis added). Furthermore, IDEA’s assertion that the number of hours it 

claims is very modest misses the point. Monetary relief, 

no matter how “modest,” is not available except for bid 

preparation and proposal costs.

Because we conclude that IDEA cannot recover any 

costs when it did not submit or prepare a bid proposal, we 

affirm the CFC’s decision to deny IDEA’s claim for costs 

in its entirety. 

B. IDEA’s EAJA Claim

The EAJA provides that “a court may award fees and 

expenses of attorneys . . . to the prevailing party in any 

civil action brought by or against the United States or any 

agency or any official of the United States acting in his or 

her official capacity in any court having jurisdiction of 

1 Because this conclusion is sufficient to affirm the 

CFC’s opinion, we decline to address IDEA’s remaining 

arguments.

 

Case: 14-5070 Document: 44-2 Page: 6 Filed: 01/12/2015
INNOVATION DEVELOPMENT v. US 7

such action.” 28 U.S.C. § 2412(b) (emphasis added). In 

Farrar v. Hobby, 506 U.S. 103 (1992), the Supreme Court 

defined “prevailing party”: “a plaintiff ‘prevails’ when 

actual relief on the merits of his claim materially alters 

the legal relationship between the parties by modifying 

the defendant’s behavior in a way that directly benefits 

the plaintiff.” 506 U.S. at 111–12. We have generally 

adopted this meaning of prevailing party in “all cases in 

which Congress has authorized an award of fees to a 

‘prevailing party.’” Singer v. Office of Senate Sergeant at 

Arms, 173 F.3d 837 (Fed. Cir. 1999) (quoting Hensley v. 

Eckerhart, 461 U.S. 424, 433 (1983)).2 

In this case, the CFC correctly rejected IDEA’s claim 

for EAJA because IDEA was not a prevailing party entitled to recovery of attorney fees. IDEA did not receive an 

injunction and recovered no money damages. Therefore, 

IDEA did not receive any actual relief that “materially 

alters the legal relationship between the parties.” Farrar, 

506 U.S. at 111–12. 

Because IDEA is not a prevailing party, we conclude 

that the CFC properly denied recovery of attorney’s fees 

under 28 U.S.C. § 2412(b).

III. CONCLUSION

For the foregoing reasons, we affirm the decision of 

the CFC. 

AFFIRMED

2 In Singer, this court concluded that the plaintiff 

was not the prevailing party because, despite the finding 

that he had a disability, the decision “entitle[d] him to no 

benefits beyond the accommodations the [Agency] already 

gave him due to his alcoholism, which this court determined in the preceding discussion to be insufficient to 

make him a ‘prevailing party.’” Id. at 842.

 

Case: 14-5070 Document: 44-2 Page: 7 Filed: 01/12/2015