United States Court of Appeals 

for the Federal Circuit 

__________________________ 

DGR ASSOCIATES, INC., 

Plaintiff-Appellee, 

v. 

UNITED STATES, 

Defendant-Appellant, 

and 

GENERAL TRADES & SERVICES, INC., 

Defendant. 

__________________________ 

2011-5080 

__________________________ 

Appeal from the United States Court of Federal 

Claims in case no. 10-CV-396, Judge Thomas C. Wheeler. 

__________________________ 

Decided: August 2, 2012 

__________________________ 

DARCY V. HENNESSY, Hennessy, Boe & Gondring, P.A., 

of Mission, Kansas, argued for plaintiff-appellee. With 

her on the brief was LESLIE A. BOE. 

STEVEN M. MAGER, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department 

of Justice, of Washington, DC, argued for defendantappellant. With him on the brief were TONY WEST, Assis-
DGR ASSOCIATES v. US 2

tant Attorney General, JEANNE E. DAVIDSON, Director, 

and PATRICIA M. MCCARTHY, Assistant Director. 

__________________________ 

Before RADER, Chief Judge, PLAGER, and WALLACH, 

Circuit Judges. 

PLAGER, Circuit Judge. 

This case involves a dispute over whether a party who 

prevailed in a bid protest against the United States is 

entitled to an award of attorneys’ fees and costs under the 

Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412. 

The Court of Federal Claims determined that the 

Government’s position in the underlying bid protest was 

not substantially justified, and awarded attorneys’ fees, 

costs, and expenses.1 However, given the then-existing 

disagreement among all three branches of the Federal 

Government over the law applicable to this bid protest, 

we conclude that the Court of Federal Claims erred in 

finding that the United States’ position was not 

substantially justified, and accordingly reverse. 

I. The Bid Protest Case 

To understand the issues in the litigation over the 

EAJA award, it is necessary first to understand the issues 

in the original bid protest litigation.2 The relevant facts 

are set forth at length in the Court of Federal Claims’ bid 

protest opinion, DGR, 94 Fed. Cl. at 193-199, and need 

not be repeated here. For purposes of this attorneys’ fee 

dispute, a brief summary will suffice. 

 1 DGR Assocs. Inc. v. United States, 97 Fed. Cl. 214 

(2011) (“EAJA opinion”). 

2 DGR Assocs., Inc. v. United States, 94 Fed. Cl. 189 

(2010) (“bid protest opinion”). 
3 DGR ASSOCIATES v. US

A. Legal and Regulatory Background 

The Small Business Act (“the Act”) establishes various 

programs that assist qualifying small businesses in 

obtaining Federal contracts, and sets forth the 

requirements incident thereto. 15 U.S.C. §§ 631-657. 

Two of the programs are involved in this case: the socalled Section 8(a) Program (§ 637(a)(1)(B)), which assists 

small businesses owned and controlled by socially and 

economically disadvantaged individuals, and the 

HUBZone Program (§ 657(a)), which assists small 

businesses that are located in historically underutilized 

business zones. Among its requirements, the Act 

mandates that each Government agency establish annual 

contracting goals for the various small business programs 

created by the Act, including these two. Id. § 644(g)(1). 

The Small Business Administration (“SBA”) is 

charged with carrying out the requirements of the Act and 

issuing such rules and regulations as it deems necessary. 

Id. §§ 633(a), 634(b). In its regulations the SBA decreed 

that there should be “parity” between the 8(a) and 

HUBZone programs. By so decreeing, the SBA gave the 

Federal agencies’ contracting officers substantial 

discretion to consider and designate contracts for either 

program without having to prioritize one program over 

the other. See, e.g., 13 C.F.R. §§ 124.503(j), 125.18, 

126.605, 126.607. Whether this parity policy is consistent 

with the terms of the Act itself lies at the heart of the 

dispute in this case. 

B. Factual Background 

In December 2009, the Air Force solicited bids for a 

service contract for Eielson Air Force Base in Alaska. 

Appellee DGR had previously performed the requested 

services pursuant to a contract that expired that year. 

Because the Air Force had not yet satisfied its contracting 
DGR ASSOCIATES v. US 4

goal under the 8(a) program for fiscal year 2009, the Air 

Force announced that it would award the contract 

pursuant to a section 8(a) competition. 

DGR however requested that the Air Force instead set 

aside the contract for qualified HUBZone small business 

concerns rather than for 8(a) program participants. In 

support of its position, DGR cited a decision from the 

Government Accountability Office (“GAO”), Mission 

Critical Solutions, B-401057, 2009 CPD ¶ 9 (Comp. Gen. 

May 4, 2009), which concluded that the Small Business 

Act gave priority to the HUBZone program over the 8(a) 

program. (The GAO is an administrative arm of the 

Congress assigned various missions, including a role in 

the bid protest process.) 

The Air Force nevertheless declined DGR’s request, 

citing in opposition to the GAO ruling an August 2009 

memorandum from the Department of Justice (“DOJ 

memorandum”) that was issued in reaction to the GAO’s 

Mission Critical decision. The DOJ memorandum 

reviewed the Act, the SBA’s parity regulations, and the 

GAO decision, and concluded that the Act does not compel 

prioritization of the HUBZone program over the 8(a) 

program; that SBA’s parity regulations are based on a 

permissible interpretation of the Act; and that the GAO 

decision is not binding on Executive Branch agencies 

while the DOJ memorandum is. 

DGR then filed a formal agency-level protest, which 

the Air Force in due course denied. In its denial the Air 

Force, in addition to referencing the DOJ memorandum, 

also cited a July 2009 memorandum from the Office of 

Management and Budget (“OMB memorandum”) that was 

issued also in reaction to the GAO’s Mission Critical

decision and which directed Executive Branch agencies to 

continue to follow SBA’s parity regulations. 
5 DGR ASSOCIATES v. US

Pursuant to the established appeal procedures, DGR 

next filed its protest with the GAO; not surprisingly the 

protest was sustained by the GAO despite the contrary 

Department of Justice and OMB directives. DGR Assocs. 

Inc., B-402494, 2010 CPD ¶ 115 (Comp. Gen. May 14, 

2010). The GAO confirmed the interpretation it had 

reached in Mission Critical that the terms of the statute 

specifically prioritized the HUBZone program over the 

8(a) program. The GAO further noted that the Court of 

Federal Claims had affirmed that interpretation in 

Mission Critical Solutions v. United States, 91 Fed. Cl. 

386 (2010). The Air Force was told to rebid the contract 

consistent with the GAO reading of the Act. 

However, again not surprisingly, the Air Force 

declined to comply with the GAO’s conclusion, citing the 

OMB and DOJ memoranda and, in addition, a May 2010 

memorandum from the Department of Defense (“DOD 

memorandum”) instructing that the OMB memorandum 

continues to reflect Executive Branch policy. The Air 

Force further cited a March 2010 Department of Justice 

memorandum, which concluded that the Court of Federal 

Claims’ decision in Mission Critical applied only to the 

specific contract at issue in that case and not to the 

operation of SBA’s parity rules more generally. 

The Air Force subsequently awarded the competitive 

8(a) contract to General Trades & Services, Inc, after 

which DGR timely filed suit in the Court of Federal 

Claims protesting the bid award and seeking to invalidate 

the award. 

Before the Court of Federal Claims, the Government 

presented two arguments in response to DGR’s suit: (1) as 

a jurisdictional matter, DGR waived its right to bring suit 

by not filing its court action prior to the closing date for 

receipt of proposals; and (2) on the merits, the statute did 
DGR ASSOCIATES v. US 6

not require the Air Force to prioritize the HUBZone 

program over the 8(a) program. 

The trial court rejected the Government’s 

jurisdictional argument, noting that it was “directly at 

odds with government policy to seek resolution of protests 

within the agency.” DGR, 94 Fed. Cl. at 203. Regarding 

the Government’s merits argument, the court saw “no 

need to modify the detailed, analytical and persuasive 

reasoning of the Chief Judge” in the Mission Critical case, 

and affirmed the conclusion that the Act itself gave 

priority to the HUBZone program over the 8(a) program. 

Id. at 205. Accordingly, the court upheld DGR’s bid 

protest, thus invalidating the contract award to General 

Trades & Services; the trial court subsequently awarded 

attorneys’ fees and costs under the EAJA to DGR. 

Although it does not affect the issues in this case, not long 

after, Congress abrogated the Court of Federal Claims’ 

merits decisions in DGR and Mission Critical by 

amending the Small Business Act to clarify that the 

HUBZone program does not take priority over the 8(a) 

program. Pub. L. No. 111-240, 124 Stat. 2504 (Sept. 27, 

2010). 

II. The Attorneys’ Fees Issue—The Case Before Us 

A. Legal Background 

The EAJA provides that, when a timely application is 

filed, an eligible prevailing party shall be awarded 

attorneys’ fees and other expenses incurred by that party 

in any civil action brought by or against the United States 

“unless the court finds that the position of the United 

States was substantially justified . . . .” 28 U.S.C. 

§ 2412(d)(1)(A). The purpose of the Act is to ensure that 

litigants “will not be deterred from seeking review of, or 

defending against, unjustified governmental action 
7 DGR ASSOCIATES v. US

because of the expense involved.” Scarborough v. 

Principi, 541 U.S. 401, 407 (2004). 

B. Factual Background 

DGR timely filed its application for attorneys’ fees 

and costs under the EAJA based on its successful bid 

protest against the Air Force in the Court of Federal 

Claims. DGR, 97 Fed. Cl. at 217. As noted, that court 

ruled that DGR was entitled to attorneys’ fees and 

associated costs because the Government’s position in the 

bid protest was not substantially justified. Id. at 217-20. 

Specifically, the court held that the Government’s 

jurisdictional argument “was patently unreasonable, and 

not substantially justified,” and that the Government’s 

merits-based argument also “was not reasonable” in view 

of the “unambiguous wording of the statute, and the 

existing case law precedent.” Id. at 219. The court 

awarded DGR $37,227.72 in attorneys’ fees, costs, and 

expenses, comprised of attorneys’ fees for 210 hours at an 

hourly rate of $175 based on a cost of living adjustment, 

and $477.72 in costs and expenses. Id. at 220-21. The 

Government appeals the award. We have jurisdiction 

pursuant to 28 U.S.C. § 1295(a)(3). 

DISCUSSION

We review an award of attorneys’ fees and expenses 

under the EAJA for abuse of discretion. Pierce v. 

Underwood, 487 U.S. 522, 558 (1988). To constitute an 

abuse of discretion, a court must either make a clear error 

of judgment in weighing relevant factors or exercise 

discretion based upon an error of law. Sciele Pharma Inc. 

v. Lupin Ltd., No. 2012-1288, 2012 WL 2520908, at *3 

(Fed. Cir. July 2, 2012). 

The sole issue on appeal is whether the Government’s 

position in the underlying bid protest litigation was 
DGR ASSOCIATES v. US 8

substantially justified. A position is substantially 

justified if it is “justified to a degree that could satisfy a 

reasonable person.” Pierce, 487 U.S. at 565. The 

Government’s “position” includes both the underlying 

agency action that gave rise to the civil litigation and the 

arguments made during the litigation itself. 28 U.S.C. 

§ 2412(d)(1)(B), (2)(D); Comm’r, INS v. Jean, 496 U.S. 

154, 161-62 (1990); Patrick v. Shinseki, 668 F.3d 1325, 

1330 (Fed. Cir. 2011). We address the Government’s 

positions at each stage of these proceedings. 

I. Agency Action 

The Court of Federal Claims’ EAJA opinion does not 

discuss the Air Force’s actions at the agency level so we do 

not have the benefit of the court’s view. It is perhaps not 

unreasonable to infer, consistent with that court’s overall 

position, that it found the Government’s actions not 

substantially justified during that stage of the 

proceedings as well. 

On appeal, DGR supports that position with its 

argument that, because the SBA’s parity regulations were 

contrary to the plain language of the Act, it was unlawful 

for the Air Force to apply those regulations. We cannot 

agree. In the first place, substantive regulations 

governing an agency’s activities have the “force and effect 

of law” and are binding not only on parties outside the 

agency, but also bind the agency itself. Coal. for Common 

Sense in Gov’t Procurement v. Sec’y of Veterans Affairs, 

464 F.3d 1306, 1317 (Fed. Cir. 2006). Indeed, it is a “wellestablished legal principle that a federal agency must 

comply with its own regulations.” Army & Air Force 

Exch. Serv. v. Sheehan, 456 U.S. 728, 733 (1982). 

The SBA’s parity regulations, which had been in effect 

since 1998 and that placed the HUBZone and 8(a) 

programs on an equal footing, were fully applicable to the 
9 DGR ASSOCIATES v. US

Air Force and mandated the Air Force to proceed 

consistent with those regulations unless and until they 

were declared invalid by a court of competent jurisdiction. 

When a District Court having such authority was 

confronted with the potential conflict between a previous 

version of the SBA’s parity regulations and an argument 

that the Act’s language gave priority to the HUBZone 

program, the court declined to invalidate the parity 

regulations. Contract Mgmt., Inc. v. Rumsfeld, 291 F. 

Supp. 2d 1166, 1176-77 (D. Haw. 2003), aff’d on other 

grounds, 434 F.3d 1145, 1148 (9th Cir. 2006) (noting that 

although the plaintiff had challenged the SBA’s parity 

regulations in the district court, it did not do so on 

appeal). And although the subsequent decisions from the 

GAO and the Court of Federal Claims took positions 

against the validity of the SBA’s parity regulations, 

neither has the authority to invalidate properlypromulgated regulations of an Executive Branch agency. 

See 31 U.S.C. §§ 3551-3556 (establishing GAO jurisdiction 

over bid protests); Lion Raisins, Inc. v. United States, 416 

F.3d 1356, 1370 n.11 (Fed. Cir. 2005) (noting “no APA 

review is available in the Court of Federal Claims”). 

The Air Force was bound by the DOJ, OMB, and DOD 

memoranda instructing Executive Branch agencies to 

continue to comply with the SBA’s parity regulations 

notwithstanding the GAO and Court of Federal Claims’ 

contrary positions. In view of the Air Force’s legal 

obligation to place the HUBZone and 8(a) programs on an 

equal footing during the procurement phase of these 

proceedings, we conclude that the Government’s position 

in support of the Air Force’s actions were substantially 

justified at the agency level. 
DGR ASSOCIATES v. US 10

II. The Litigation 

The next question then is whether the United States 

was substantially justified in defending in court the Air 

Force’s decision to comply with those regulations. As 

earlier noted, the Government presented both a 

jurisdictional argument and a merits-based argument 

during the litigation phase of this case. We first address 

the Government’s main argument on the merits of 

whether the Small Business Act gives priority to the 

HUBZone program over the 8(a) program, and then turn 

to the Government’s subsidiary jurisdictional argument. 

A. The Government’s Merits-Based Argument 

In the underlying bid protest, the Government argued 

that the Small Business Act and the SBA’s implementing 

regulations did not require the Air Force to give priority 

to HUBZone small business concerns. DGR, 97 Fed. Cl. 

at 218. The Court of Federal Claims rejected the 

Government’s position because in the court’s view the 

Government’s interpretation of the Act “contradicted the 

plain meaning of the Small Business Act.” Id. at 219. In 

the subsequent EAJA action, the Government argued that 

its position in the bid protest litigation nevertheless was 

substantially justified because “interpretation of the 

statute was a novel issue . . . .” Id. The Court of Federal 

Claims rejected the Government’s justification argument, 

holding that “the unambiguous wording of the statute, 

and the existing case law precedent” rendered the 

Government’s merits-based argument in the underlying 

litigation “not reasonable.” Id. 

We cannot agree. While the Government’s position 

must be “more than merely undeserving of sanctions for 

frivolousness,” it is sufficient for purposes of establishing 

substantial justification that there was a “genuine 

dispute” such that “reasonable people could differ as to 
11 DGR ASSOCIATES v. US

[the appropriateness of the contested action].” Pierce, 487 

U.S. at 565-66 (alteration in original) (citation omitted). 

At the time DGR initiated the underlying bid protest, 

presumptively reasonable people in all three branches of 

the Government had reached differing conclusions as to 

whether the Small Business Act permitted participating 

agencies to place the HUBZone and 8(a) programs on an 

equal footing. 

Of the various Government agencies to opine on the 

matter, the Small Business Administration, the 

Department of Justice, the Office of Management and 

Budget, and the Department of Defense all considered the 

SBA’s parity regulations to be consistent with the Act. 

The opposite conclusion had been reached by the 

Government Accountability Office in four separate 

decisions in three separate bid protests.3 

Even the Federal courts were split on the matter. 

Although the Court of Federal Claims in Mission Critical

had concluded that the SBA’s parity regulations were 

inconsistent with the plain meaning of the Act, the 

District Court for the District of Hawaii had rejected a 

challenge to the regulations on the grounds that the 

regulations “sufficiently promote the congressional 

objective of parity between the HUBZone and 8(a) 

programs.” Contract Mgmt., 291 F. Supp. 2d at 1177.4 

 3 Int’l Program Grp., Inc., B-400278, B-400308, 

2008 CPD ¶ 172 (Comp. Gen. Sep. 19, 2008); Mission 

Critical Solutions, B-401057, 2009 CPD ¶ 9 (Comp. Gen. 

May 4, 2009); Small Bus. Admin.—Reconsideration, B401057.2, 2009 CPD ¶ 148 (Comp. Gen. July 6, 2009); 

DGR Assocs. Inc., B-402494, 2010 CPD ¶ 115 (Comp. Gen. 

May 14, 2010). 

4 We note, however, that the District Court’s conclusion in Contract Management regarding the SBA’s 

parity regulations is difficult to reconcile with the court’s 

ultimate conclusion that the Small Business Act “man-
DGR ASSOCIATES v. US 12

Thus, at the time DGR filed its bid protest in the Court of 

Federal Claims, there was a genuine dispute among all 

three branches of Government as to whether the Air Force 

was required to give priority to the HUBZone program 

over the 8(a) program. 

That alone should be sufficient reason to conclude 

that the Department of Justice’s merits-based argument 

in the underlying litigation was, if not actually correct, at 

least sufficiently grounded in law to be substantially 

justified under the relatively low threshold standard 

described above. There is more. Though the 

Congressional resolution of this issue came after the 

litigation in the Court of Federal Claims, there had been 

an earlier indication of the Congress’ view of the matter. 

Following the GAO’s Mission Critical decision, the Senate 

proposed amending the Act to clarify that when a contract 

could be awarded pursuant to more than one small 

business program, Federal agencies have discretion as to 

which program to apply. See H.R. 2647, 111th Cong. 

§ 838 (July 23, 2009) (Engrossed amendment Senate). 

While the amendment was under consideration in the 

House, the Department of Justice issued its 2009 

memorandum in reaction to the GAO’s Mission Critical

decision. 

One and a half months later, the Senate receded, 

noting “that the Department of Justice has concluded that 

no change to the Small Business Act is required to ensure 

that contracting officers . . . have discretion whether or 

not to award contracts pursuant to the HUBZone 

program,” and “direct[ing] the Secretary of Defense to 

continue to administer the HUBZone program in a 

 

date[es] that participating agencies set aside contract 

opportunities to qualified HUBZone small business concerns when the statutory criteria are met.” Id. at 1174. 
13 DGR ASSOCIATES v. US

manner consistent with the Department of Justice 

opinion.” H.R. Rep. No. 111-288, at 789 (2009). 

In view of this clear statement from Congress 

affirming the SBA regulations at issue, it is difficult for us 

to conclude that the Government was not substantially 

justified in believing that the Small Business Act 

permitted participating agencies to place the HUBZone 

and 8(a) programs on an equal footing. We conclude, 

therefore, that the Court of Federal Claims made a clear 

error of judgment in weighing the factors relevant to the 

question of whether the Government’s merits-based 

argument was substantially justified. 

B. The Government’s Jurisdictional Argument 

Whether the Government was substantially justified 

in its jurisdictional argument presents a considerably 

closer call, and if it were the primary issue in this case the 

Government might well lose on that call. Lawyers for the 

Department of Justice will sometimes lard their briefs on 

appeal with thinly-grounded jurisdictional objections to 

this court (or the trial forum) considering the particular 

appeal on its merits. If successful, it avoids the 

Government having to address the merits of the cause; 

however, such jurisdictional dodges are not always well 

grounded, and thus not always, or even often, successful. 

Here, the Government argued that the Court of 

Federal Claims lacked jurisdiction over DGR’s bid protest 

because DGR did not file suit until after the closing date 

for receipt of proposals. DGR, 97 Fed. Cl. at 218. Though 

the argument is fundamentally counterintuitive since 

court suits usually follow the conclusion of administrative 

action rather than precede it, the Government supported 

its argument with some language from an earlier opinion 

of this court in Blue & Gold Fleet L.P. v. United States, 

492 F.3d 1308, 1313 (Fed. Cir. 2007): 
DGR ASSOCIATES v. US 14

[A] party who has the opportunity to object to the 

terms of a government solicitation containing a 

patent error and fails to do so prior to the close of 

the bidding process waives its ability to raise the 

same objection subsequently in a bid protest action in the Court of Federal Claims. 

The Court of Federal Claims summarily rejected the 

Government’s position, noting that to do otherwise “would 

have parties running into the Court of Federal Claims to 

challenge solicitation errors, instead of pursuing other 

[administratively] available avenues.” DGR, 97 Fed. Cl. 

at 218. To avoid such an outcome, the court held that: 

The correct interpretation of Blue & Gold Fleet is 

that, if a party has challenged a solicitation impropriety before the close of the bidding process, 

the party is not precluded from later filing its protest at the Court of Federal Claims. A party must 

do something before the closing date to preserve 

its rights, and must thereafter pursue its position 

in a timely manner.

Id. 

On appeal, the Government urges that its jurisdictional argument was substantially justified because Blue 

& Gold Fleet inferentially tied the waiver rule to the 

Court of Federal Claims’ statutory grant of jurisdiction, 

thereby implying that the rule was jurisdictionally preclusive. But we agree with the Court of Federal Claims 

that the Government’s jurisdictional argument has little 

merit. 

In Blue & Gold Fleet the point made is straightforward—if there is a patent, i.e., clear, error in a solicitation 

known to the bidder, the bidder cannot lie in the weeds 

hoping to get the contract, and then if it does not, blind-
15 DGR ASSOCIATES v. US

side the agency about the error in a court suit. The trial 

court aptly noted that reading more into the statement 

such as the Government was doing would be inconsistent 

with the principle of exhaustion of administrative remedies. 

In the briefs and argument before this court the jurisdictional issue was a minor part of both the Government’s 

case and DGR’s response—in their principal briefs the 

Government devoted three pages to it (pp. 42-44), and 

DGR four (pp. 15-18); the focus was on the merits case. 

By itself, it is questionable whether we would hold the 

Government’s jurisdictional argument in this case substantially justified. When viewed in the overall context, 

as we are required to do, see Jean, 496 U.S. 154, 161-62 

(1990) (“While the parties’ postures on individual matters 

may be more or less justified, the EAJA—like other feeshifting statutes—favors treating a case as an inclusive 

whole, rather than as atomized line-items”), we conclude 

that the Government’s position in this case was “justified 

to a degree that could satisfy a reasonable person,” which 

is all the Supreme Court and this court require. Pierce, 

487 U.S. at 565; White v. Nicholson, 412 F.3d 1314, 1315 

(Fed. Cir. 2005). 

Beyond that, “a position can be justified even though 

it is not correct, and . . . it can be substantially (i.e., for 

the most part) justified if a reasonable person could think 

it correct . . . .” Pierce, 487 U.S. at 566 n.2. In this case, 

the Government has in its favor at least one reasonable 

mind that had come to the same view as the Government 

regarding our statement in Blue & Gold Fleet. See

Easterhill Boat Serv. Corp. v. United States, 91 Fed. Cl. 

483, 487 (2010) (“The appeals court [in Blue & Gold Fleet]

could have allowed contractors to file agency-level protests to preserve their pre-award claims, or to object in a 

manner other than by filing suit in federal court. Instead, 
DGR ASSOCIATES v. US 16

the court ruled that a contractor wishing to object to 

terms of a solicitation must file suit in the Court of Federal Claims before the bidding process ends, or not at 

all.”). 

Viewing the Government’s conduct in this case in its 

entirety, we are persuaded that the Court of Federal 

Claims abused its discretion when it concluded that the 

Government’s position was not substantially justified. 

During the agency stage of these proceedings, the Air 

Force was bound by law to follow the SBA’s parity 

regulations. And during the subsequent litigation the 

Government was justified in defending the Air Force’s 

actions in view of the genuine dispute among all three 

branches of the Government over whether the Act 

prioritized the HUBZone program over the 8(a) program. 

Though the Government’s jurisdictional argument 

may have been less defensible than its merits-based 

argument and would have been better omitted, we 

conclude that as a whole the Government’s basis for 

litigating its case was substantially justified. The 

question before us is not whether DGR had a reasonable 

case to bring, or even whether the Government’s position 

on the law proved to be correct. It is whether the 

Government was substantially justified in pursuing its 

overall view of the case in light of the then-state of the 

law. We think it was, and the EAJA provides for feeshifting only when it was not. 

CONCLUSION

The Court of Federal Claims’ decision to award DGR 

attorneys’ fees and costs under the EAJA is reversed. 

REVERSED