* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3.

1 After examining the briefs and appellate record, th is panel has determined unanimously to grant the parties’ request for a dec ision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. 

## F I L E D United States Court of Appeals Tenth Circuit 

### MAY 10 1999 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v. LOREN DALE SHOOP,

Defendant-Appellant. No. 98-6240 (D.C. No. 96-CV-1065) (W.D. Okla.)

ORDER AND JUDGMENT *

Before PORFILIO , McKAY , and LUCERO , Circuit Judges.

Pursuant to the Federal Workforce Restructuring Actof 1994, defendant Loren Dale Shoop took early retirement from the Fed eral Aviation Administration (FAA), in exchange for a voluntary separation incentive payment of $25,000. 1 After his retirement, Shoop began work for a company called LB&M, which-2-

contracted out Shoop’s services to the FAA. The go vernment brought suit against defendant, alleging that his return to work at the FAA within five years of his retirement violated the terms of his buyout agreeme nt and the Restructuring Act. The district court entered judgment in favor of Sho op, finding that the contract under which Shoop was working was not administered as a personal services contract and, therefore, that he did not violate hi s buyout agreement or the Restructuring Act. As the prevailing party, Shoop filed a motion for attorney fees pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412. The district court denied the motion because it found the position of the United States was substantially justified. Shoop now appeals the den ial of his motion for attorney fees. We review the district court’s determination that the position of the United States was substantially justified for an abuse of discretion. See Pierce v. Underwood , 487 U.S. 552, 559, 563 (1988). Guided by this st andard, we affirm. The EAJA provides in pertinent part that “a court s hall award to a prevailing party other than the United States fees . . . incurred by that party in any civil action . . . brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified.” 28 U.S.C. § 2 142. To be substantially justified, the litigation position of the United St ates must be “justified to a degree2 For purposes of this case, a personal services contract “means a contract

that, by its express terms or as administered, make s the contractor personnel appear, in effect, Government employees.” 48 C.F.R . § 37.101. -3- that could satisfy a reasonable person.” Pierce , 487 U.S. at 565. “[T]he test of substantial justification is essentially one of rea sonableness in both law and fact.” United States v. 2,116 Boxes of Boned Beef , 726 F.2d 1481, 1486 (10th Cir. 1984). The burden is on the government to show its position is substantially justified. See Gilbert v. Shalala , 45 F.3d 1391, 1394 (10th Cir. 1995). To meet that burden, it must “show that there is a reasonab le basis in truth for the facts alleged in the pleadings; that there exists a reaso nable basis in law for the theory it propounds; and that the facts alleged will reaso nably support the legal theory advanced.” 2,116 Boxes of Boned Beef , 726 F.2d at 1487. Whether or not Shoop violated the buyout agreement and the Restructuring Act turned on whether the contract under which the FAA gained his services after his retirement was a personal services contract. 2 The district court concluded that it was not, but the district court also found that the government’s litigation position to the contrary was substantially justifie d. We must now determine whether the district court abused its discretion in finding that the government’s litigation position was substantially justified. T he fact that the government’s position did not prevail in the district court is n ot determinative of substantial3 The relevant regulation, 48 C.F.R. § 37.104, provid es that:

(c)(1) An employer-employee relationship under a se rvice contract occurs when, as a result of (i) the contract’s term s or (ii) the manner of its administration during performance, contracto r personnel are subject to the relatively continuous supervision an d control of a Government officer or employee. However, giving an order for a specific article or service, with the right to reje ct the finished product or result, is not the type of supervision or contro l that converts an individual who is an independent contractor (such a s a contractor employee) into a Government employee. (2) Each contract arrangement must be judged in the light of its own facts and circumstances, the key question always be ing: Will the Government exercise relatively continuous supervisi on and control over the contractor personnel performing the contra ct? The sporadic, unauthorized supervision of only one of a large num ber of contractor employees might reasonably be considered not relevant, while relatively continuous Government supervision of a s ubstantial number of contractor employees would have to be tak en strongly into account (see (d) below). (d) The following descriptive elements should be us ed as a guide in assessing whether or not a proposed contract is per sonal in nature: (1) Performance on site. (2) Principal tools and equipment furnished by the Government. (3) Services are applied directly to the integral e ffort of agencies or an organizational subpart in furtherance of assigne d function or mission. (4) Comparable services, meeting comparable needs, are performed (continued...) -4- justification. See United States v. Charles Gyurman Land & Cattle Co. , 836 F.2d 480, 483 (10th Cir. 1987). The government’s audit investigating whether this w as a personal services contract focused on the issue of supervision. 3 The record shows that in the course3 (...continued)

in the same or similar agencies using civil service personnel. (5) The need for the type of service provided can r easonably be expected to last beyond one year. (6) The inherent nature of the service, or the mann er in which it is provided reasonably requires directly or indirectly , Government direction or supervision of contractor employees inorder to-- (i) Adequately protect the Government’s interest; (ii) Retain control of the function involved; or (iii) Retain full personal responsibility for the f unction supported in a duly authorized Federal officer or employee.

-5- of the government audit, the investigators gained e vidence that FAA employees were, in fact, supervising Shoop on a consistent ba sis. Shoop and FAA employees stated at one point during the audit thatDalinda Wall, an FAA employee, supervised Shoop. At trial, however, the evidence on this point was conflicting. The investigators testified that, dur ing their audit, they were told that FAA employees supervised Shoop and that their observations were consistent with that scenario. Dalinda Wall testified at tria l that she did not supervise Shoop. She denied ever having told the investigato rs otherwise. The record also shows that several FAA documents indicating that Sh oop’s contract did not violate the Restructuring Act were created only aft er the audit had begun. The record shows a reasonable basis in fact for the government’s litigation position that Shoop was operating under a personal services contract. Therefore, the district court was well within its discretion i n finding that the government’s-6-

litigation position was substantially justified. A FFIRMED. The motion to supplement the record is GRANTED.
ENTERED FOR THE COURT

Carlos F. Lucero Circuit Judge