Principles of Federal Appropriations Law - US Government ...

. Hiring of Attorneys by
Government Agencies
Chapter 4
Availability of Appropriations: Purpose
B-189045, Jan. 26, 1979. To illustrate, a vendor who successfully filed a
claim for the payment of goods sold and delivered to a Navy vessel was not
entitled to reimbursement of attorney’s fees. B-187877, Apr. 14, 1977.
Similarly nonreimbursable were legal fees incurred incident to prosecuting
a claim for damages for breach of an oral agreement. B-188607, July 19,
1977. “Fairness” and “decency,” however appealing, do not compensate for
the lack of statutory authority. 67 Comp. Gen. 574, 576 (1988); 57 Comp.
Gen. 856, 861 (1978).
Payments to attorneys also arise in a number of situations that are, strictly
speaking, not applications of the American Rule, that is, which do not
involve payment of fees to a “prevailing party.” The approach in these cases
is to look first for statutory authority and if express statutory authority
does not exist, apply the various principles discussed throughout this
publication, such as the necessary expense doctrine.
For example, a private attorney sought reimbursement for out-of-pocket
expenses he incurred incident to a “special proceeding” initiated by the
Nuclear Regulatory Commission (NRC) to investigate charges of
misconduct raised by the attorney against NRC staff members and by the
staff members against the attorney. There was no statutory authority to
reimburse the attorney, nor could the payment be justified as a necessary
expense since it was not reasonably necessary to carrying out NRC
functions. Therefore, payment was unauthorized. B-192784, Jan. 10, 1979.
In another case, the Small Business Administration (SBA) could not
reimburse a bank for legal fees the bank incurred in protecting its interest
in an SBA-guaranteed loan since SBA neither contracted with the attorney
nor did it benefit from his services. B-187950, Apr. 26, 1977.
The Justice Department has held that legal fees incurred by a Cabinet
nominee in connection with Senate confirmation hearings, for services
rendered before the nominating administration took office, could be paid
either from Presidential Transition Act appropriations or from private
sources. 5 Op. Off. Legal Counsel 126 (1981).
The remainder of this section will discuss the situations that have been
most commonly addressed in decisions of the Comptroller General.
During the first century of the Republic, government agencies who needed
lawyers either as counsellors or litigators simply went out and hired them.
Not only was this system expensive (payments from the public treasury are
not conducive to reduced fees), it resulted in inconsistencies in the
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