June 11. 1986
Appeal of
HUNTER L. TODD, d/b/a
COURIER EXPRESS MAIL & PACKAGE
DELIVERY SERVICE
UNDER CONTRACT NO. HCR 48160
PSBCA No. 1472
APPEARANCE FOR APPELLANT
Hunter L. Todd
APPEARANCE FOR RESPONDENT
Maria T. Robinson, Esq.
OPINION OF THE
BOARD
This appeal is from a Contracting
Officer's final decision terminating Appellant's highway transportation
contract for default because of unsatisfactory performance. Only the propriety of the default termination
is in issue.
Finding of Fact
1.
Respondent, United States Postal Service, awarded advertised contract
HCR 48160 on June 14, 1985,
to Appellant, Hunter L. Todd d/b/a Courier Express Mail and Package Delivery
Service, for a term from July 1, 1985,
to June 30, 1989 (Appeal
File (AF) Tab A, p. 4). The contract
required Appellant to furnish two single axle tractors and a minimum of three
40' tandem axle trailers with at least 2,400 cubic feet of usable space,
capable of maintaining the stated schedule with maximum load (AF Tab A, p. 8). The schedule required appellant to transport
mail several times each day between Detroit
and Ann Arbor, Michigan
at stated arrival and departure times (AF Tab A, p. 7). Certain trips had scheduled intermediate
stops at Ypsilanti, Michigan
and the Detroit Air Mail Facility (id.).
2.
The contract incorporated PS Form 7407 (Oct. 1981) titled "Basic
Surface Transportation Services Contract General Provisions." Clause 2 of those provisions contains the
standard "Claims and Disputes" language (AF Tab A, p. 18); Clause 4, "Service Requirements and
Prohibitions," required the contractor to carry all mail tendered for
transportation "with certainty, celerity, and security, in accordance with
the operating schedule" (AF Tab A, p. 19);Clause 16, "Termination by
the Postal Service for Default," authorized termination in the public
interest for, inter alia, "Contractor's failure to perform
service according to the terms of the contract" (AF Tab A, p. 25), and in
subparagraph (c) provided that, if it is determined the contractor was not in
default or the default was excusable, the parties' rights and obligations would
be the same as if a termination for convenience had been issued under Clause 17
(AF Tab A, p. 26); and Clause 17, "Termination for Convenience"
allows the contractor as an indemnity the liquidated damages amount specified
in Clause 12 (c) (AF Tab A, p. 26).
3.
The first two days of Appellant's performance under the contract were
beset with difficulties and failures (see Tr. 16, 18, 47). Nine reports of contract route irregularities,
PS Form 5500 (5500), were issued for trips on July 1, 1985, and seven were issued for July 2, 1985 (A Tab E, pp.
69-84). For the most part, the
irregularities were for late arrivals, although three of them involved omitted
service (id.). Of the various
5500s issued for July 1-2, four were erroneously issued for the reasons
indicated below:
(1) July
1, Trip 104, late, 15 minutes (AF Tab E, p. 70). A leeway of 15 minutes is allowable, and under existing U.S. Postal Service practices should not be the subject of a
5500 (See Tr. 185-86, 272).
(2) July
1, Trip 112, late, 2 flat tires (AF Tab E, p. 74).
This duplicates AF Tab
E, p. 72 for the same trip.
(3) July
2, Trip111, late arrival at AMF (AF Tab E, p. 81).
This is duplicative of
previous 5500 (AF Tab E, p. 80).
(4) July
2, Trip 112, omitted service at AMF (AF Tab E, p. 83).
This is duplicative of
previous 5500 (AF Tab E, p. 82).
Additionally, one of the trips
(#112) on July 1, 1985, was
delayed because of two flat tires, after the tires had been previously replaced
the same day by a reputable tire company (See Tr. 229-30). This delay was not due to Appellant's fault
or negligence, and was excusable.
Except for those indicated above,
however, the remainder of the 5500s for those two days, six for July 1 and five
for July 2, were validly issued and represent serious deficiencies in contract
performance.
4.
A meeting was held in the early afternoon of July 2, 1985, between Appellant and Respondent's
representatives, and Appellant was advised to take immediate action to assure
satisfactory service (AF Tab D, p. 55-a; Tr. 15-18, 74-75, 142-43).
5.
Performance continued to be deficient on the following days. Appellant failed to provide service for two
trips on July 3; a trip arrived two hours late, and an unsatisfactory vehicle
was used on a trip on July 4; and again omitted service of a scheduled trip
occurred on July 5 (AF Tab E, pp. 86-90).
Late service occurred on two trips on July 6 (AF Tab D, p. 60).
6.
On July 8, 1985, a request
was made to the Contracting Officer by officials at the Detroit General Mail
Facility that Appellant's contract be terminated due to unsatisfactory
performance (AF Tab D, pp. 60-61; Tr. 20, 92, 159).
7.
The Contracting Officer held a formal conference with Appellant on July 9, 1985 (AF Tab D, p. 59). Appellant was advised of the recommendation
for termination and problems were discussed (id.). Appellant was informed by the Contracting
Officer that he was being allowed to continue, and was given until July 13, 1985, to correct all
contract irregularities (id.).
8.
In a letter dated July 15, 1985,
the Contracting Officer identified certain problems that continued to exist,
including omitted service on trips occurring on July 11, 12 and 13 (AF Tab D, p.
58; see also AF Tab E, pp. 92-95, 97-99). One of the five 5500s issued on July 11, AF
Tab E, p. 96, is duplicative and will not be considered as establishing a
contract irregularity. Because of the
service failures reflected in the 5500s issued on July 11-13, a formal warning
was issued on July 15, giving Appellant until July 19, 1985, to perform according to the terms of the
contract (AF Tab D, p. 58). It was
indicated by the Contracting Officer that continued failures could result in
termination for default (id,; Tr. 81).
9.
The Contracting Officer in a final decision dated September 3, 1985, notified Appellant of his
decision to terminate the contract for default, effective August 30, 1985, finding that during the period
since the letter of warning of July
15, 1985, Appellant's service had not improved to a level
acceptable to Respondent (AF Tab C, pp. 46-47).
10. Following July 15, 1985, the record reveals four violations
or irregularities for the remainder of the month of July, three of which involved
late service of 30 minutes or less (AF Tab E, pp. 100-102, 104). Appellant in his replies to these 5500s does
not dispute their validity or offer excusable reasons for the irregularities (id.,
Tr. 162-65). One of the 5500s for July 27, 1985 (AF Tab E, p. 103)
represents duplication, see Tr, 164-65. One of the 5500s for July 27, 1985 (AF Tab E, p. 103) represents
duplication, see Tr, 164-65, and is not considered a violation. During the month of August 1985, several more
reports of late service were filed. On
August 4, Trip 101X is shown as 30 minutes late (AF Tab E, p. 105). On August 9, an unidentified trip is shown on
a 5500 as 20 minutes late; the driver is identified as Hines (AF Tab E, p.
106). On August 12, late service of 40
minutes is reported respecting Trip 101X and 1 hour, 5 minutes for Trip 104 (AF
Tab E, pp. 107-08). On August 14, Trip
112 is shown as 45 minutes late (AF Tab E, p. 109). On August 15, late service of 35 and 30
minutes, respectively, was reported for Trip 107 and Trip 108 (AF Tab E, p.
110-11). On August 16, there were four
reported occurrences of late service respecting Trip 101X (1 hour, 10 minutes),
Trip 102X (1 hour, 5 minutes), Trip 105 (20 minutes), and Trip 106 (25 minutes)
(AF Tab E, pp. 112-15). On August 22, a
report shows Trip 105T to have been 2 hours, 55 minutes late (AF Tab E, p.
116). On August 16, late service of 33
minutes was reported for Trip 106 (AF Tab E, p. 118).
11. Of the 5500s issued in August,
Appellant provided a reply on the forms for only three of the fourteen issued,
and responded to none after August 12,
1985 (Tr. 165-70). The only
reply that appears to raise an issue of excusable delay is found on the 5500
issued for August 4, 1985 (30 minutes late arrival), to the effect that the driver
was unable to remove a BMC container that had been improperly placed in the
trailer by a Postal worker (AF Tab E, p. 105; Tr. 165). The late arrival violation was noted at the
Detroit General Mail Facility, the first stop for this trip which originated in
Ann Arbor (See AF Tab D, p.
62). The delay was not excusable since
the difficulty in removing allegedly improperly placed equipment would have no
bearing on the arrival time at the first stop (See Tr. 197, 199). The alleged deficiency (20 minutes late)
represented by the 5500 issued on August
9, 1985 (AF Tab E, p. 106), which fails to list a trip number and
carries the name of a driver not associated with Appellant, has not been
established by a preponderance of the evidence (Tr. 199-201, 248-49). The 45-minute late arrival on August 14 (Trip
112) (AF Tab E, p. 109) occurred because a rented vehicle would not reach
speeds beyond 40 miles per hour (Tr. 237-38, 271-72).
12. One of Respondent's contract
administration procedures was to provide late slips to contractors for delays
caused by Postal employees so that a Form 5500 (Report of Contract Route
Irregularity) would not be issued against the contractor (Tr. 59, 273-74). During the first week of contract performance
Appellant complained to Respondent's Administrative Officer at the Detroit Post
Office that Postal employees in Ann Arbor
were improperly refusing to issue late slips to his drivers (see Tr.
58-59, 62-63, 234-235). Corrective
action was taken in the form of contacting appropriate officials at the Ann
Arbor Post Office and supplying a number of late slip forms (Tr. 59,
62-63). Thereafter, there were no
further complaints from Appellant that the problem continued to exist (Tr.
62-63). No indication of a problem with
late slips appears in the contractor's reply section of any 5500 issued after
July 2. Appellant also complained to the
Contracting Officer that the 5500 forms were not being properly prepared, but
an investigation revealed no merit to the complaint (Tr. 100-02). Additionally, a number of questionable 5500s
issued against Appellant had been cancelled by Respondent's Administrative
Officer at the Detroit Post Office (Tr. 272).
13. The forty-one valid Form 5500s
represent substantial deficiencies and irregularities in contract performance
which were not excusable and adversely impacted Respondent's mail operations
(Tr. 16, 22-24, 75-77, 82-85, 173-74).
Some seventeen documented deficiencies were recorded and proved for the
period after the official warning of July
15, 1985.
14. Over the past seven years
Appellant was the only Black contractor to have been awarded the Detroit-Ann
Arbor highway transportation contract (Tr. 93).
Appellant had been awarded two other highway transportation contracts in
the Detroit area (Tr. 11, 16-18,
142, 263-64, 272). For the most part
Appellant found the Postal workers to be polite and reasonable, but problems in
communications were experienced (Tr. 221, 252, 266-68, 272). Appellant testified of unfair treatment and
racial prejudice (Tr. 252, 261-63).
There is no evidence in the record, other than Appellant's unsupported
allegations, that there was any racially motivated discrimination against
minority owned firms or against Appellant specifically. Moreover, there is no evidence that
Respondent's representatives in administering Appellant's contract took any
improper actions with the intention of hampering Appellant's performance
efforts.
15.
Appellant testified that a gasoline hose on one of his vehicles while in
Ann Arbor had been cut by Postal
employees, which resulted in the loss of a quantity of gasoline on August 28, 1985 (Tr. 261-62, 291; see
also AAF Tab E, pp. 119-20; App. Exh. No. 6). Appellant's driver did not corroborate
Appellant's contention that the gas line had been cut, but thought it had been
pulled away from the tank (Tr. 240-41).
The appearance of the physical exhibit (App. Exh. No. 6) is not
consistent with its being cut. There is
no credible evidence that Postal employees caused the damage (see Tr.
262). There is no allegation by
Respondent of any contract deficiencies for August 28, 1985.
The problem with the gasoline line had no effect on Appellant's
performance, and if any delays resulted, they were not charged against
Appellant.
16. After Appellant's contract was
terminated, the successor contractor for the Ann Arbor
route was a company known as Campbell & Sons or Campbell Brothers (Tr.
93). The Campbell Company had been
awarded other contracts in the Detroit
area (Tr. 111-12). There is no evidence
that the successor contractor on the Detroit-Ann Arbor route has been treated
with favoritism or required to adhere to lesser performance standards. Other than the unsupported allegations of
Appellant, there is no evidence of improprieties in awarding highway
transportation contracts in the Detroit
area.
Decision
Respondent contends the default
termination should be sustained because of the numerous incidents of
inexcusable late performance and poor quality of service, as established by the
evidence in the record.
Appellant seeks to have the default
termination converted to a termination for convenience and to recover the
liquidated damages provided in Clauses 17 and 12(c) of the General
Provisions. Appellant disputes many of
the late arrivals charged against him, which he bases on the alleged failure or
refusal of Respondent's employees to issue late slips.
The evidence in this appeal
establishes that Appellant's performance under his contract to transport mail
between Detroit and Ann
Arbor was unsatisfactory and below the standard
specified in the contract. This is
documented by numerous deficiencies and irregularities throughout July and
August 1985, until the contract was terminated.
Appellant's performance commenced July 1, 1095, with the first two days
being marred by an extremely large number of serious contract deficiencies
(Finding 3). Unsatisfactory performance
continued over the first half of July 1985, during which Appellant was
notified, counseled and warned through meetings and correspondence that unless
improvements were made, his contract would be terminated. Following the Contracting Officer's warning
of July 15, 1985, the
record establishes numerous deficiencies and irregularities in contract
performance, including omitted service and late arrivals throughout the
remainder of July and August 1985, until termination occurred.
In reviewing the evidence we have
disregarded those seven Form 5500s that we found were of questionable validity
(findings 3, 8, 10, 11). Additionally,
with respect to one other Form 5500, we have found the reported violation to be
excusable (Finding 3). We find no
evidence that any of the remaining forty-one violations were excusable. Considering the magnitude and nature of the
contract deficiencies, we find that the Contracting Officer's decision
terminating Appellant's contract for default was proper.
Appellant asserts that many of the
late arrivals were due to the failure or refusal of Postal employees to issue
late slips. The record indicates that
after Appellant had made such a complaint, Respondent's Administrative Officer
investigated the complaint, cancelled certain 5500s and issued directives and
forms to the Ann Arbor
workers. Thereafter, Appellant never
again complained to Respondent (Finding 12).
In view of Respondent's corrective actions, we are not persuaded that
Appellant was improperly charged with violations that were excusable.
Appellant complains about his
inability to question three of Respondent's employees who were not required to
be available at the hearing for testimony.
The record shows that Appellant had ample notice of the hearing and of
Respondent's pre-hearing statement listing its witnesses, but, nevertheless,
failed to request the presence of the witnesses until the day before the
hearing. The filing of the request the
day before the commencement of the hearing made it impractical for the Board to
take any meaningful action. In such
circumstances there was no violation of Appellant's rights. See National Aviation, PSBCA
No. 800 (May 14, 1981); Alvin L. Taylor, PDBCA No. 33 (Oct. 22, 1963)
(On recon.).
Appellant alleges unfair and
discriminatory treatment. He asserts
that his attempts to prove that another contractor was shown favoritism were
stymied by adverse rulings of the presiding administrative judge.
Appellant was given full
opportunity during the hearing to show that questions sought to be elicited
about a successor contractor's performance and award of other contracts to that
contractor were material or relevant to the issues of the appeal. Because of this inability to do so and the
lack of any apparent connection to the issues to be adjudicated, the questions
were disallowed. Our review of the
record indicates that the evidence sought to be established would be of no
consequence in resolving the issues of this appeal.
With respect to Appellant's
allegations of racial discrimination and unfair treatment, the record is devoid
of any proof of such allegations. We do
not find any credible testimony or evidence of racial prejudice. As to general allegations of unfair
treatment, the record shows, despite Appellant's many and repeated deficiencies
in contract performance, considerable leniency, patience and forbearance on the
part of the Contracting Officer before terminating the contract. See H.T.J Trucking, Inc., PSBCA No.
366, 78-2 BCA ¶ 13,280; Thomas M.
Kemp d/b/a Fastair Freight, PSBCA No. 328 (June 10, 1977). We find no supporting evidence of any
impropriety on the part of Respondent's officials. Bare allegations that improper actions were
taken because of Appellant's race do not constitute evidence. See Publix Delivery Service, Inc.,
PSBCA No.477, 79-1 BCA ¶ 13,863. There
is similarly no evidence to support Appellant's general allegations of
discriminatory actions by Respondent's officials in awarding contracts in the Detroit area.
Further, such matters are outside the scope of these proceedings. See Southeastern Airways Corp., PSBCA
No. 262, 263 (Oct. 7, 1977) (On recon.), aff'd Southeastern Airways
Corp. v. United States, 230 Ct. Cl. 47, 673 F.2d 368 (1982),
Accordingly, it is concluded that Appellant's contract was properly
terminated for default. Appellant's
appeal from the default termination is therefore denied.
James E. Lemert
Administrative
Judge
Board Member
I concur
James A. Cohen
Administrative
Judge
Chairman
I concur
James D. Finn, Jr.
Administrative
Judge
Vice Chairman