October 27, 1987

Appeal of

SANDRA ESTEP

Under Contract No. HCR 81072

PSBCA No. 1610

APPEARANCE FOR APPELLANT:

Sandra Estep

APPEARANCE FOR RESPONDENT:

Donna S. Eisen, Esq.

OPINION OF THE BOARD

Appellant, Sandra Estep, has appealed from a contracting officer’s decision terminating her highway transportation contract for the convenience of Respondent, United States Postal Service. The termination action was taken after a bid protest against award of the contract to Appellant was sustained on the ground Appellant was not an eligible bidder for the contract because she was employed as a relief postmaster. The parties have submitted the case for decision on the record. The material facts are not in dispute.

FINDINGS OF FACT

On June 19, 1986, Appellant and her husband John F. Estep, the low bidder, were awarded highway transportation contract HCR 81072 for a four-year term from July 1, 1986, to June 30, 1990 (Appeal File (AF) Tab 1). The contract required a morning and late afternoon return trip between LaJunta and Swink, Colorado, with one intermediate stop, and incorporated PS Form 7407, “Basic Surface Transportation Services Contract General Provisions,” dated October 1981, with eight amendments (AF Tab 2).

Prior to contract award Appellant questioned officials at Respondent’s Denver Transportation Management Service Center (TMSC) about her eligibility for the contract as she was a relief postmaster at one of the post offices on the route. TMSC officials sought advice on the question from the Office of Transportation and International Services (OTIS) at Postal Service headquarters. After consulting with the Law Department, the OTIS informed TMSC personnel that relief postmasters were eligible for such a contract. A TMSC official then informed Appellant that she was eligible for award, but recommended that she quit her relief postmaster position to avoid an appearance of conflict of interest (Declarations of Willie R. Torres, David M. Price, and Appellant’s appeal). By letter dated June 30, 1986, Appellant resigned her relief postmaster position (AF Tab 5).

In the meantime, the next low bidder for the contract, Duwane R. Engler, filed a bid protest dated June 22, 1986, on the ground Appellant was not eligible for award of the contract as she was an employee of Respondent. This protest (P. S. Protest No. 86-52) was sustained in a decision dated September 26, 1986, by the Associate General Counsel, Office of Contracts and Property Law, who concluded that a relief postmaster was ineligible for the contract because that position was included within the meaning of the word “employee” contained in the solicitation and in the Postal Contracting Manual (PCM) 19-110.2, forbidding the acceptance of bids by postal employees and their immediate families (AF Tab 7). He recommended that Appellant’s contract be terminated for convenience.

The contracting officer requested reconsideration of this decision, pointing out the erroneous advice given to Appellant which caused her to resign from her relief postmaster position after contract award (AF Tab 9). By decision dated November 7, 1986, the Associate General Counsel denied the request for reconsideration (AF Tab 10).

Consequently, the contracting officer on November 19, 1986, terminated Appellant’s contract for Respondent’s convenience effective close of business December 19, 1986. One-third ($2,214.33) of the annual contract rate of $6,643 was allowed as indemnity pursuant to clause 12 of the General Provisions of the contract (AF Tabs 12, 14). Appellant appealed to this Board. Effective December 20, 1986, a contract was awarded to the protester for the remainder of the HCR 81072 contract term (AF Tab 14).

We take official notice of the pertinent provisions of PS Form 7407, which were incorporated into the contract, but are not contained in the appeal file (see Fruehauf Corp., PSBCA No. 479, 73-1 BCA ¶ 9897). Clause 17 permits termination of the contract at Respondent’s convenience when it is in its best interests and allows the contractor as indemnity a sum as provided for in clause 12. Clause 12(c) provides that when a highway transportation contract is terminated without fault on the part of the contractor, the contractor “agrees to accept, as liquidated damages for termination a sum equal to: (1) One-third of the annual rate (if during the first two years). . .” (PCM 19-98, 19-100).

DECISION

Respondent contends the termination was necessary after the decisions sustained the bid protest by concluding that Appellant was not an eligible bidder and contractor. Respondent argues that Appellant has received the liquidated damages provided by the contract and that is the only relief she is entitled to receive.

Appellant’s position is that the termination was unfair because she had informed TMSC personnel of her relief employment before contract award and followed their advice to resign from that position to avoid a “conflict of interest situation.” She asserts that after receiving official notification of the contract award she purchased a 1986 “Bronco” at a cost of $16,000 to comply with contract requirements. She requests the following alternative relief: reinstatement of her highway contract route, the full four-year contract “salary” as indemnity, or the next available carrier position at two local post offices.

In this appeal no relief may be given Appellant other than the liquidated damages already provided. The Board lacks authority to order reinstatement of the contract or to order award of another contract or employment requests by Appellant. See, e.g., Paul A. Mason, PSBCA No. 1187, 84-3 BCA ¶ 17,572, recon. denied, 85-1 BCA ¶ 17,735; Samuel A. Moore, PSBCA No. 1063, 83-1 BCA ¶ 16,376. The contract prescribed a remedy in this case if the contract was terminated without the fault of the contractor. This liquidated damages provision will be upheld in the absence of persuasive evidence that it is invalid because it is an inappropriate measure of possible damages. Therefore, the liquidated damages provision controls the amount of damages allowed for a convenience termination. Id.

There is no evidence the liquidated damages provision is invalid or inapplicable in this case. The fact, as asserted by Appellant, that she purchased a new vehicle in reliance upon award of the contract does not demonstrate the invalidity or inapplicability of the contract provision. The erroneous advice given Appellant affords no basis for relief under this contract. Respondent terminated the contract in accordance with the bid protest determination that Appellant was an ineligible bidder and the next lowest responsible bidder should be awarded the contract. Thus, there was no abuse of discretion by the contracting officer in terminating the contract.

The formula for liquidated damages prescribed in contract clause 12(c) constituted the only relief authorized by the contract and which this Board can grant in these circumstances. Cf. Interstate United Corp., PSBCA No. 966, 82-1 BCA ¶ 15,758.

Accordingly, the appeal is denied.

Joan B. Thompson

Administrative Judge

Board Member

I concur:

James A. Cohen

Administrative Judge

Chairman

I concur:

James D. Finn, Jr.

Administrative Judge

Vice Chairman