July 26, 1989

Appeal of

MICHAEL N. BECKLOFF

Under Contract No. HCR 44041

PSBCA No. 2249

APPEARANCE FOR APPELLANT:

Michael N. Beckloff

APPEARANCE FOR RESPONDENT:

William R. Gilligan, Jr., Esq.

OPINION OF THE BOARD ON MOTION FOR RECONSIDERATION

Respondent has filed a Motion for Reconsideration of a portion of the Board’s decision, Michael N. Beckloff, PSBCA No. 2249 (April 21, 1989). Respondent requests that the Board reconsider that part of its decision which found the record insufficient to support the assessment of a penalty of $1,818 against Appellant. Appellant’s response to the Motion contested the Board’s finding of liability, but did not specifically address the penalty assessment issue.

The Board’s decision sustained the Contracting Officer’s default termination of Appellant’s highway transportation contract. Appellant had abandoned his contract on November 25, 1987, and thereafter indicated no willingness to resume performance. The Contracting Officer terminated the contract on December 14, 1987, with an effective termination date of December 5, 1987. Concurrent with the termination the Contracting Officer assessed the $1,818 amount against Appellant pursuant to clause 13(b) of the contract’s General Provisions (PS Form 7407, Oct. 1981). That clause stated that:

“. . . . where the Contractor fails to perform a trip, there shall be forfeited from the compensation due him, and the Contracting Officer may deduct from compensation so due, as damages, the compensation due for the trip, but where the failure is occasioned by the fault of the Contractor, there may be so deducted a sum not to exceed four times the compensation due for the trip.”

According to a PS Form 7440 “Contract Route Service Order,” the assessment calculated was based upon 18 trips Appellant did not perform, plus the penalty factor, during the nine-working-day period from November 25 to December 5, 1987. The Board decision found the record unclear as to whether the contested amount represented a deduction from Appellant’s past earnings or a reduction of the amount which would otherwise have been due Appellant had he performed the contract during the nine-day period. The decision further stated that Appellant should be paid for trips performed until November 25, 1987, less excess reprocurement costs. The matter was then remanded to the Contracting Officer for calculation and assessment against Appellant of excess reprocurement costs, if any.

Respondent’s Motion contends that the Board decision erred. Based upon such decisions as William Cimpi, PSBCA No. 391 (Jan. 27, 1978); Bowman’s Transport Company, PSBCA Nos. 1088, 1089, 1092, 84-1 BCA ¶17,217; and Irving Stumer, PSBCA No. 1256 (Feb. 6, 1985), Respondent contends it is entitled to the penalty assessment against Appellant pursuant to clause 13(b) of the contract from November 25, 1987, until the contract was terminated. Respondent’s position is not well taken. The cases which it relies upon sustained or recognized the Contracting Officer’s right to the penalty assessment for omitted trips during the period when the Appellant was actively performing the contract. The Board decision with one Judge dissenting on the issue found Appellant had abandoned his contract on November 25, 1987, with no indication he was willing to resume performance. The Contracting Officer thus had a right to terminate the contract which he did not exercise until until December 14, 1987. The clause 13(b) penalty applies to deduction from compensation due and contemplates continued performance, not an obvious abandonment of the contract.

Although the contract contained no specific provision allowing for the assessment of excess reprocurement costs, Respondent has a common law right to the recovery of such costs in the form of damages. Cf. Cascade Pacific International v. United States, 773 F.2d 287 (CAFC 1985); Hideca Trading, Inc., ASBCA Nos. 24161, 24162, 27919, 87-3 BCA ¶ 20,040.

The Motion for Reconsideration is denied.

James D. Finn, Jr.

Administrative Judge

Vice Chairman

I concur:

James A. Cohen

Administrative Judge

Chairman

CONCURRING AND DISSENTING OPINION OF JUDGE THOMPSON

I agree that Respondent’s Motion for Reconsideration on the issue of damages should be denied insofar as it seeks imposition of quadruple damages for trips after November 25, 1987. Application of clause 13(b) of the contract for trips after Appellant had indicated he would no longer perform the contract is inappropriate. I disagree with the majority’s conclusion that Respondent is entitled to common law damages for the reasons given in my prior dissent that Respondent’s material breach relieved Appellant from any consequences arising from the default termination.

Joan B. Thompson

Administrative Judge

Board Member