February 16, 1990

Appeal of

MARY RETTA JOHNSON d/b/a

RETTA JOHNSON TRUCKING

Under Contract No. HCR 19410

PSBCA No. 2488

APPEARANCE FOR APPELLANT:

D. Bruce Hanes, Esq.

APPEARANCE FOR RESPONDENT:

Deborah A. Davis, Esq.

OPINION OF THE BOARD

Mary Retta Johnson (Appellant) has appealed from the default termination of her contract with the United States Postal Service (Respondent) to carry mail between the Management Sectional Center (MSC), Southeastern, PA and the Airport Mail Facility (AMF) in Philadelphia, PA.

FINDINGS OF FACT

1. In October 1987 Contract HCR 19410 was awarded to Appellant at an amount of $83,144.32 per annum for the performance of mail transportation services during the period of October 24, 1987, through June 30, 1990. Under the contract Appellant was required to supply one tandem-axle tractor and two tandem-axle trailers to transport mail between MSC, Southeastern and AMF, Philadelphia. After a schedule change in July 1988, the contract generally required two trips on Sunday, four on Monday, eight each day from Tuesday through Friday, and four on Saturday. (Appeal File Tab (AF) I, pp. 4, 6, 7, 14A&B.

2. The contract contained the Basic Surface Transportation Services Contract General Provisions (PS Form 7407, Oct. 1986), including clauses entitled “Claims and Disputes” (GP 2), “Service Requirements and Prohibitions” (GP 4), “Safety Requirements” (GP 5), and “Termination by the Postal Service for Default” (GP 16). The contractor was required by GP 4 to “…carry all mail tendered…in accordance with the operating schedule,” and by GP 5 to “…maintain his vehicles in mechanically sound condition…” Among the grounds allowing a default termination by the Postal Service was “…Contractor’s failure to perform service according to the terms of the contract.” (AF I, pp. 8A, B, H).

3. Appellant carried both first-class mail and Express Mail on her route. Under contracts with the airlines the Postal Service was required to pay for the transportation of mail even when no mail was tendered. Failure by Appellant to provide timely delivery of mail to the AMF would result in mail missing flights and the Postal Service having to pay for airline transportation services which were not used. (Transcript Pages (Tr.) 7, 8, 14, 25, 26, 30).

4. Postal Service Form 5500 was used by loading docket personnel to record irregularities in service (e.g., late or omitted service) by transportation contractors (Tr. 8). Copies of each 5500 were sent to the contractor for comments (Tr. 12).

5. Between the time of contract award and mid-October 1988, Appellant was charged with irregularities consisting of forty-four instances of omitted service, seven late departures, and two days with only one trailer in service. With the exception of one instance of flooded roads, Appellant’s replies to the Form 5500’s stated that the irregularities were due primarily to mechanical breakdowns. (AF IV; Supplemental Appeal File Tab (SAF) B).

6. Because of the service irregularities, a formal counseling session was held with Appellant on October 14, 1988 (AF IV; SAF I; Tr. 13, 22, 27-28). Appellant was given a two-week period, until October 28, to provide properly operating equipment and was advised that she was then to operate for 30 days without serious irregularities. She was told that failure to perform would result in a warning letter, an assessment of damages for omitted service, and possibly other serious consequences. Appellant stated that her better tractor was in the shop and would be back in service by October 26 and that she intended to order a new tractor immediately. (AF II, p. 19).

7. Following October 14, 1988, Appellant was charged with the following irregularities reported on Form 5500’s:

Date Trip Irregularity

10/15/88 1, 2, 3, 4 Omitted Service*

10/28/88 3, 4 Omitted Service

11/4/88 6 Late Arrival

11/9/88 7 Late Departure

11/16/88 3, 4, 5, 6, 7, 8 Omitted Service

11/17/88 1, 2, 3, 4 Omitted Service

*Within the two-week “grace period”

These irregularities were caused primarily by mechanical problems and delays in getting repairs completed. (SAF B).

8. By letter dated November 2, 1988, followed by a Mailgram dated November 21, 1988, Appellant was warned by the Contracting Officer that failure to provide service at an acceptable level would result in termination of the contract for default (AF II, pp. 17, 18).

9. By memorandum of November 21, 1988, the Director of Operation Services recommended termination of the contract because of poor service – specifically, because of irregularities which continued to occur during and after the grace period which followed the counseling session (AF II, p. 16).

10. The Contracting Officer terminated the contract for default on November 29, 1988 (AF II, p. 15A). Appellant filed a timely appeal with the Board.

DECISION

Respondent argues that the Contracting Officer exercised sound discretion in deciding to terminate Appellant’s contract because of continuing unexcused instances of omitted service and lateness following the counseling session and grace period, and because of the critical nature of the service involved.

At the hearing Appellant conceded that her performance was unsatisfactory. However, she stated her belief that many of the mechanical problems she experienced were the product of sabotage (e.g., stolen fuel, water in the fuel tank, removal of an accelerator spring) committed by other transportation contractors. The record (including Appellant’s testimony) shows that, with the exception of one mention of stolen fuel, Appellant failed to report the alleged acts of sabotage to Postal Service authorities or the police. Appellant also did not provide evidence identifying sabotage as the cause of particular service irregularities with which she was charged. We conclude that Appellant has failed to provide sufficient evidence to show that the service irregularities for which she was terminated were the result of sabotage.

Under these circumstances and in light of the deficiencies which occurred after the grace period, we conclude that it was within the discretion of the Contracting Officer to terminate the contract for default. The irregularities represented serious and continuing violations of the obligation to transport the mail in accordance with the contract schedule and Appellant has not demonstrated that the irregularities were excusable. The Contracting Officer reasonably concluded that Appellant’s problems were due to repeated mechanical breakdowns, which did not excuse the failure to provide service in accordance with the contract requirements. B & E Mail Transport, Inc., PSBCA No. 947, 82-2 BCA ¶ 15,912 and cases cited. Therefore, we do not find that the Contracting Officer acted arbitrarily or capriciously in deciding to terminate the contract.

The appeal is denied.

David I. Brochstein

Administrative Judge

Board Member

I concur:

James A. Cohen

Administrative Judge

Chairman

I concur:

James D. Finn, Jr.

Administrative Judge

Vice Chairman