September 10, 1992
Appeal of
D'S NATIONWIDE INDUSTRIAL SERVICES, INC.
Under Contract No. HCR 95034
PSBCA No. 3071
APPEARANCE FOR APPELLANT
Donald M. Glaude
APPEARANCE FOR RESPONDENT
Elena V. Alejandre, Esq.
OPINION OF THE BOARD ON MOTION TO DISMISS OR IN THE
ALTERNATIVE FOR SUMMARY JUDGMENT
Respondent has filed a Motion to Dismiss on in the Alternative for Summary Judgment in this appeal. As the basis for the Motion Respondent alleges that the Board lacks subject matter jurisdiction over this dispute or alternatively that summary judgment should be granted Respondent on the issue of breach of contract raised by Appellant in its Complaint.
FINDINGS OF FACT
For the purpose of deciding this Motion we make the following findings of fact:
1. Contract No. 95034 for mail transportation services between San Jose and Gilroy, California, for an approximate four-year term was awarded to Appellant, D's Nationwide Industrial Services, on August 28, 1989 (Appeal File (AF)-1, 2). The contract's General Provisions (PS Form 7407T, March 1989) in clause 16 (a)(1) and (3) allowed the Contracting Officer to terminate the contract for default "[f]or Contractor's failure to perform service according to the terms of the contract" and "[f]or the Contractor's disobedience of the instructions of the Contracting Officer." (AF-5)
2. Also included in the contract were "Additional General Provisions for Service Contracts" (PS Form 7382, Dec. 1984) which stated that Appellant's contract was subject to the Service Contract Act of 1965 (41 U.S.C. 351 et. seq.). Subparagraph (i) of these provisions stated in part:
"(i) The contracting officer shall withhold or cause to be withheld from the Government prime contractor under this or any other Government prime contract with the prime contractor such sums as an appropriate official of the Department of Labor requests or such sums as the contracting officer decides may be necessary to pay underpaid employees employed by the contractor or subcontractor. In the event of failure to pay any employees subject to the Act all or part of the wages or fringe benefits due under the Act, the agency may, after authorization or by direction of the Department of Labor and written notification to the contractor, take action to cause suspension of any further payment or advance of funds until such violations have ceased. . . . "(AF-5A)
3. Subparagraph (r) of the same "Additional General Provisions . . ." provided"
"(r) Disputes concerning labor standards. Disputes arising out of the labor standards provisions of this contract shall not be subject to the general disputes clause of this contract. Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR Parts 4, 6 and 8. Disputes within the meaning of this clause include disputes between the contractor (or any of its subcontractors) and the contracting agency, the U.S. Department of Labor, or the employees or their representatives. (AF-5A)
4. By letter dated April 9, 1991, to Respondent's Contracting Officer a Regional Administrator for the U.S. Department of Labor, Employment Standards Administration, advised that the Department of Labor had conducted an investigation of Appellant's contract and that Appellant had failed to pay its employees the required prevailing wage rate. Accordingly, the Administrator requested that the Contracting Officer withhold funds from payments to Appellant under its contract to cover the unpaid wages in the amount of $27,471.92 (AF-22).
5. The Contracting Officer thereafter notified Appellant of Respondent's intent to withhold payment in the amount of $4,821.45 each accounting period until the total amount requested by the Department of Labor was withheld. Appellant objected to the proposed withholding in a letter to the Contracting Officer dated April 19, 1991 (AF-23, 24).
6. In a letter to the Contracting Officer dated April 23, 1991, Appellant stated "This company must immediately stop performance on this contract to comply with Wage Determination. If your concerns change and you are willing to discuss the issue, please feel free to call our office." (AF26)
7. By final decision dated April 24, 1991, the Contracting Officer terminated Appellant's contract under clause 16(a) (1) and (3) of the Contract's General Provisions "for your expressed statement of inability to perform service." This appeal followed (AF-27, 31).
DECISION
In its initial argument in support of its position that the board lacks jurisdiction to hear the appeal Respondent states that "[a]fter discussing the case with Appellant's attorney, it is clear that Appellant is not appealing the termination as improper." Rather, according to Respondent, Appellant's dispute pertains to the action taken by Respondent to withhold payments under its contract, as requested by the Department of Labor. Respondent's position is not well taken. While Appellant may dispute the propriety of the contract withholding, the final decision of the Contracting Officer was a termination for default action. The decision advised Appellant of its appeal rights under the "Claims and Disputes" clause of the contract and the Contract Disputes Act of 1978, 41 U.S.C. §§ 601-613. Thereafter, Appellant duly exercised those appeal rights, thus clearly vesting the Board with jurisdiction to hear the appeal.
Respondent also argues that the
Board lacks jurisdiction to reinstate Appellant's contract, a remedy requested
by Appellant in its Complaint. In
regard to the requested remedy of contract reinstatement, we have previously
held that no authority to order reinstatement rests with the Board. Hector Rivera Ruiz, PSBCA No. 1756,
88-3 BCA ¶ 20,829; Paul A. Mason,
PSBCA No. 1187, 84-3 BCA ¶ 17,572m recon. den., 85-1 BCA ¶
17,735. However, the Board has
jurisdiction to determine the propriety of the default termination, and if
found to be improper grant Appellant its contractual remedies for an improper
termination. Thus, Respondent's Motion
to Dismiss is denied.
In regard to Respondent's Motion for Summary Judgment we have previously
stated that "[s]ummary judgment will be granted only where no genuine
issue of material fact exists and the moving party is entitled to judgment as a
matter of law." Stanley Myrie,
PSBCA No. 1674, 88-1 BCA ¶ 20,239. In
deciding motions for summary judgment a court or a Board has discretion and
will not grant the motion unless certain that judgment can be rendered without
the necessity of a trial. Vienna/Vienna,
PSBCA Nos. 2505, 2816, 92-2 BCA ¶ 24,767.
Respondent contends that it is entitled to summary judgment as a matter
of law as "[t]here is a possibility that Appellant may be alleging that
Respondent breached the contract by complying with the request of the
Department of Labor." Respondent
continues, citing two decisions, that if its suggestion as to Appellant's
position is correct the contract language clearly required the Contracting
Officer to comply with the Department of Labor's request, thus mandating a
judgment in Respondent's favor.
Respondent's supposition as to Appellant's position on the issue of the
propriety of the termination action does not support the granting of judgment
in its favor as a matter of law, and the record before the Board does not favor
the granting of a judgment without a hearing.
Appellant's Complaint raises issues pertaining to the terms and
conditions of its contract and impossibility of performance and Appellant's
response to Respondent's motion alleges collusion between the Department of
Labor and the Contracting Officer and intimates bad faith on the part of the
Contracting Officer. Appellant has not
filed a cross-motion for summary judgment and has requested a hearing on these
matters. Under such circumstances
Appellant should be given an opportunity to prove its allegations, however
difficult such proof may be, by evidentiary testimony of witnesses as requested
by Appellant. The Motion for Summary
Judgment is denied.
James D. Finn, Jr.
Administrative Judge
Vice Chairman
I concur
James A. Cohen
Administrative Judge
Chairman
I concur
Joan B. Thompson
Administrative Judge
Board Member