December 29, 1994
Appeal of
JAMES W. FUST
Under Contract No. HCR 54170
PSBCA No. 3483
APPEARANCE FOR APPELLANT:
James W. Fust, pro se
APPEARANCE FOR RESPONDENT:
Gregg R. Sackrider, Esq.
OPINION OF THE BOARD
Appellant, James W. Fust, has appealed the assessment of reprocurement costs against him following the default termination of his contract for the delivery of mail from the Wausaukee and Athelstane, Wisconsin post offices. The appeal is being decided on the record in accordance with 39 C.F.R. §955.12. The record includes the transcript of an oral argument held by telephone.
FINDINGS OF FACT
1. Contract HCR 54170 was awarded to Appellant on September 30, 1992, for a term beginning on October 10, 1992, and ending June 30, 1996. The contract required Appellant to case and deliver mail from the Wausaukee and Athelstane, Wisconsin post offices on a daily basis, Sundays and holidays excepted. (Appeal File Tabs (AF) 1, 28).
2. From the beginning of contract performance, Appellant hired a substitute driver to case and deliver the mail in his place. Appellant rarely performed the contract work himself. The substitute driver had previously run the route either as a substitute or as a contractor for a period of approximately 13 years. (AF 29).
3. The solicitation and contract provisions required the contractor, if an individual, to be a resident of a county traversed by the route or of an adjoining county at the time of bid closing and during the time of contract performance. The contract also contained the following relevant provisions:
"Termination of ... this contract [for default] shall not impair the right of the Postal Service to damages from the Contractor, and such damages may be assessed and liquidated for the purpose of setoff or counterclaim in the settlement of any claim of the Contractor against the Postal Service arising under this contract." (AF 3, General Provision 16(b)).
"The Contractor shall remain accountable and answerable in damages ... for the faithful performance of the obligations assumed by him under this contract, whether or not he has entrusted the care and transportation of the mail to another." (AF 3, General Provision 8(b)).
4. Beginning in October 1992, Appellant made several requests to be released from the contract, initially on the basis of alleged health problems and later because he allegedly planned to move out of the area. Appellant also claimed that he had been unable to learn how to perform the contract work with any proficiency. (AF 26, 23, 19).
5. In May 1993 the Contracting Officer terminated the contract for default on the bases of Appellant's failure to provide service for a period of time in April and Appellant's alleged move out of the local area on or about March 4, 1993. The Contracting Officer also directed that $957.68, previously withheld from Appellant, be transferred to a different Postal Service account to be applied to the procurement and operation of replacement service. (AF 10, 11).
6. In a final decision dated July 7, 1993, the Contracting Officer informed Appellant that he owed Respondent $1,676.42 as a result of his failure to perform. The assessment was calculated as follows:
Excess costs of performance for 98 days[1] @ $13.79 per day: $1351.42
Administrative costs of awarding replacement contract:
Secretarial services - 4 hours @ $16.31 per hour: 65.24
Transportation Specialist - 10.3 hours @ $25.16 per hour: 259.76
$1,676.42
Appellant was credited with the $957.68 previously withheld and directed to remit $718.74 to Respondent.[2]
7. By letter dated August 18, 1993, Appellant filed an appeal from the Contracting Officer's excess cost determination. In a follow-up letter dated September 23, 1993, Appellant explained the basis for his appeal from the assessment of reprocurement costs. However, he conceded that the contract termination had been proper, because he had moved out of the local area. The basis for Appellant's challenge to the reprocurement assessment was that he had been told by the Transportation Specialist that if he moved he would be relieved of responsibility for the contract without penalty. Further, Appellant alleged that his substitute driver and the Transportation Specialist had conspired to cause the termination and the subsequent contract award to the driver by having her intentionally fail to run the route while the contract was still Appellant's responsibility. (AF 6, 8).
8. In a written statement included in the record, the substitute driver denied that there was any collusion between her and the Transportation Specialist. However, she appeared to confirm that in April 1993 she intentionally failed to perform the contract for Appellant with the expectation that his contract would be terminated and that she could then bid to provide the replacement service. (AF 29).
DECISION
In the oral argument, Appellant stated that he had no quarrel with the reprocurement assessment, except in the area of administrative costs. Appellant challenged the salary levels used by Respondent in the calculation and the amount of time allegedly expended in the reprocurement. However, Appellant provided no basis for his challenge beyond a statement that the amounts seemed "a little bit excessive."
Appellant also repeated his argument that his replacement driver had taken actions in order to take over the contract route and that the Transportation Specialist had been aware of the driver's intentions before she precipitated the termination by failing to run the route in April.
Since Appellant has not challenged the propriety of the default termination, the only question before us is whether he has provided grounds for denying the recovery of the excess costs to which Respondent would otherwise be entitled under the contract. We conclude that he has not.
Appellant argues that he should not be held financially liable based on what he contends was collusion between his driver and Respondent's Transportation Specialist in the termination of his contract and the award of the replacement contract. Appellant apparently contends that through several discussions with the Transportation Specialist, his driver developed a scheme to intentionally fail to run the route, thereby triggering a default termination that would allow her to be awarded the replacement contract. A statement by the driver, who was Appellant's employee, strongly suggests that she may have decided to take exactly that course of action. However, she expressly denies that the Transportation Specialist had any involvement beyond telling her that since the mail was generally being delivered in a satisfactory manner (by her), the Postal Service would take no action to terminate Appellant's contract. Appellant argues that the Transportation Specialist's statement was a "hint" to the driver as to what actions to take and constituted "collusion". Appellant has offered no other evidence of involvement by the Transportation Specialist. Having considered the record, we conclude that Appellant has offered insufficient evidence of any improper involvement by the Transportation Specialist in the events that led to the reprocurement at issue here. If Appellant's employee did intentionally cause the default termination through her actions, that is a matter between Appellant and her and is unrelated to the question before us. As between the parties to the contract, Appellant was contractually liable for the actions of his employee, and those actions do not offer a basis to overturn the assessment of reprocurement costs.
Appellant has also provided no basis for challenging the amount of the administrative costs assessed against him beyond his statement that they seemed a "little bit excessive." We conclude that the costs assessed by the Contracting Officer reasonably represented the administrative costs actually incurred in the process of advertising for and awarding the replacement contract for the service covered by the defaulted contract.
Accordingly, 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
[1] Although the record does not explain the basis for the 98 days used in the calculation, Appellant has not challenged this part of the assessment.
[2] There is a minor computation error in the "Transportation Specialist" item. The amount should be $259.15 rather than $259.76. Accordingly, the total reprocurement assessment should be $1,675.81 and the net amount allegedly due from Appellant should be $718.13.