October 24, 1994
Appeal of
DAVID SAHAGIAN
Under Contract No. HCR 97055
PSBCA No. 3543
APPEARANCE FOR APPELLANT:
Michael R. Sahagian, Esq.
APPEARANCE FOR RESPONDENT:
Robyn M. A. Sembenini, Esq.
OPINION OF THE BOARD
Appellant, David Sahagian, appealed the termination for convenience of his contract with the United States Postal Service, Respondent, for the highway transport of mail. Respondent has filed a motion for summary judgment, contending that there are no genuine issues of material fact and that Appellant may not recover as a matter of law more than the contract indemnity awarded by the contracting officer upon termination.
On August 24, 1994, the Board issued an Order noting that there appeared to be significant issues related to the Board's jurisdiction that were not addressed in the motion for summary judgment. The parties were afforded an opportunity to file additional argument addressing the Board's jurisdiction, and we have considered the parties' responses.
For purposes of addressing the Board's jurisdiction, we make the following findings of fact based on the documents in the Appeal File.
FINDINGS OF FACT
1. Appellant held contract HCR 97055 for transport of mail (primarily Express Mail) between the Portland, Oregon Airport Mail Facility ("AMF") and Tillamook, Oregon, with stops at a number of post offices in between, pursuant to a Transportation Services Renewal Contract entered into with Respondent in April, 1991 (Appeal File for PSBCA No. 3385 ("AF 3385"), which has been incorporated into the record for this appeal, Tab 2).
2. The Termination for Convenience clause of the contract authorized the contracting officer to terminate the contract on 30 days written notice to Appellant "when it is in the best interest of the Postal Service." The contract provided that the sole remedy of the contractor in the event of a termination for convenience was an indemnity payment of one-sixth of the annual contract amount if the termination occurred in the third year of contract performance. (AF 3385 Tab 2, Basic Surface Transportation Services Contract General Provisions, PS Form 7407T, March 1989, General Provisions ("GP") 12, 17).
3. Under the contract's Changes clause, significant changes to the service under the contract could be made "if the terms of the change, including increases or decreases in compensation, are agreed to by the Contracting Officer and the Contractor." (AF 3385 Tab 2, GP 12 (a)(2)).
4. In order to improve mail service, in May, 1993, Respondent decided to require use of substantially larger vehicles on Appellant's and four other highway contract routes originating at the Portland AMF. With larger vehicles, the contractors could carry more mail and could handle mail containers. Additionally, Respondent decided to split Appellant's route into two routes--AMF to Seaside, Oregon, and AMF to Warrenton, Oregon--because of its length and the amount of mail anticipated. (Appeal File Tab ("AF") 2).
5. By letter dated August 6, 1993, Respondent advised Appellant of the proposed changes to his contract and offered him an opportunity to retain one or both of the new routes (AF 3).
6. Appellant promptly expressed interest in retaining both of the routes, and the parties began price negotiations (AF 3).
7. The negotiations did not produce agreement on price for either of the new routes, and by letter dated November 9, 1993, the contracting officer notified Appellant that his contact would be terminated for convenience effective December 10, 1993. The contracting officer awarded Appellant indemnity under the contract equal to one-sixth of Appellant's annual contract rate. (AF 8).
8. Appellant sent his appeal of the termination for convenience to the Board, and it was docketed on December 22, 1993.
9. The only relief sought by Appellant, as set forth in his complaint, is reinstatement of his contract and payment of money that would have been due Appellant under the contract from the date of termination until its reinstatement.
DECISION
Respondent argues that the Board lacks jurisdiction to order reinstatement of Appellant's contract, and that, therefore, that part of Appellant's claim must be dismissed. Further, Respondent argues that the Board is without jurisdiction over Appellant's monetary claim because it was not presented to the contracting officer for decision.
In Appellant's response, he does not address the jurisdictional issues as identified in the Board's Order but, rather, argues that he has stated a claim for relief based on Respondent's refusal to negotiate with him in good faith concerning service on the two new routes. Appellant has not questioned Respondent's decision to require a larger vehicle and split his route or the amount of indemnity the contracting officer awarded him.
The Board does not have authority to reinstate Appellant's contract, D's Nationwide Industrial Services, Inc., PSBCA No. 3071, 93-1 BCA ¶ 25,454; Hector Rivera Ruiz, PSBCA No. 1756, 88-3 BCA ¶ 20,829, and, therefore, the part of Appellant's claim that seeks reinstatement is subject to dismissal for lack of jurisdiction.[1]
Additionally, Appellant's claim for money damages based on Respondent's alleged breach of its duty to negotiate fairly with him is beyond the Board's jurisdiction because a monetary claim has not been submitted to the contracting officer for a final decision. See 41 U.S.C. § 605(a); Paragon Energy Corp. v. United States, 645 F.2d 966, 971 (Ct. Cl. 1981); James H. Foster, PSBCA No. 3152, 93-1 BCA ¶ 25,362. Dismissal of Appellant's claim for monetary relief is without prejudice to Appellant's subsequent appeal should the contracting officer deny a proper claim for such relief.
As the only relief sought by Appellant in this appeal is beyond the Board's jurisdiction, the appeal is dismissed. Insofar as the appeal seeks reinstatement of Appellant's contract, it is dismissed with prejudice. Appellant's claim for monetary relief is dismissed without prejudice.
Norman D. Menegat
Administrative Judge
Board Member
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur:
David I. Brochstein
Administrative Judge
Vice Chairman
[1] We also note that the Board would not have jurisdiction to address the propriety of any award of contracts for the new routes, Melvin R. Kessler, PSBCA No. 2820, 91-1 BCA ¶ 23,511; Schneider Engineering Corp., PSBCA No. 1678, 87-3 BCA ¶ 20,041, or to direct that such contracts be awarded to Appellant, cf. Erwin Melvie, PSBCA No. 1744, 87-3 BCA ¶ 20,158; Janie Marie Winkle, PSBCA No. 1548, 86-3 BCA ¶ 19,255.