November 26, 1996
Appeal of
AQUA SPRAY MOBILE WASH
Under Contract No. 072368-93-R-1636
PSBCA No. 3700
APPEARANCE FOR APPELLANT:
Dawn C. Harty
APPEARANCE FOR RESPONDENT:
Mark Brent Ezersky, Esq.
OPINION OF THE BOARD
Appellant, Aqua Spray Mobile Wash, has appealed the termination of the Vehicle Maintenance Agreement between it and Respondent, United States Postal Service. Appellant maintains that termination of the agreement, under which it provided vehicle washing services at the Las Cruces, New Mexico Post Office, was the product of bad faith on the part of Respondent's personnel. A hearing was held in Las Cruces, New Mexico.
FINDINGS OF FACT
1. Vehicle Maintenance Agreement No. 072368-93-R-1636 was awarded to Appellant on August 30, 1993. The agreement had an initial term of two years, from September 1, 1993, through August 31, 1995, and contained four two-year options, exercisable by Respondent. Under the agreement, Appellant was to provide vehicle washing services (interior and exterior) upon receipt of verbal orders placed by certain named personnel at the Las Cruces, New Mexico Post Office. Respondent was not required to place any orders under the agreement. (Appeal File Tab (AF) 11).
2. Clause G-12, "Termination on Notice," provided that either party could terminate the agreement, in whole or in part, upon 30 days written notice. The clause provided further that in the event of such termination, neither party would be liable for any costs, except for payment for services rendered prior to the effective date of termination. The clause also provided for termination by Respondent on one day's notice if, in the Contracting Officer's judgment, the interests of the Postal Service required such action. (Id.).
3. The Las Cruces postmaster was appointed as the Contracting Officer's representative (COR) under the contract. Among the duties assigned the COR were maintaining a log of orders placed and work required, ensuring that all work was performed and was of acceptable quality, and ensuring that invoices submitted by Appellant reflected the work actually performed. (Id.).
4. At the beginning of the performance period, Appellant had been given keys to one group of vehicles, called LLVs (long life vehicles), so that it could clean their interiors. A vehicle operator maintenance assistant (VOMA) employed by Respondent performed regular inspections of the vehicles after each washing. After a number of months of operation, he began to receive complaints from the LLV operators, particularly about failure to clean the interiors of some of the vehicles. On at least two occasions, he called Appellant on the telephone and on at least one occasion he met with one of the principals of Appellant to relate the complaints he had been receiving. He did not notify Appellant in writing of any deficiencies in its performance. (Transcript pages (Tr.) 60, 62, 65).
5. In April and May 1994, the postmaster began to receive complaints from some of the LLV operators, alleging that the interiors of some vehicles had been left uncleaned, that the outsides had not been thoroughly cleaned, and that water spots had been left on the windows. He asked the VOMA to monitor the cleaning of the vehicles and report irregularities to him. (Tr. 40, 42).
6. In a September 8, 1994 letter to Respondent's purchasing specialist administering the agreement, the postmaster complained that Appellant had not done a satisfactory job of cleaning the LLVs. He specifically identified May 15, June 19, July 24 and August 28 as dates on which the work had been unsatisfactory. The postmaster then requested that the agreement be terminated. (AF 10).
7. On September 12, 1994, the purchasing specialist sent a letter to Appellant, advising it of the complaint that had been received from the Las Cruces postmaster and directing Appellant to take immediate corrective action. The letter warned that, unless the deficiencies were corrected by September 26 and performance maintained at an acceptable level thereafter, the agreement might be terminated. (AF 8).
8. Appellant washed the LLVs again on September 25, 1994. On September 26, the postmaster inspected the vehicles before they were taken out on delivery routes. His inspection was limited to four or five vehicles whose operators complained that their vehicles had not been cleaned properly. His conclusion was that the exteriors of those vehicles had been cleaned properly, but that the interiors were dirty. The postmaster then reported the results of his inspection to the purchasing specialist. (Tr. 30, 46, 50, 52, 54).
9. On September 28, 1994, the Contracting Officer issued a contract modification under the one-day provision of the termination clause terminating the agreement, effective September 27, 1994, "for poor performance on the part of the contractor." The Contracting Officer issued the termination notice after speaking to the purchasing specialist and after reviewing documents in the contract file, including two letters of complaint[1] and a questionnaire which indicated unsatisfactory performance. The Contracting Officer had no personal knowledge of the alleged deficiencies in performance and had not been informed of any problems regarding Appellant's performance until the day he actually signed the termination notice. (AF 6, 9, 10; Tr. 18, 80).
10. On September 28, 1994, after the termination notice had been issued, the Contracting Officer received a letter from Appellant that had been written in response to the September 12 letter from the purchasing specialist (Finding 7). In the letter, Appellant took issue with the statement that its performance had been inadequate. Appellant also complained that it had been told that it would be invited to be present for the inspections after each washing, but that it had never been called. (AF 7).
11. After receiving the letter from Appellant, the Contracting Officer came to the conclusion that Appellant had not been given enough details in the September 12, 1996 letter about the nature of the alleged deficiencies in its performance to justify the use of the one-day termination procedure. He still believed that Appellant's performance had been unsatisfactory, but did not believe that Appellant had been given sufficient information as to how it could improve. Therefore, the Contracting Officer decided to convert the termination to one citing the 30-day termination provisions of the agreement. He did so by letter and modification dated October 9, 1994, which revised the effective date of the termination to October 27, 1994. (AF 3, 4; Tr. 22, 23).
12. By letter dated October 10, 1994, and addressed to the Contracting Officer, Appellant filed a "protest" of the September 27 one-day termination. That letter was treated as a notice of appeal and forwarded to the Board. (AF 1, 2).
13. The record in this appeal contains no evidence that the postmaster/COR or the VOMA maintained a service log or any other record of work performed, as required by the COR's letter of appointment (Finding 3). The record of this appeal also contains no indication that either the COR or the VOMA objected to the payment of any of Appellant's invoices based on Appellant's failure to provide satisfactory service. In addition, although the VOMA had discussed deficiencies in performance with Appellant, at no time did the COR indicate to Appellant that its performance under the agreement was unsatisfactory. (Finding 4; Tr. 51, 72, 118, 145).
DECISION
Appellant argues that the circumstances surrounding the termination of its vehicle wash agreement demonstrate that Respondent was acting in bad faith when it terminated the agreement. Appellant points first to actions taken by the Contracting Officer. In particular, Appellant argues that the Contracting Officer acted in bad faith when he terminated the agreement without giving Appellant the opportunity to "maintain" its performance at an acceptable level, as demanded in the warning letter from the purchasing specialist (see Finding 7). Appellant also argues that the Contracting Officer acted in bad faith when he based the decision to terminate on inadequate documentation -- e.g., a contract file that did not include any of the logs or other records that the COR was obligated to maintain, and thus did not include documentation of poor performance by Appellant.
Appellant also points to actions taken, and not taken, by the COR and the VOMA. Appellant emphasizes the COR's failure to maintain the records that he was required to maintain as COR. Appellant also relies on the COR's failure to keep records even during the inspection that occurred after Appellant had been given a letter of warning. Had he done so, Appellant argues, it would have been able to identify the vehicles that had been inspected and determine whether those vehicles were among the vehicles that Appellant alleges it was unable to unlock for interior cleaning. Appellant also refers to the failure of the COR and VOMA to inform Appellant about impending inspections so Appellant could be present.
Appellant's final argument appears to be that it was not informed that Respondent's personnel were generally unhappy with its performance until it received the warning letter from Respondent's purchasing specialist. Appellant contends that the Contracting Officer then terminated the contract without considering the information contained in Appellant's reply letter.
Respondent argues that the record does not indicate that the Contracting Officer acted in bad faith when he terminated the agreement. Respondent argues that Appellant had been providing inadequate service for some time before termination and that it had been warned, both verbally and in writing, about the quality of its service. Respondent also argues that before issuing the termination, the Contracting Officer reviewed the entire file, which included the correspondence regarding poor performance and the questionnaire (Finding 9) and spoke to the purchasing specialist. Based on this review, Respondent argues, the Contracting Officer reasonably came to the conclusion that it was in the best interests of the Postal Service to terminate the agreement.
We disagree with Appellant's arguments and conclude that the evidence in this appeal does not support a finding that the actions of Respondent's personnel were taken in bad faith. The Contracting Officer evaluated documents that had been submitted by the COR/postmaster alleging that Appellant's performance was unsatisfactory. He also received information from speaking to the purchasing specialist who was administering the agreement. While the Contracting Officer could have undertaken a further investigation, his failure to do so did not constitute bad faith and his decision to terminate the agreement based on the record before him did not constitute an abuse of his discretion. He had received expressions of dissatisfaction with Appellant's performance from the user of the services, the Las Cruces postmaster. Further, he was aware that Appellant had been given a warning letter, and he had been informed that, based on reports from Las Cruces, performance at the next vehicle washing was still unsatisfactory. Here, notwithstanding the absence of logs and other written records that the COR was supposed to maintain, the record indicates that the Contracting Officer considered the records that he did have and decided that termination was in the interest of the Postal Service. The record of this appeal offers no suggestion that the Contracting Officer was acting in bad faith in his decision to terminate the agreement.[2]
In addition, contrary to Appellant's argument, the fact that the Contracting Officer did not give Appellant the opportunity to "maintain" its performance, as stated in the warning letter, is not significant. Based on reports from Las Cruces, the Contracting Officer had no indication that Appellant had initially even corrected its performance deficiencies at the September 25 washing -- a necessary prerequisite to "maintaining" its performance at a satisfactory level.
We also do not find that the actions of the COR/postmaster in reporting Appellant's unsatisfactory service and requesting that the agreement be terminated were taken in bad faith. Although the COR did not comply with the record keeping requirements, there is no indication that had he done so his opinion would have been different, or that he failed to maintain the required records in an effort to discredit Appellant. The COR's opinion was based on complaints made to him by the vehicle operators and also on his personal inspections of the vehicles. Appellant argues that the COR's opinion regarding Appellant's failure to clean the interiors of some vehicles may have been based on an inspection of vehicles for which Appellant did not have keys.[3] However, neither the record nor Appellant's brief suggests that, if that was the case, the COR was aware of the situation.[4] Therefore, there is no basis for concluding that the COR's opinion, even if mistaken, was not genuinely held. Thus, we cannot conclude that the actions taken by any of
Respondent's personnel were taken in bad faith.
Accordingly, the appeal is denied.[5]
David I. Brochstein
Administrative Judge
Vice Chairman
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur:
Norman D. Menegat
Administrative Judge
Board Member
[1] One was the September 8, 1994 letter from the postmaster. The other letter was identified (Tr. 18) as having been received in June 1994, but was not made a part of the record.
[2] See, e.g., Krygoski Construction Co. v. United States, 94 F.3d 1537 (Fed. Cir. 1996); Kalvar Corp. v. United States, 211 Ct.Cl. 192, 543 F.2d 1298 (1976).
[3] There was conflicting testimony as to whether the Las Cruces Post Office received new LLVs during the course of the contract, whether Appellant received keys to the new LLVs (if new vehicles were received), and whether Appellant ever complained about not receiving the keys. (Tr. 180, 185, 188).
[4] In fact, in its brief Appellant specifically argues that the COR was unaware that Appellant did not have a full set of keys.
[5] The Vehicle Maintenance Agreement did not require that Respondent place any service calls to Appellant. Therefore, Respondent's termination of the agreement might not, in any event, be a basis for recovery by Appellant. See Modern Systems Technology Corp. v. United States, 979 F.2d 200 (Fed. Cir. 1992); Raymond E. Kitchen dba Ray Service Co., ASBCA No. 30569, 86-2 BCA ¶ 18,756.