June 20, 1996
Appeal of
SWEARINGEN SERVICES, INC.
Under Contract No. 475630-94-P-1447
PSBCA No. 3718
APPEARANCE FOR APPELLANT:
Tracy T. Swearingen, Sr.
APPEARANCE FOR RESPONDENT:
Glenn L. Smith, Esq.
OPINION OF THE BOARD
Appellant, Swearingen Services, Inc., has timely appealed a Contracting Officer’s decision terminating his contract for cleaning services with Respondent, United States Postal Service. A hearing was held at Appellant’s request in Atlanta, Georgia.
Findings of Fact
1. On April 21, 1994, Appellant was awarded contract no. 475630-94-P-1447 to perform cleaning services at Respondent’s Parkaire Mall Branch in Marietta, Georgia. The term of the contract was for two years at an annual rate of $11,271.00. (Appeal File, Tab 1 (“AF-1")).
2. The contract contained the following “Termination On Notice” provision (Clause OB-581, June 1988):
“This contract may be terminated, in whole or in part, by either party upon 30 days written notice. In the event of such termination, neither party will be liable for any costs, except for payment in accordance with the payment provisions of the contract for the actual services rendered prior to the effective date of the termination. When, in the contracting officer’s judgment, the interests of the Postal Service require such action, the contract may be terminated by the contracting officer, giving the contractor one day’s notice in writing.” (Id., Contract Paragraph G.7).
3. On August 17, 1994, the Parkaire Mall Branch Manager advised the Contracting Officer in writing that Appellant’s work performance was unsatisfactory, detailing in the memorandum a number of specific performance deficiencies (Transcript page (“Tr.”) 315; AF-7).
4. In a letter of August 29, 1994, the Contracting Officer advised Appellant of the unsatisfactory performance and gave Appellant until September 16, 1994 (later extended to October 1, 1994) to bring its contract performance up to acceptable standards or face termination. As a result of receiving the letter Appellant’s performance improved slightly, but did not reach an acceptable level. (Tr. 317; AF-8, 10)
5. Letters were exchanged between the branch manager and Appellant on September 22, 1994 (from Appellant), and September 26, 1994 (from Respondent), in which the parties stated what they believed to be Appellant’s contractual responsibilities. There was clear disagreement between them regarding what services were required under the contract and whether Appellant was meeting the requirements of the contract. (AF-14, 15).
6. Respondent considered Appellant’s performance under the contract to be unsatisfactory. Appellant’s president and the Parkaire Branch Manager had frequent differences of opinion and acrimonious arguments regarding Appellant’s duties. Their relationship became hostile and they were not able to work together harmoniously. (Tr. 348, 358, 381, 390, 391, 392, 424; AF-7, 9, 12, 13, 14, 15, 19, 20, 21).
7. On October 6, 1994, the Contracting Officer, upon review of the contract file and discussion with the purchasing specialist responsible for the Parkaire Branch contract, terminated the contract by giving Appellant 30 days’ written notice (Tr. 467; AF-22). This appeal followed.
DECISION
Appellant contends that in terminating the contract the Contracting Officer abused his discretion and acted in bad faith, thereby breaching the contract and entitling Appellant to damages. Respondent argues that the termination was a reasonable exercise of the Contracting Officer’s discretion under the contract’s Termination on Notice provision and was not a product of bad faith. We agree with Respondent.
The Contracting Officer had broad discretion under the Termination on Notice clause (Finding 2) to terminate the contract by giving Appellant 30 days’ written notice, and the termination will be upheld unless Appellant shows that the Contracting Officer’s decision was made in bad faith or constituted an abuse of discretion. See Package Plus of S.W. FL Inc., PSBCA No. 3674, 95-2 BCA ¶ 27,762. Appellant has not done so.
There is ample evidence in the record that the Contracting Officer acted reasonably in terminating Appellant’s contract as he did. He had received reports from the Parkaire Mall Branch Manager complaining of what the Manager considered to be a failure of Appellant to meet the cleaning standards set forth in the contract. For purposes of this decision it is not necessary to determine whether Appellant was meeting the contract’s requirements. It is clear from the record that the Parkaire Mall Branch was not being cleaned to the standards desired by Respondent, and termination of Appellant’s contract was one way, and perhaps the only way, that Respondent could obtain the services it desired, given the disagreements between Appellant and Respondent.
Furthermore, the disputes between Respondent’s branch manager and Appellant’s principal over the scope of Appellant’s contractual duties and whether Appellant was meeting the contract’s requirements were acrimonious, creating an unpleasant and sometimes hostile work relationship, and the differences between Respondent and Appellant appeared to be irreconcilable. Under these circumstances, the Contracting Officer’s decision to terminate the contract on 30-days’ notice was an appropriate exercise of his discretion under the Termination on Notice provision. See E. Gerald Hanes, PSBCA No. 3082, 92-3 BCA ¶ 25,127 recon. denied 1992 WL 205700, August 14, 1992, and 93-1 BCA ¶ 25,553; Melvin R. Kessler, PSBCA Nos. 2820, 2972, 92-2 BCA ¶ 24,857. Appellant has not shown that the termination was taken in bad faith.
The appeal is denied.
James D. Finn, Jr.
Administrative Judge
Vice Chairman
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur
Norman D. Menegat
Administrative Judge
Board Member