March 3, 1997
Appeal of
DALE W. MAXWELL
Under Contract No. HCR 58374
PSBCA No. 3886
APPEARANCE FOR APPELLANT:
Dale W. Maxwell
APPEARANCE FOR RESPONDENT:
Christopher W. Zadina, Esq.
OPINION OF THE BOARD
Appellant, Dale W. Maxwell, has filed a timely appeal of the decision of the contracting officer to terminate for default his mail transportation service contract with Respondent, the United States Postal Service. The parties have elected to submit this appeal on the record in accordance with 39 C.F.R. §955.12.
FINDINGS OF FACT
1. On June 23, 1995, Appellant, was awarded Contract No. HCR 58374, at an annual rate of $13,340.00, for the transportation and box delivery of mail between Maddock and Esmond, North Dakota. Performance under the contract commenced on July 1, 1995, and was to run for a four-year term. (Appeal File Tabs (AF) 1, 2).
2. General Provisions clause 16, TERMINATION BY THE POSTAL SERVICE FOR DEFAULT, permitted the Postal Service to terminate the contract for default if the contractor failed to perform according to the terms of the contract (Id.).
3. Respondent’s administrative official for Appellant’s contract was the Postmaster of the Maddock Post Office (AF 2). By letter dated August 21, 1995, the Maddock Postmaster advised Appellant that his performance was unsatisfactory and requested Appellant to attend a formal conference on August 25, 1995, to discuss correcting the deficiencies in his contract performance (AF 15).
4. By letter dated August 24, 1995, Appellant requested that the formal conference be postponed until September 1, 1995, for the convenience of his attorney (AF 14). The conference was rescheduled, but Appellant did not attend the formal conference on September 1, 1995 (AF 11).
5. On August 31, 1995, Appellant failed to report to perform his route and never provided service on his contract on any date thereafter. Appellant did not notify any Postal Service official of the reason for his absence, and he failed to respond to the attempts of Postal Service officials to contact him. Postal Service officials left messages requesting Appellant to contact them on three occasions on August 31 and once on September 1, but in each case, Appellant failed to return the call. (AF 11; Declaration of Robert J. Saxton).
6. On August 31, 1995, Respondent solicited and awarded an emergency service contract to replace Appellant’s contract. Respondent attempted to solicit six bidders. However, only two were reached and only one agreed to temporarily perform the service. As a consequence, emergency service contract HCR No. 583FU, was awarded for six days, commencing on September 1, 1995, at a daily rate of $65.00 per day. The replacement contractor performed this emergency service contract through September 8, 1995. (Declaration of Robert J. Saxton).
7. Commencing on September 1, 1995, Respondent began efforts to solicit and award a contract for longer term emergency service to replace the services formerly provided under Appellant’s contract. Eight potential contractors were solicited by telephone, and three submitted bids. The low bidder was awarded emergency service contract HCR No. 583GU, effective September 9, 1995, at an annual rate of $16,000. The second replacement contractor performed this emergency service contract through February 2, 1996. (Declaration of Robert J. Saxton).
8. On September 5, 1995, the contracting officer terminated Appellant’s contract for default for failure to perform according to the terms of the contract (AF 10).
9. On September 12, 1995, by final decision, the contracting officer assessed against Appellant’s contract $1,108.02 in excess reprocurement costs resulting from his default in performance. This amount was determined by multiplying the incrementally greater daily cost of the emergency service contracts ($8.33/day)[1] times 94 days[2], for a sum of $783.02. Added to this was $325.00 in administrative costs representing the hourly wages of Respondent’s administrative personnel engaged in the solicitation and award of the two replacement contracts. (AF 9; Declaration of Robert J. Saxton).
10. By letter dated October 1, 1995, Appellant timely appealed the decision of the contracting officer to terminate his contract for default (AF 8).
DECISION
Respondent argues that Appellant’s failure to perform his contract according to its terms, coupled with Appellant’s abandonment of performance on August 31, 1995, justify the termination for default. Respondent further argues that excess reprocurement costs were properly assessed against Appellant after his default in performance since Respondent properly mitigated damages by competitively procuring the replacement contracts and awarding them to the lowest bidder. Appellant argues that the Postal Service official who administered his contract harassed him and discriminated against him because of his age (over 65) and because he is male (the postmaster/administrative official is female).
Respondent has the burden of proving that the termination for default was justified, but once it shows that Appellant failed to perform according to the terms of the contract, the burden shifts to Appellant to present evidence of excusable causes. Jerome Bailey, PSBCA No. 3628, 95-1 BCA ¶ 27,447 at 136,742; see also Patricia J. Stevens, PSBCA No. 3272, 94-1 BCA ¶ 26,419 at 131,429, recon. denied, 94-2 BCA ¶ 26,951; Pamela J. Sutton, PSBCA No. 1622, 88-3 BCA ¶ 21,031 at 106,237.
Appellant’s failure to perform his contract as of August 31, 1995, standing alone, justifies the decision to terminate the contract for default. Appellant did not notify any Postal Service official of the reason for his abandonment of his route and failed to respond to the repeated attempts of Postal Service officials to contact him immediately after he failed to arrive at the Post Office to perform the required service. (Finding of Fact No. (FOF) 5). Appellant has failed to offer any evidence that would excuse or even explain the reason for his abandonment of performance on August 31, 1995. Furthermore, Appellant did not offer any evidence to substantiate his allegations of harassment and discrimination. Under these circumstances, the contracting officer’s decision to terminate the contract for default was proper. See Jerome Bailey, supra.
Respondent solicited bids from six and then from eight potential contractors for two successive emergency replacement contracts after Appellant’s default in performance. Respondent then awarded these reprocurement contracts to the low or only bidder. Services were rendered and payment made to the emergency contractors. (FOF 6, 7). Respondent charged Appellant with the incrementally greater daily cost of the replacement contracts, $8.33/day for a 94-day period of time, rather than the full term of Appellant’s defaulted contract. In addition, Appellant was assessed $325.00 in administrative costs incurred in reprocuring two replacement contracts. (FOF 9). Under these facts, Respondent has made a prima facie case of reasonably mitigating the excess costs of reprocurement. See Bowman’s Transport Co., PSBCA Nos. 1088, 1089, 1092, 84-1 BCA ¶ 17,217 at 85,730. Appellant has offered no evidence to rebut the reasonableness of the excess cost assessment, the administrative costs charged to Appellant, or Respondent’s mitigation efforts in reprocuring the emergency replacement contracts. Therefore, the reprocurement costs incurred by Respondent as a result of Appellant’s default may properly be assessed against Appellant.
The appeal is denied in its entirety.
William K. Mahn
Administrative Judge
Board Member
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur:
David I. Brochstein
Administrative Judge
Vice Chairman
[1] The $8.33 per day figure was obtained by adding the cost of HCR No. 583FU (six days at $65.00/day, equaling $390.00), and HCR No. 583GU, at an annual rate of $16,000.00, to arrive at an aggregate annual rate of $16,390.00. The difference in the annual rate of Appellant’s contract, $13,340.00, and $16,390.00 equals $3,050.00. Thus, the incrementally greater daily cost of the replacement contracts was $8.33 per day ($3,050.00 divided by 366 days). (Declaration of Robert J. Saxton).
[2] The 94-day period represents the time it typically takes to solicit and award a permanent replacement contract under the normal bidding process (84 days), plus 10 additional days attributed to the delay caused by the need to solicit two emergency service contracts as a consequence of Appellant’s default in performance. (Id.).