June 15, 1998
Appeal of
ANTHONY A. HOLTON
Under Contract No. HCR 89034
PSBCA No. 4048
APPEARANCE FOR APPELLANT:
Bruce A. Spanner, Esq.
Miller, Mertens & Spanner
1319 Lee Boulevard
Richland, WA 99352-4191
APPEARANCE FOR RESPONDENT:
Robert E. O'Connell, Esq.
San Francisco Office
United States Postal Service
577 Airport Blvd., Suite 200
Burlingame, CA 94010-2040
OPINION OF THE BOARD
Appellant has filed a timely appeal of the contracting officer’s final decision denying his claim for an economic price adjustment to his contract with Respondent, United States Postal Service. Appellant claims he is entitled to the price adjustment because of the decision by Las Vegas Postal Service officials to prohibit highway transportation contractors from parking their vehicles at the postal facility when not in use. A hearing[1] was held in Las Vegas, Nevada on September 30, 1997. Both entitlement and quantum[2] are at issue in this appeal.
FINDINGS OF FACT
1. Appellant has performed mail transportation services for Respondent under Contract No. HCR 89034 since some time prior to 1987 (Transcript pages (Tr.) 55, 56).
2. Until June 1987, the “head out” point for contract No. HCR 89034 was the Las Vegas General Mail Facility (GMF), located behind the Circus Circus hotel. The Postal Service allowed highway transportation contractors, including Appellant, to park their trucks at this facility while not in use. (Joint Stipulation (Stip.)).
3. In June 1987, the head out point for HCR 89034 was changed to the Las Vegas Processing & Distribution Center (P&DC). This change in head out point was accomplished by a negotiated service change to the contract. (Tr. 58; Stip.).
4. Appellant, as well as the other highway transportation contractors affected by the change in head out point, were informed at the time of the change that they could park their trucks at the Las Vegas P&DC when not in use. (Tr. 116-119; Stip.).
5. However, Appellant never parked the truck at the Circus Circus GMF or the Las Vegas P&DC when not in use. Instead, he parked the truck used in HCR 89034 at his own parking facility. (Tr. 61, 62, 101, 102).
6. Appellant did not include any off-site parking costs in the service change he negotiated as a result in the change to the Las Vegas P&DC (Tr. 58).
7. HCR 89034 was renewed by Respondent, effective July 1, 1995, for a four year term (Appeal File Tab No. (AF) 7). In renewing the contract, Appellant did not include any costs associated with parking the truck off-site when not in use (Stip.).
8. Paragraph 18C of the renewal contract (PS Form 7447), stated, “[t]he contract rate must include all elements of cost the contractor expects to incur in performing the service.” (AF 7).
9. Each renewal contract also included Basic Surface Transportation Service Contract General Provisions (PS Form 7407, July 1992), which at clause 11 ADJUSTMENT OF COMPENSATION, provided that the contract’s “compensation may be adjusted by mutual agreement of the Contracting Officer and the Contractor in accordance with the provisions of this clause and the Management Instruction Governing Adjustments . . . which is hereby incorporated by reference.” (AF 7).
10. The applicable Management Instruction, PO-530-89-09, Economic Pay Adjustments For Advertised Highway and Inland Domestic Waters Contracts (11/03/89), provided a general policy that allowed “adjustments in the rate of compensation when changed economic conditions or operational requirements occur over which the contractor has little or no control, subject to the provisions of this instruction.” The Management Instruction also states, however, that it only applies to changes in costs due to changed economic conditions or operational requirements, and does not apply to “cost increases for items that were omitted in the original or renewal cost statement.” (Respondent’s Supplemental Appeal File Tab No. (RSAF) 1).
11. By memorandum dated July 5, 1996, the contracting officer informed highway transportation contractors at the Las Vegas P&DC, that effective August 8, 1996, they could no longer park their trucks at the facility when not in use. Appellant received no advance notice of the change in on-site parking policy. (Tr. 72, 161; Stip.; AF 5a).
12. Since Appellant never utilized the opportunity to park on-site, this change did not increase his parking or other costs. After the change in parking policy, however, Appellant began paying his driver for the time spent driving between the off-site parking location and the Las Vegas P&DC. (Tr. 87).
13. On August 29, 1996, Appellant submitted a claim for the additional wage costs he associated with the decision by Postal Service officials to prohibit on-site parking (AF 4).
14. By final decision dated October 28, 1996, the contracting officer denied Appellant’s claim (AF 3).
15. On January 14, 1997, Appellant filed a timely appeal of the contracting officer’s decision (AF 2).
DECISION
Appellant argues that he is entitled to an economic price adjustment of his contract because the change in parking policy was a “changed economic condition or operational requirement,” as defined in Management Instruction PO-530-89-09, over which he had no control. Appellant argues that he was not aware of any impending changes in the on-site parking policy at the time of renewing his contracts in July 1995, and that he did not include, and should not have included, any off-site parking costs in his renewal bids. Appellant further argues that he detrimentally relied on the assurances of Postal Service officials in 1987 that on-site parking would be available at the Las Vegas P&DC. This reliance, Appellant further argues, was reinforced by being allowed the opportunity to park on-site for over nine years after the move from the “Circus Circus” GMF.
Respondent argues that since Appellant’s contract does not require the Postal Service to provide parking, he is not entitled to compensation for being denied the right to park on-site. Respondent further argues that it was unreasonable for Appellant to continue to rely on the Postal Service allowing on-site parking because he had not received any assurance from the contracting officer that on-site parking would continue to be provided. Respondent points out that an economic adjustment to the contract is not allowed by the Management Instruction for bid errors or omissions from costs statements (see Finding of Fact No. (FOF) 10), and argues that allowing recovery would adversely impact the competitive bidding process.
Appellant was historically provided the opportunity to park on-site at the Las Vegas P&DC. However, by his own admission, he never took advantage of that opportunity (FOF 6). Thus, when Respondent withdrew permission to park at the Las Vegas P&DC, Appellant's contract operations were unaffected and he did not
experience any change in circumstance that would justify an increase in compensation.
Appellant cites 29 C.F.R. §790.8(a) for the proposition that Appellant’s drivers are now engaged in “work of consequence” of the employer and are due wages for that work. However, since Respondent's change in the on-site parking policy had no effect on Appellant's manner of contract performance (Appellant's drivers performed the contract in the same manner after the change in parking policy as they did before the change), he has failed to establish that any additional wages he now pays his drivers are the result of Respondent's change in parking policy.
Accordingly, this appeal is denied.
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 hearing in this appeal was consolidated with the hearing in PSBCA No. 4044 and PSBCA No. 4045.
[2] The parties have entered into a stipulation as to the methodology for computing quantum. However, the Board is asked to make findings with respect to the mileage to the off-site parking facilities obtained by Appellant and the time necessary to travel from the off-site parking location to the Las Vegas Processing & Distribution Center. (Transcript pages (Tr.) 108-114; Joint Stipulation).