June 2, 1998
Appeal of
KIMBERLY DAWN GEE
Under Contract No. HCR 79762
PSBCA Nos. 4073 and 4095
APPEARANCE FOR APPELLANT:
Kimberly Dawn Gee
1609 Nolan
Big Spring, TX 79720-5603
APPEARANCE FOR RESPONDENT:
Patrice R. Dickey, Esq.
Memphis Law Office
United States Postal Service
225 North Humphreys Boulevard
Memphis, TN 38166-0170
OPINION OF THE BOARD
Appellant, Kimberly Dawn Gee, has appealed the decision of the contracting officer terminating for default her mail delivery contract after discovering that Appellant had discarded mail. Appellant has also appealed a second final decision of the contracting officer assessing excess reprocurement costs in the amount of $300. At the election of the parties, the appeals have been consolidated and are being decided on the record without an oral hearing, pursuant to 39 C.F.R. §955.12.
FINDINGS OF FACT
1. On June 15, 1995, Respondent, the United States Postal Service, awarded Appellant highway transportation service contract HCR 79762 for the box delivery of mail (115 boxes), between Big Spring and Ackerly, Texas. The contract commenced on July 1, 1995 and was to end on June 30, 1999. (Appeal File Tab (AF) E).
2. The contract contained Basic Surface Transportation Services Contract General Provisions, Postal Service Form 7407, July 1992, which in clause 4, SERVICE REQUIREMENTS AND PROHIBITIONS, required Appellant to "carry all mail tendered for transportation under this contract, whatever may be its size and weight, with certainty, celerity and security" and to "[d]eposit all mail matter received for that purpose from a post office into the appropriate mail boxes of customers placed along the line of the route." Furthermore, under clause 8, ACCOUNTABILITY OF THE CONTRACTOR, Appellant was accountable for "loss, rifling, damage, wrong delivery, depredation upon, and other mistreatment of mail …." (AF E).
3. General Provisions clause 16 of the contract, TERMINATION BY THE POSTAL SERVICE FOR DEFAULT, permitted the Postal Service to terminate the contract for default:
"(1) For Contractor's failure to perform service according to the terms of the contract;
(2) If the Contractor is the subject of administratively determined violations of the Postal laws and regulations and other laws related to the performance of the service;
* * *
(6) For the Contractor's failure to properly account, deliver and pay over moneys, mail and other property pursuant to Clause 8 of this contract;
(7) If the Contractor . . . is not reliable, trustworthy or of good character." (AF E)
4. By letter dated September 24, 1996, the Big Spring Postmaster informed Appellant, and all other mail transportation contractors at his post office, that undeliverable bulk business mail (UBBM) was to be placed in the UBBM case for verification and proper disposal prior to commencing their route for the day (AF C7).
5. In November 1996, Appellant's supervisor began to suspect that Appellant was throwing away deliverable bulk business mail (BBM). The supervisor began counting Appellant's BBM each morning before it was given to Appellant for delivery. The supervisor also counted the amount of BBM Appellant returned each day and labeled "undeliverable" to be thrown away. The supervisor determined that on many occasions Appellant was failing to deliver most, if not all, the BBM she was given for delivery. (AF C4, C8).
6. On November 25, 1996, the Big Spring Postmaster held a discussion with Appellant and other transportation contractors concerning the sanctity and disposition of mail (AF C4).
7. Approximately the middle of December, the Big Spring Postmaster personally gave a copy of his September 24, 1996 letter concerning disposal of UBBM (see Finding 4), to Appellant and every other carrier at the post office. His purpose for doing so was to insure that all the carriers were aware that Postal Service policy prohibited the disposal of mail in any way other than to properly place the UBBM at their cases each day prior to leaving for their routes. (AF C5).
8. At the request of the Big Spring Postmaster, the Postal Inspection Service began an investigation of Appellant's treatment of the BBM she was given for delivery. The assigned inspector contacted one of the business mailers that sent BBM for delivery on Appellant's route and verified that the amount of BBM given to Appellant for delivery coincided with the amounts counted by Appellant's supervisor on the same dates. (AF C3).
9. The inspector also interviewed Appellant. She initially stated that she had not disposed of any deliverable mail. However, later in the interview Appellant stated that she may have occasionally taken BBM on her route and brought it back without delivering it. She stated that she may have done this once a month. She continued to insist, however, that the returned BBM was excess or double coverage of the BBM needed for her route. (AF C11, C12).
10. On January 4, 1997, after receiving the inspector's investigative memorandum, the Big Spring Postmaster suspended Appellant from performing her contract (AF D).
11. On February 18, 1997, the contracting officer terminated Appellant's contract for default, effective January 4, 1997, because of Appellant's failure to faithfully account for and deliver the mail (Declaration of A.T. Mills; AF B).
12. On June 25, 1997, the contracting officer issued a final decision assessing Appellant $300 in excess reprocurement costs. The amount of $300 was based on the hourly wage cost and hours worked by various individuals in awarding the reprocurement contract. (Declaration of A.T. Mills; Exhibit B to Notice of Appeal in PSBCA No. 4095).
13. Appellant filed a timely notice of appeal for each final decision.
DECISION
BCA No. 4073
Appellant contends (in her Complaint)[1], that her contract was wrongfully terminated because she always delivered all the BBM addressed to customers on her route and that any BBM she returned to the post office was excess to the amount needed for the customers on her route. Appellant further contends that since she was wrongfully terminated, she is not responsible to repay any excess reprocurement costs. Appellant seeks repayment of lost earnings as a consequence of Respondent's alleged breach of her contract, reinstatement of her contract and attorney fees.
Respondent argues that the decision to terminate Appellant's contract for default is justified by Appellant's violation of her responsibility to deliver the BBM she received for the customers on her route. Respondent further argues that Appellant failed to submit any evidence that her actions were excusable or that the contracting officer abused his discretion in terminating her contract. Finally, Respondent argues
that because the contract was properly terminated for default, it is entitled to the reprocurement costs assessed by the contracting officer.
Respondent has the burden of proving that the termination for default was justified, but once it shows that Appellant failed to perform as required by 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, or that the termination was an abuse of discretion, Jesse A Farmer, PSBCA No. 2702, 91-3 BCA ¶ 24,181; Quality Environment Systems, Inc., ASBCA No. 22178, 87-3 BCA ¶ 20,060 at 101,569.
Appellant's repeated failure to deliver the BBM destined for the customers on her route, as documented by her supervisor, justifies the decision to terminate her contract for default. Appellant's allegation that the BBM she returned to the post office and then discarded was extra, was refuted by her supervisor's counts of the BBM given to her for delivery, compared with his counts of the BBM she returned and discarded on the same dates (Finding of Fact No. (FOF) 5). The accuracy of the supervisor's record of BBM given to Appellant for delivery was verified by the investigating Postal Service Inspector (FOF 8). It is apparent from the record kept by Appellant's supervisor that Appellant was failing to deliver most, if not all, the BBM given to her for delivery on the dates investigated by her supervisor (FOF 5).
Appellant's responsibility for BBM was made clear to her by the September 24, 1996 letter she received from her postmaster (FOF 4, 7), as well as in the discussion the postmaster held with Appellant and the other highway transportation contractors on November 25, 1996 (FOF 6). Appellant's failure to deliver the BBM given to her for the customers on her route was a serious, knowing violation of the Postal Service delivery requirements that she was required to follow under her contract and justifies the termination. Larry J. Miller, PSBCA No. 3632, 95-1 BCA ¶ 27,448; see also Francis E. Fekkers, PSBCA No. 1259, 84-3 BCA ¶ 17,557; Larry J. Bunker, PSBCA No. 1067, 83-1 BCA ¶ 16,542. Appellant has not shown that her actions were excusable or that the contracting officer abused his discretion in deciding to terminate the contract.
Accordingly, Appellant's appeal of the decision to terminate her contract for default is denied.
BCA No. 4095
Respondent seeks $300 in excess reprocurement costs. In support of this claim, Respondent has submitted a single "memo for the record" which sets forth the hourly wage cost and hours worked by various individuals in awarding the reprocurement contract. Respondent did not, however, submit any information concerning the cost of the reprocurement contract itself.
In claiming reprocurement costs, Respondent has the burden of demonstrating that: (1) the reprocured services are the same or similar as those involved in the terminated contract; (2) the Postal Service actually incurred excess costs; and, (3) the Postal Service acted reasonably to minimize the excess costs incurred. See Cascade Pacific International v. United States, 773 F.2d 287, 293 (Fed. Cir. 1985); Arthur L. Johnson, PSBCA No. 3894, 97-1 BCA ¶ 28,773; Jim Lovett, PSBCA Nos. 3633, 3634, 95-1 BCA ¶ 27,516. The single memorandum submitted by Respondent, which identifies how the amount of $300 was determined, does not satisfy this burden. Lacking any evidence regarding the costs of the reprocured contract, we cannot say that any excess costs were reasonably incurred by Respondent as a result of Appellant's default of her contract, i.e., that the total of the replacement contract plus the $300 incurred to award that contract exceeded the amount of the terminated contract. Therefore, we cannot conclude that Respondent is entitled to recover these costs.
Accordingly, Appellant's appeal of the final decision assessing $300 in excess reprocurement costs is sustained.
William K. Mahn
Administrative Judge
Board Member
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur:
David I. Brochstein
Administrative Judge
Vice Chairman