January 29, 1999
Appeal of
MARY E. ST. CLAIR and MACK W. ST. CLAIR
Under Contract No. HCR 92263 and HCR 92264
PSBCA Nos. 4088 and 4089
APPEARANCE FOR APPELLANTS:
Mary E. St. Clair
Mack W. St. Clair
58727 Sunflower Drive
Yucca Valley, CA 92284-1281
APPEARANCE FOR RESPONDENT:
Elena V. Alejandre, Esq.
San Francisco Office
United States Postal Service
577 Airport Boulevard, Suite 200
Burlingame, CA 94010-2040
OPINION OF THE BOARD
Appellants, Mary E. St. Clair and Mack W. St. Clair, filed timely appeals of the decisions of the contracting officer to terminate for default two of the mail transportation contracts they held with Respondent, United States Postal Service. The parties have elected to submit the appeals on the record in accordance with 39 C.F.R. §955.12.
FINDINGS OF FACT
1. On June 7, 1996, Respondent renewed Contract Nos. HCR 92263 and HCR 92264 with Appellants. The term for each renewed contract was from July 1, 1996, through June 30, 1997. Contract No. HCR 92263 required Appellants to carry mail between Yucca Valley and Pioneertown, California. Contract No. HCR 92264 required Appellants to carry mail between Yucca Valley and Landers CPO, California. (Appeal File, Tab (AF) 1).
2. Clause 6, INSURANCE REQUIREMENTS, of each contract's General Provisions (Form 7407, July 1992), required that Appellants maintain continuously in effect a policy of liability insurance (with specified minimum coverages) for all vehicles used in performance of the contracts (AF 1B).
3. 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 service according to the terms of the contract or for the contractor's disobedience of the contracting officer's instructions. This clause further provided that if, after termination for default, it is determined for any reason that the contractor was not in default, or that the default was excusable, the rights and obligations of the parties shall be the same as if the termination had been issued pursuant to General Provisions clause 17, TERMINATION FOR CONVENIENCE. (AF 1B).
4. Clause 15 of the Statement of Service for each contract required Appellants to provide a vehicle containing 140 cubic feet of usable loading space. In addition, Appellants were required to have "readily available sufficient standby equipment of the type(s) listed . . . to permit vehicle maintenance, and to prevent delays in emergencies such as mechanical failure and poor weather conditions." (AF 2).
5. The Yucca Valley Postmaster was appointed the administrative official for both contracts (AF 2; Declaration of Bobby L. Mays).
6. On March 27, 1997, the Yucca Valley Postmaster informed the contracting officer that Appellants were using a vehicle on both contracts that did not meet the contracts' loading space requirement and that Appellants had not furnished proof of insurance on the vehicle when requested to do so (Declaration of Bobby L. Mays).
7. On the same date, during a telephone conference between Appellant, Mary E. St. Clair and the contracting officer, Ms. St. Clair stated that she was aware that the vehicle being used in performing the contracts did not meet contract requirements[1] and that unless the contracting officer told the Yucca Valley Postmaster to "leave her alone", she would cease performance of the contracts as of close of business on March 28, 1997 (AF 4; Declaration of Bobby L. Mays; Appellants’ Complaint).
8. After being informed by the contracting officer that the Yucca Valley Postmaster was only doing his job and that he would not tell the postmaster to "leave her alone", Ms. St. Clair stated that she would no longer perform service under the contracts after March 28, 1997. The contracting officer replied that her statement constituted an "anticipatory breach" of the contracts and that the contracts were terminated for default effective close of business on March 28, 1997. (Declaration of Bobby L. Mays).
9. Later on March 27, 1997, Ms. St. Clair mailed a letter to the contracting officer in which she explained that she had reconsidered her previous statements and would, if permitted to do so, continue to perform the contracts until their term expired on June 30, 1997. When her attempts to "fax" the letter to the contracting officer failed, she tried later that day to reach the contracting officer by telephone. In his absence, she read the contents of the letter to Mark Bisio, another employee in the same office as the contracting officer[2]. (AF 5, 7; Appellants’ Complaint).
10. Respondent immediately began efforts to obtain replacement service for the service provided by Appellants under their contracts and, beginning on March 29, 1997, Postal Service personnel performed HCR 92264 and an emergency contractor performed HCR 92263. (AF 4; Appellants’ Complaint).
11. By final decisions dated April 1, 1997, the contracting officer terminated the contracts for default, effective close of business March 28, 1997. The contracting officer had not seen Appellants' letter of March 27, 1997, nor was he aware of the conversation between Ms. St. Clair and Mr. Mark Bisio prior to the effective date of the terminations. (AF 6; Declaration of Bobby L. Mays).
DECISION
Respondent argues that its decision to terminate the contracts for default was justified by Appellants' anticipatory repudiation of the contracts when Ms. St. Clair stated in the telephone conversation with the contracting officer that she would no longer perform the contracts after the close of business on March 28, 1997.
Appellants argue that the decision to terminate the contracts for default was improper and should be converted to terminations for convenience because Ms. St. Clair retracted the anticipatory breach in the letter sent on March 27, 1997, and the contracting officer should have received this letter before issuing his final decision on April 1, 1997. Appellants further argue that reading the letter to Mr. Bisio constituted sufficient notice to the contracting officer of Appellants' willingness to continue performance.
Respondent counters that Ms. St. Clair's attempt to notify the contracting officer that she had changed her mind later that day was ineffective because her letter never arrived until after he issued the final decision on April 1, 1997, and because the contracting officer had no knowledge of Ms. St. Clair having orally conveyed the contents of the letter to a Postal Service employee in his office.
To constitute an anticipatory repudiation of the contracts, there must be an unequivocal manifestation by the contractor of an intention not to perform. See B & E Mail Transport, Inc., PSBCA Nos. 971, 973, 974, 82-2 BCA ¶ 15,965; see also, Fairfield Scientific Corp., ASBCA No. 21151, 78-1 BCA ¶ 13,082, recon. denied 78-2 BCA ¶ 13,429. Ms. St. Clair's discussions with the contracting officer on March 27, 1997, constituted an unequivocal manifestation of an intent not to perform (Finding of Fact No. (FOF) 7). Although a contractor may, in certain circumstances, retract the repudiation, it must do so prior to the time performance is due or the Government materially changes its position. See Gerald Davy, PSBCA No. 3270, 94-2 BCA ¶ 26,690; see also What Mac Contractors, Inc., GSBCA No. 4766, 78-2 BCA ¶ 13,279 and authorities cited therein.
In this case, Respondent acted promptly after the oral repudiation to obtain replacement services for the services being provided under Appellants’ contracts, concluding those arrangements in time to provide for replacement service on March 29, 1997 (FOF 10). Those arrangements were made before service was to begin on March 29 and, therefore, before the contracting officer heard of Appellants’ attempted retraction[3] (FOF 11). In these circumstances, the attempt by Appellants to retract the repudiation was ineffective and the terminations for default must be upheld.
The appeals are 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 vehicle Appellants primarily used to perform the contracts had a mechanical breakdown. Although Appellants had a backup vehicle that met contract requirements, the keys to that vehicle had been misplaced, and Appellants’ employee was temporarily using her own vehicle. (Appellants’ Complaint).
[2] Appellants did not submit any evidence or otherwise explain whether Mr. Bisio had any responsibility with respect to their contracts.
[3] Although Appellants argue that they orally informed Mark Bisio of their attempted retraction on March 27, they have not shown that Mr. Bisio was a person whose knowledge of the retraction should be imputed to the contracting officer or that Mr. Bisio had a duty or the opportunity to convey the information to the contracting officer.