January 13, 1999
Appeal of
INNOVATIVE DRY WASH SYSTEM, INC.
Under Contract No. 475630-96-R-0703
PSBCA No. 4109
APPEARANCE FOR APPELLANT:
Andreá M. Link
APPEARANCE FOR RESPONDENT:
Mark E. Dennett, Esq.
OPINION OF THE BOARD
Appellant, Innovative Dry Wash System, Inc., has appealed the default termination of its contract with the United States Postal Service, Respondent, for cleaning Respondent’s delivery vehicles at a number of postal facilities. Appellant also appealed the contracting officer’s denial of its claim for payment for cleaning services it performed before and immediately after the contract was terminated.
At the parties’ election, this appeal was submitted on the record without an oral hearing. The parties have submitted evidence and briefs in support of their positions. Both entitlement and quantum are at issue.
FINDINGS OF FACT
1. On December 27, 1995, Respondent awarded Appellant a two-year contract for washing 232 Postal Service vehicles located at six postal facilities in Hollywood, Florida (Appeal File, Tabs (“AF”) A, B).
2. Under the contract, Appellant was entitled to payment of $8 for cleaning each of the smaller vehicles and $11-13 for the larger vehicles. The larger vehicles were to be cleaned weekly and the smaller vehicles were to be cleaned every two weeks. (AF A, Contract Attachment 2, Contract Paragraph C.3).
3. The contract’s termination clause provided,
“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.” (AF A, Contract Clause G.9, TERMINATION ON NOTICE (Clause OB-581)(June 1988)).
4. The contract’s specifications required that the interior and exterior of the vehicles be thoroughly cleaned and that all road film be removed, and specifically mentioned that the tops of the smaller vehicles were to be cleaned. The windows were to be cleaned and wiped free of streaks. Vehicles not cleaned to the specification standards “will be cleaned again, if time allows, or payment will not be made for those vehicles not satisfactorily cleaned.” (AF A, Contract Paragraph B.1).
5. The inspection clause of the contract provided,
“Vehicles will be subject to inspection and acceptance by the contracting officer’s representative or a designee.
The contractor will be required to rewash and/or reclean any vehicle that is not serviced in accordance with the specifications . . . . If there is insufficient time to allow for rewashing/recleaning, the contractor will not be paid for the unacceptable service provided.” (AF A, Contract Paragraph E.1, INSPECTION AND ACCEPTANCE (VEHICLES) (Clause OB-513) (June 1988)).
6. Appellant intended to perform the contract cleaning services on the weekends. The contract required Appellant to propose an overall schedule for cleaning and to make arrangements with each postal facility so the vehicles would be left unlocked when Appellant intended to work. (AF A, Contract Paragraph C.2, FREQUENCY OF PERFORMANCE (VEHICLES) (Clause OB-560 (June 1988), Contract Paragraph B.1, VEHICLE WASHING/CLEANING SPECIFICATIONS)). However, Appellant was slow to submit a proposed cleaning schedule, and once one was established, Appellant frequently failed to appear when scheduled. When this occurred, Respondent’s vehicles were needlessly left unlocked over the weekend, subjecting them to possible vandalism (AF S, U). By letter of July 29, 1996, the contracting officer’s representative (“COR”) instructed Appellant to telephone the affected facility if Appellant would miss a scheduled cleaning so the office would not leave the vehicles unlocked (AF D, S, U).
7. On March 30-31, 1996, Appellant failed to clean the interior of 14 vehicles at one of the facilities, claiming they were locked. However, the vehicles had been left unlocked. (AF O, S).
8. On or about August 27, 1996, 15 vehicles Appellant listed as having been cleaned were not cleaned on the inside even though they had been left unlocked (AF D, S).
9. Over the course of the contract, the COR complained to Appellant about poor contract performance on many occasions (AF S; contra Appellant’s Legal Brief; Appellant’s Reply Brief), but Respondent did not make deductions from Appellant’s pay as permitted under the contract (Appellant’s Legal Brief).
10. On November 6, 1996, Respondent’s maintenance manager for the area visited the Hollywood facilities and concluded that Appellant was inadequately cleaning the interior of the vehicles. The visors were dirty, the area around the doors and mail trays was dusty and the windows were streaked. He reported his results to the Hollywood Postmaster by letter dated November 8, 1996, and suggested that the COR meet with Appellant to discuss its performance. (AF C, D, U).
11. On November 8, 1996, the COR called Appellant’s vice president and discussed the problems with the cleaning of the Hollywood vehicles. The COR advised him to review the contract specifications to assure that the vehicles were cleaned according to the requirements of the contract. Appellant’s vice president stated that the company would do better in the future. (AF D, I, S).
12. The vehicles were scheduled to be cleaned on November 23 and 24, but Appellant failed to do so (AF D, S).
13. On November 26, the vehicle maintenance manager notified the contracting officer that Appellant’s performance was deteriorating. On November 27, 1996, the contracting officer called Appellant and advised Appellant’s vice president that Respondent was not satisfied with Appellant’s cleaning services. She advised that unless the vehicles were cleaned to Respondent’s satisfaction on the weekend of November 30-December 1, the next scheduled cleaning, Respondent would terminate the contract on one day’s notice. (AF K, L, Q, R).
14. On November 30 and December 1, Appellant visited four of the postal facilities and cleaned 124 vehicles. (AF K, L; Appellant’s Legal Brief).
15. None of the vehicles’ roofs were cleaned, and the windows were left streaked. On Monday, December 2, 1996, the vehicle maintenance manager and the COR inspected the vehicles at four of the facilities and reported their findings to the contracting officer:
“Numerous vehicle cabs not cleaned adequately; streaked windows, cab walls dirty, bottom of mail trays dirty, floors/step wells dirty, sun visors not cleaned.
Administrative vehicles not cleaned [at two of the facilities].
Roofs not cleaned - On a few vehicles, it appeared the roof was cleaned but only one foot in from the side of the vehicle.” (AF D; see AF I, S).
16. On December 3, 1996, after having been advised of the results of the cleaning over the previous weekend, the contracting officer determined that termination of the contract was in the best interest of the Postal Service and terminated Appellant’s contract effective December 5, 1996 (AF E, Q, R).
17. Appellant did not receive the termination notice before the weekend of December 7, and, on December 7, Appellant went to the Hollywood facilities and cleaned some of the vehicles (AF H, K, Q).
18. In a December 10, 1996 letter to the attention of the contracting officer, Appellant acknowledged the termination, expressed its disagreement with the action and requested immediate reinstatement of the contract (AF F, R).
19. In a January 29, 1997 letter, the contracting officer stated that she considered Appellant’s December 10 letter to be a claim in regard to reinstatement of the contract, and that based on Appellant’s record of performance she concluded that the termination of the contract was justified. She specifically denied Appellant’s claim for contract reinstatement and advised Appellant that the letter was her final decision. She included the final decision language advising Appellant of its right to file an appeal under the Contract Disputes Act. (AF G, R).
20. In January 1997, Appellant submitted invoices totaling $2,949 covering the cleaning services provided on the weekends of November 17, November 30 and December 7, 1996 (AF H, I, P, Q). Respondent paid the invoices for the November 17 cleaning, totaling $1,376 (AF I, J, P, Q), but declined to pay those for the November 30-December 1 cleaning, citing unsatisfactory service (AF J, P). Respondent agreed in a June 6, 1997 letter from the contracting officer to pay Appellant for the vehicles it actually cleaned inside and out on December 7—51 vehicles at a cost of $8 each and one vehicle at $13 for a total of $421 (AF L, P, Q).
21. By letter dated August 11, 1997, Appellant appealed the contracting officer’s June 6, 1997 partial denial of its claims for cleaning. In the letter, addressed to the Board of Contract Appeals using the contracting officer’s address, Appellant stated its contention that the contract was unjustly terminated and that it was improper not to pay the invoices in full. As relief, Appellant asked that the unpaid invoices be paid in full and that the contract be reinstated. (August 11, 1997 Notice of Appeal). The contracting officer forwarded the appeal to the Board, and it was docketed on August 26, 1997.
DECISION
Jurisdiction of the Board
Respondent argues that the Board does not have jurisdiction over Appellant’s challenge to the validity of the termination of its contract on one-day’s notice because Appellant failed to file a timely appeal of the contracting officer’s January 29, 1997 final decision. However, Appellant’s December 10, 1996 letter objecting to the termination and requesting reinstatement qualifies as a notice of appeal of the termination under Auburn Flying Service, PSBCA Nos. 1509, 1510, 86-3 BCA ¶ 19,273. Additionally, Appellant’s August 11, 1997 letter (Finding 21), specifically challenging the contracting officer’s refusal to pay its invoices, establishes jurisdiction over Appellant’s monetary claims. Therefore, the Board has jurisdiction over this appeal.
Validity of the Termination
Appellant argues that its performance was satisfactory and that it was not notified of any problems during the contract until the contracting officer’s November 27 call. It points to Respondent’s failure to make deductions from its pay for unsatisfactory work as evidence that its cleaning was satisfactory. Appellant seeks damages in the amount of $127,504, representing the amount it contends it would have been paid over the life of the contract remaining at the time of the termination, payment for all services it actually performed, and for a determination that it is an eligible contractor for Respondent’s future vehicle cleaning contracts.
The termination provision in this contract authorized the contracting officer to terminate the contract on one day’s notice when, in her judgment, the interests of the Postal Service required such action (Finding 3). Respondent has shown the contracting officer to have acted reasonably in terminating the contract. At the time she terminated the contract, she was aware that Appellant’s performance had not met the requirements of the contract (Findings 6, 7, 8, 10, 12), and that Respondent’s officials had advised Appellant on numerous occasions of their dissatisfaction with its below-standard performance (Findings 9, 13). [1] She knew also that Appellant’s performance had not improved notwithstanding Respondent’s officials’ directions and that Appellant had failed to perform at all on the weekend of November 23 when cleaning was scheduled (Findings 11, 12).
Nevertheless, she gave Appellant one last chance to bring its performance up to the specification requirements along with the explicit warning that a failure to do so on the November 30 through December 1 cleaning would result in termination (Finding 13). Appellant’s performance that weekend again failed to meet the requirements of the contract (Finding 15), and, thus, termination of the contract on one-day’s notice was in Respondent’s best interest. [2] See The General Store, PSBCA No. 3951, 98-1 BCA ¶ 29,573 at 146,603. The cumulation of performance deficiencies justified the contracting officer’s action. See The Four Roses Painting Co., PSBCA No. 1013, 83-1 BCA ¶ 16,541 at 82,251-252; Suburban Industrial Maintenance Co., ASBCA Nos. 23750, 25154, 85-2 BCA ¶ 18,148 at 91,096-097; Sentry Corp., ASBCA No. 29308, 84-3 BCA ¶ 17,601 at 87,687. Appellant has not shown that the election to terminate was made in bad faith or constituted an abuse of the contracting officer’s discretion.
Payment for Services Provided
Appellant has been paid for the cleaning it performed on November 17, 1996 (Finding 21). Appellant has not challenged the amount Respondent determined to be owing for that cleaning, and thus payment for the November 17 cleaning is not in issue. For the cleaning of 52 vehicles on December 7, Respondent has now paid Appellant (Finding 21), and Appellant has presented no evidence that other vehicles were cleaned on that date or that any other amount is owed. If there is any remaining portion of the claim related to the December 7 cleaning, it is denied because of a lack of proof. See National Aviation, PSBCA No. 800, 1981 PSBCA LEXIS 33, May 14, 1981.
This leaves payment for the cleaning of November 30 through December 1 at issue. Under the contract, Appellant was not entitled to payment for vehicles not properly cleaned (Findings 4, 5), and Respondent has demonstrated that Appellant failed to clean the vehicles according to the specification requirements—the roofs were not cleaned and the windows were left streaked (Finding 15). Accordingly, Respondent is not obligated to pay Appellant for cleaning the vehicles on November 30 through December 1.
The appeal is denied.
Norman D. Menegat
Administrative Judge
Board Member
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur:
David I. Brochstein
Administrative Judge
Vice Chairman
[1] That Respondent did not make deductions from Appellant’s pay for deficient cleaning as authorized under the contract (Findings 4, 5, 9), does not indicate a concession that the service was adequate. Respondent has presented ample evidence that Appellant’s performance did not meet the contract requirements.
[2] Appellant maintained that the vehicles were properly cleaned on the weekend of November 30. However, we accept Respondent’s evidence to the contrary—a contemporaneous report and a declaration under penalty of perjury of the COR, who personally inspected the vehicles (Finding 15).