May 15, 2001
Appeal of
WILCOX OVERLAND XPRESS
Under Contract No. HCR 18011
PSBCA No. 4527
APPEARANCE FOR APPELLANT:
Robert C. Wilcox
APPEARANCE FOR RESPONDENT:
Daniel M. Curts, Esq.
OPINION OF THE BOARD
Appellant, Wilcox Overland Xpress, has filed a timely appeal of the decision of the contracting officer denying Appellant’s claim for additional compensation under a highway transportation contract with Respondent, United States Postal Service. The parties elected to submit the case on the record pursuant to 39 C.F.R. §955.12. Both entitlement and quantum are at issue.
1. This dispute arose under Contract No. HCR 18011 Appellant entered into with the United States Postal Service for the transportation of mail between Respondent’s Lehigh Valley Processing & Distribution Center, in Pennsylvania, and Respondent’s Binghamton, New York facility, with intermediate stops in Wilkes Barre and Scranton, Pennsylvania. Performance under the contract was to commence on July 1, 1998, and continue to June 30, 2002. As of December 1999, the estimated annual mileage was 153,240, and the contract price was $175,721 per annum. (Appeal File tabs (AF) 8, 10, 11).
2. The contract specifies, at clause B.2, VEHICLE REQUIREMENTS AND SPECIFICATIONS, that the contractor provide a single two-axle tractor and a 45-foot tandem axle trailer. In addition, clause H.8, CHANGES (TRANSPORTATION) (Clause B-65) (January 1997), of the contract provides, in pertinent part:
“b. Extra Trips
An extra trip is an additional trip of service operated on an infrequent basis over the same route or part as normally provided under the terms of the contract. Extra trips shall be negotiated in advance of performance when the contracting officer deems appropriate. However, the contracting officer may order the supplier to perform such extra service at pro rata pay. If no rate of pay for extra trips has been negotiated in advance, the contractor shall nonetheless perform such extra trips as are ordered by the contracting officer and may, on an after-the-fact basis, obtain a lump sum reimbursement for the difference between the costs incurred as a direct result of performing such extra trips and pro-rata payment for such trips, provided that such claim[ed] costs are adequately supported by documentary evidence furnished to the contracting officer. Claims for compensation above pro-rata pay for extra trips must be filed in writing with the contracting officer, accompanied by full supporting documentation of costs, no later than 90 days after the performance of such extra trips. When the contracting officer has ordered several extra trips under a single order, the 90-day period begins on the date of performance of the last trip performed under such order. Failure to agree to such compensation above pro-rata pay shall be resolved under the Claims and Disputes clause.” (AF 10, 11).
3. In early December 1999, Respondent’s officials informed Appellant that it would be required to perform 14 extra trips during the Christmas season that year (Declaration of Peter J. Bacola).
4. Appellant responded on December 6, 1999, and offered to divert another of the company’s trucks from other business for a 14-day period to perform the 14 additional trips for a lump sum of $1,000 more than the pro rata, or per-mile rate specified in the contract (AF 7).
5. The contracting officer rejected this offer in a telephone conversation with Appellant on December 9, 1999, and informed Appellant’s principal that he could submit a claim for any additional expenses he incurred (Declaration of Peter J. Bacola).
6. Appellant performed 14 extra trips during the period running from December 11 to 24, 1999, utilizing a second tractor and trailer that were identical to the vehicles used in performing the basic contract. Each trip involved approximately 314 miles roundtrip, for a total of 4,396 miles. (Declaration of Robert C. Wilcox; AF 9; Appellant’s Supplemental Evidence).
7. On January 3, 2000, Appellant submitted a claim for reimbursement in the amount of $1,855.34[1] for its costs in excess of pro rata for the extra trips. Although the total claimed amount was itemized, Appellant did not submit any documentation to support the amounts claimed. (AF 6).
8. By letter dated January 11, 2000, the contracting officer informed Appellant that it must furnish documentation for the additional costs claimed to perform the extra trips. Specifically, the contracting officer requested documentation to support the claim for additional labor, operational and fuel costs, as well as documentation supporting additional vehicle registration, general overhead and insurance included in Appellant’s claim. (AF 5).
9. On January 27, 2000, Appellant submitted to the contracting officer a revised claim including one additional trip, which was inadvertently omitted from the previous claim. Appellant also furnished documentation to support its insurance and registration claim. (AF 4).
10. By final decision dated February 14, 2000, the contracting officer denied Appellant’s claim for any costs associated with the 14 additional trips performed in December 1999, in excess of a pro rata payment (AF 3). Appellant filed a timely appeal of the contracting officer’s final decision (AF 2).
11. Appellant received a pro rata payment $4,973.68 for the 14 extra trips (subsequently reduced by $128.43, see FOF No. 12, infra). However, Appellant incurred $6,162.03 in costs in performing the 14 extra trips over a 14-day period in the month of December 1999. The costs incurred included 1/24[2] of the annual insurance ($268.50), registration ($79.69), and general overhead costs ($207.74) of the vehicle used.[3] Appellant also incurred vehicle depreciation costs of $1,208.06[4]; fuel costs of $1,098.21; and labor costs of $3,299.83. (Declaration of Robert C. Wilcox; AF 8).
12. By modification dated May 10, 2000, the Postal Service unilaterally determined that the per trip roundtrip mileage had been 306 miles vice 314 miles for the 14 extra trips, and deducted $128.43 from Appellant’s pay to commensurately reduce the pro rata payment previously made.[5] (Appellant’s Supplemental Evidence).
Appellant argues that the additional vehicle it had to use to perform the extra trips in December of 1999 had certain identified fixed annual costs that would not be compensated by a pro rata payment based on the contract’s estimated annual mileage of 153,240 (12,770 miles per month), since the vehicle was used for far fewer miles (4,396) during the month it was used for the 14 extra trips. Instead, Appellant argues it is entitled to recover one twelfth of the fixed annual costs of the vehicle used to perform the 14 extra trips, plus other costs such as gasoline and labor hours. Appellant further argues that since the Postal Service previously approved the Cost Statement Appellant submitted at the commencement of the contract, the general overhead costs associated with an identical vehicle are reasonable.
Respondent argues that a pro rata payment fairly compensates Appellant for the extra trips and further, that Appellant failed its burden to prove that the costs claimed were actually incurred.
In accordance with the contract’s CHANGES clause, Appellant was entitled to recover “the difference between its costs incurred as a direct result of performing such extra trips and the pro rata payment for such trips, provided that such claim[ed] costs are adequately supported by documentary evidence furnished to the contracting officer.” (FOF 2). Appellant has supported the costs it claims in a declaration under penalty of perjury (FOF 11). Although Respondent argues that Appellant did not prove its claimed costs, it offered no evidence to dispute the costs incurred by Appellant. We conclude, therefore, that Appellant met its burden of proving the costs it claims over and above the pro rata payment made by Respondent for the 14 extra trips ordered by Respondent in December 1999.
The second vehicle Appellant used in performing the 14 extra trips was driven approximately 4,396 miles in performing the extra trips (FOF 6). However, the pro rata rate in Appellant’s contract is based on a vehicle being driven 153,240 miles per year, or 12,770 per month, thereby allowing the contractor to amortize the fixed costs associated with operating the vehicle over a far larger number than the mileage of the vehicle used in performing the extra trips. It is clear, therefore, that Appellant would not recover the costs associated with operating this second vehicle if payment were made at the contract’s pro rata rate. Appellant furnished documentary evidence in January 2000 of its annual insurance and registration costs associated with the additional vehicle used in performing the extra trips. Similarly, Appellant’s claimed overhead costs were based on the Cost Statement previously approved by Respondent for an identical vehicle used in performing the basic contract. (FOF 8). Payment of 1/24 of these annual fixed costs represents a reasonable amortization of the actual costs Appellant incurred in performing the 14 extra trips during a 14-day period in the month of December 1999, while using a second vehicle.
Accordingly, the appeal is sustained. Appellant is entitled to recover $1,316.78. This amount represents the difference between the pro rata payment of $4,973.68 Appellant initially received, later reduced by $128.43[6] (See FOF 12), and the $6,162.03 in actual costs incurred by Appellant (FOF 11). Appellant may also recover Contract Disputes Act interest on the amount found due.
Board Member
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur:
David I. Brochstein
Administrative Judge
Vice Chairman
[1] Appellant’s initial claim submittal indicated that 13 extra trips were performed. However, on January 27, 2000, Appellant revised the claim to indicate 14 extra trips were performed (See Finding of Fact (FOF) No. 9).
[2] Although Appellant claimed one month of its fixed annual costs, Appellant’s December 6, 1999 offer to Respondent indicated that the truck used would be diverted from other business for only a fourteen-day period, or approximately 1/24 of a year (See FOF No. 6, supra).
[3] Since this vehicle was identical to the primary vehicle used in performing the contract, the general overhead costs incurred were the same overhead costs already approved by the Postal Service in the Cost Statement Appellant submitted at the commencement of the contract (Declaration of Robert C. Wilcox; AF 8).
[4] Appellant’s Declaration erroneously calculated costs based on 336 miles per extra trip instead of 314 miles per extra trip, for a total of $1,294.78 in vehicle depreciation costs. However, we have found 314 miles per extra trip to be the correct figure (See FOF No. 6).
[5] Although this unilateral modification occurred after the filing of this appeal, by Order and Memorandum of Telephone Conference dated August 1, 2000, the Board determined that since the $128.43 deduction related to the same 14 extra trips involved in this appeal, the propriety of the deduction would be considered in this appeal.