March 11, 2003
Appeal of
CTM GROUP, INC.
PSBCA No. 4763
APPEARANCES FOR APPELLANT:
Timothy Orlando, Esq.
APPEARANCE FOR RESPONDENT:
David F. Wightman, Esq.
OPINION OF THE BOARD ON MOTION TO DISMISS
Respondent has filed a motion to dismiss this appeal for lack of jurisdiction, arguing that Appellant’s claim is one for conversion, a tort claim over which the Board has no jurisdiction. For the reasons explained below, we deny the motion. For the purpose of deciding the motion we make the following findings of fact, based on the current record.
FINDINGS OF FACT
1. On September 23, 1998, Respondent awarded Appellant a contract in the amount of $1,970,000 to upgrade the HVAC controls at Respondent’s Detroit Processing and Distribution Center (Appeal File, Tab (“AF”) K (Bates Page No. (“Bates”) 890)).
2. The contract contained the following provisions:
a. Clause F.2, Payment (Construction) (Clause B-48) (January 1997) (AF A (Bates 14), provides, in part,
“d. All material and work covered by progress payments will be the sole property of the Postal Service. However, this paragraph d does not (1) relieve the supplier of responsibility for all material and work for which payment has been made or for restoration of any damaged work or (2) waive the right of the Postal Service to require fulfillment of all the contract terms.”
b. Clause G.13, Permits And Responsibilities (Construction) (Clause B-47) (January 1997) (AF A (Bates 21), provides, in part,
“The supplier is responsible also for all materials delivered and work performed until completion and acceptance of the entire construction work, except for any completed unit of construction that may have been accepted.”
c. Clause G.31, Builder’s Risk Insurance (Clause FB-263) (March 1989) (AF A (Bates 25)), provides,
“The Postal Service does not carry Builder’s Risk Insurance coverage. The Contractor, at its own option and expense, may elect to provide this insurance for its work.”
d. Specification General Requirements 1.12, Storage and Shop (AF A (Bates 123)), provides, in part,
“d. The contractor is solely responsible for losses due to damage [or] theft of materials, equipment, tools, etc. stored at the project site, the contractors [sic] field office or in the USPS occupied facility.”
3. Appellant entered into a subcontract with Industrial Power Systems, Inc. (“IPS”), to perform the work. Appellant would administer the contract and handle the paperwork, but IPS was to obtain the performance and payment bonds and to perform the contract work on a turnkey basis. (Supplemental Appeal File, Tab (“SAF”) A (Bates 138, 143, 160-161)).
4. On September 2, 1999, Appellant notified IPS that its subcontract was terminated. The written notice warned IPS that access to the site by IPS or its subcontractors was revoked. It advised IPS to contact Appellant to arrange for an escort for a representative of IPS to recover its tools and equipment from the site. (AF K (Bates 1209)).
5. A copy of the termination notice to IPS was faxed to the contracting officer on September 2, 1999 (AF K (Bates 891, 1208); SAF B (Bates 241, 398)). Respondent’s officials also became aware of the termination through contacts by employees of the subcontractor and a telephone call from Appellant’s president (SAF B (Bates 398-399), C (Bates 524)).
6. After becoming aware that Appellant had terminated IPS and without notice to Appellant, Respondent’s officials permitted employees of IPS and its subcontractors to return to the work site to retrieve tools and equipment (SAF B (Bates 397-401), C (Bates 520-525)).
7. On April 4, 2000, Appellant sent Respondent a certified, equitable adjustment claim in the amount of $245,066 for the cost of replacing materials and equipment and recreating project documents it contended were removed from the site by IPS and its subcontractors during their return to the work site. The claim was twice amended and resubmitted, the last dated August 3, 2000, in the amount of $235,534.72. (AF C (Bates 377-384, 553-558)).
8. By final decision dated November 21, 2000, the contracting officer denied the claim, concluding that under the contract Respondent was not liable for materials, equipment or documents lost or stolen from the project. He further concluded that Appellant had not proved what, if any, material, equipment and documents were improperly removed from the site by subcontractors after Respondent became aware of IPS’s termination. (AF D (Bates 598-611)).
9. Appellant’s appeal of the November 21, 2000 final decision was docketed as PSBCA No. 4763.
DECISION
Appellant seeks recovery from Respondent for the cost of replacing the material, equipment and documents that Appellant alleges were taken from the work site by IPS. It argues that it was improper of Respondent to permit IPS to return to the site after the termination without alerting Appellant in advance. Appellant charges that by doing so, Respondent facilitated the loss of Appellant’s property, thereby increasing Appellant’s cost of performing the contract. Appellant claims it is entitled to an equitable adjustment for the cost of replacing its property.
Respondent has filed a motion to dismiss the appeal for lack of jurisdiction, arguing that the claim is for conversion of Appellant’s equipment, material and documents, which is a tort claim over which the Board does not have jurisdiction. However, the issue of responsibility for material, equipment and other property brought to the project site is addressed in the contract (Finding 2). Additionally, any implied duties Respondent may have had, including any duty to protect Appellant’s property and refrain from hindering Appellant’s performance, would also derive from the contract. See AFV Enterprises, Inc., PSBCA Nos. 2691, 3316, 01-1 BCA ¶ 31,388, citing Peter Kiewit Sons’ Co. v. United States, 138 Ct. Cl. 668, 151 F. Supp. 726, 731 (1957), and Fowler & Butts, PSBCA No. 2545, 91-1 BCA ¶ 23,391. Accordingly, the Board has jurisdiction to address the relative responsibilities of the parties under the contract for the equipment, material and documents allegedly removed from the site, even though elements of tort may be present in the claim. See Greater Eastern Holding Co., PSBCA No. 1128, 83-2 BCA ¶ 16,784; Jones, Inc., VABCA No. 1996, 84-3 BCA ¶ 17,608.
The motion is denied.
Norman D. Menegat
Administrative Judge
Board Member