OPINION OF THE BOARD

Appellant, Christine Bell, appealed the termination of her mail delivery contract with Respondent, United States Postal Service, and Respondent’s claim against her for the costs of reprocuring the service.

A hearing was held, and the parties filed post-hearing briefs setting forth their positions. Entitlement only is at issue (Hearing Transcript, Page (“Tr.”) 12).

FINDINGS OF FACT

1. On August 14, 2001, Respondent awarded Appellant contract number HCR 93685 for the delivery of mail to 352 customers’ boxes along a route originating at the Prather, California Post Office. The contract term was from September 1, 2001, through June 30, 2005, at an annual rate of $22,299.[1] (Appeal File, Tab (“AF”) 1, Contract Sections B.1.4.f, G.1, DEFINITIONS (Clause B-1) (January 1997) (Modified); Tr. 83).

2. The contract’s termination provision authorized Respondent to terminate the contract for default if Appellant failed to perform the requirements of the contract. In the event of a default termination, the contract provided that Respondent could “acquire similar supplies or services . . . , and [Appellant] will be liable to the Postal Service for any excess costs.” Appellant would not be liable for excess costs, however, if the failure to perform the contract arose “from causes beyond the control and without [Appellant’s] fault or negligence.” Subsection f of the termination clause authorized Respondent to withhold from contract payments otherwise due Appellant “any sum the contracting officer determines to be necessary to protect the Postal Service against loss because of outstanding claims.” (AF 1, Contract Sections H.4, TERMINATION FOR DEFAULT (Clause B-13) (January 1997) (Modified), subsections a, f and H.5, EVENTS OF DEFAULT (Clause B-69) (January 1997), subsection a).

3. The contract required Appellant to carry and deliver the mail with certainty, celerity, and security in accordance with the schedule set forth in the contract (AF 1, Contract Section B.3.a).

4. After arriving at the post office each morning, Appellant was given mail for her route, which she was to sort into slots in her case, each slot representing a customer’s mailbox, in route-delivery order. She was to place a tag into each slot for which she had a package to remind her to deliver it when she reached the corresponding address on the route. Once Appellant had “cased” all the mail for her route, she could take the mail down and place it in trays, still in route-delivery order, to carry to her vehicle for delivery. Once on the route, she was to place the mail into the appropriate individual box at a residence or into the appropriate customer box in a “cluster” box, which contained many individual boxes. (Tr. 25-26, 44, 66-67, 75; AF 1, Contract Section B.3.j (1) (a)).

5. Early in the contract period, Appellant had a high rate of misdeliveries, delivering mail intended for one customer into the mail box of another. As early as October 2001, the Prather post office began keeping a log of her misdeliveries, which were reported by customers in person at the post office or by telephone. (Tr. 27-29; AF 16).

6. The administrative official designated in the contract to supervise and administer the contract on a day-to-day basis was the Prather Postmaster (Tr. 95, 107; AF 1, Contract Paragraph 6). From November 2001 through March 2002, this role was being filled by an Officer-in-Charge (“OIC”), due to the postmaster’s extended medical leave (Tr. 22-23, 49-50).

7. The OIC met with Appellant on January 10 and 24 and March 6, 2002, to express Respondent’s dissatisfaction with Appellant’s performance and to try to obtain satisfactory service on the route. Among the specific deficiencies addressed were the continued high rate of misdeliveries resulting in customer complaints and Appellant finishing the route one to two hours late almost every day. In the last meeting, the OIC noted at least 57 misdeliveries/complaints in just under the previous 60 days. In each meeting and in written follow-up letters, the OIC advised that if Appellant’s performance did not improve, the matter would be referred to the contracting officer for further action. (Tr. 27-33, 34-40; AF 16, 17, 19, 20; Stipulations (“Stip.”) 6-11).

8. The high rate of misdeliveries continued. The post office received almost daily customer complaints about Appellant’s delivery errors through customer visits to the office or telephone calls. In addition to souring customer relations, responding to these complaints created a burden on the small staff (postmaster and two part-time clerks) of the Prather Post Office. (Tr. 22-23, 41-42).

9. Beginning in March 2002, Appellant suspected that someone in the Prather Post Office was causing her delivery errors by moving mail around in her case when she was away. Her suspicion focused on one of the part-time clerks, whom she accused of sabotaging her efforts to deliver the mail accurately. (Tr. 46-49; AF 18; Complaint Exhibit 12, 13). In April 2002 she complained to the contracting officer orally and in writing that someone in the post office was trying to make her look bad (Tr. 132-133; AF 23, 24).

10. Throughout the remainder of 2002, performance deficiencies continued. These included misdeliveries, improperly placing deliverable or forwardable mail with waste mail slated for discard, taking mail out of the trash for personal use, holding mail that should have been forwarded and late finish of the route (AF 28, 35, 36, 37; Stip. 13).

11. Relations between Appellant and the employees of the post office were strained throughout the entire period of Appellant’s performance. The OIC treated Appellant discourteously, and after the postmaster resumed management of the office in March 2002, he was rude and abrupt with Appellant (Tr. 113, 117). Nevertheless, through meetings and written irregularity reports, the postmaster repeatedly advised Appellant of her errors and instructed Appellant on the performance requirements, although the tone of many of these communications was short (See AF 28, 36, 40, 41, 42, 43, 59, 60, 61, 62; Stip. 13).

12. Appellant eventually came to suspect that all of the employees of the office—the OIC during her tenure, the postmaster and the two clerks—were rearranging the mail in her case while she was away and thereby causing the delivery errors she continued to make on the route. She regularly reported her progress on the route and her suspicions of sabotage to the contracting officer, and the postmaster reported to the contracting officer his dissatisfaction with Appellant’s performance. (Tr. 95-96, 107-108, 127-130, 132, 135; AF 25, 27, 33, 34, 39; Complaint Exhibit 16).

13. On November 27, 2002, the contracting officer wrote to Appellant warning her to improve her work, including curtailing her misdeliveries of mail (AF 39; Stip. 14).

14. On December 13, 2002, the postmaster convened a formal meeting with Appellant to discuss the unsatisfactory service on the route, specifically on finishing the route late and the continued high number of misdeliveries of the mail. Appellant advised in a note to the postmaster that she could not perform the route any faster because she was double-checking the mail before every delivery on the route to make sure she was delivering the mail to the correct address (Appellant’s Exhibit 39). However, further misdeliveries followed in December (AF 42) and on January 3, 2003, the postmaster referred the matter to the contracting officer with copies of the recent irregularity reports asking that the contracting officer intervene (Tr. 73; AF 43).

15. On January 14, 2003, the contracting officer wrote to Appellant pointing out that her performance was unacceptable. He noted that she made misdeliveries almost daily since December 2, 2002, mistakes she should not be making after operating the route for more than a year. (AF 44; Stip. 15).

16. Irregularity reports (PS Form 5500) prepared by the postmaster chronicled Appellant’s performance deficiencies. From January 17 (after Appellant’s receipt of the contracting officer’s warning letter) through the end of February, there were many delivery errors. There were 18 instances of customer-reported complaints of misdelivery and of sometimes lengthy verbal complaints by upset customers taking up clerks’ and the postmaster’s time. There were 17 documented instances of other mishandling of the mail, including putting deliverable mail with forwardable mail, failing to scan mail at delivery, failing to take parcels out on the route for delivery, failure to deliver parcels that were taken out, putting deliverable, returnable and forwardable mail in waste (all of which resulted in delaying the affected mail and placing more demands on the postmaster and clerks to detect and correct the errors). (AF 59, 60).

17. For March, the irregularity reports reflected continued errors: 16 instances of customer-reported misdeliveries and 17 instances of other mishandling of the mail (AF 61). Appellant responded to many of these and the other irregularity reports issued to her throughout the contract, explaining her efforts to avoid mistakes, but seldom disputing that the mishandling of mail had occurred as reported in the irregularity reports (See AF 28, 36, 40, 41, 42, 43, 59, 60, 61, 62).

18. By letter of April 2, 2003, the contracting officer gave Appellant a final warning to improve her performance. He attached a spreadsheet setting out the customer complaints of misdeliveries and the other instances of mishandling of mail. He concluded, “You are notified that this is a final warning, and that the Postal Service may terminate your contract for failure to perform unless satisfactory service is restored within five (5) days of receipt of this letter and maintained for the remaining term of the contract.” (Tr. 78-80; AF 45; Stip. 16).

19. Appellant responded to the contracting officer, complaining that the postal employees at the Prather Post Office were sabotaging her efforts to deliver the mail accurately by moving around the mail in her case. She described her efforts to improve and assured the contracting officer she was trying to do a better job. She sought advice from the contracting officer about improving her performance and visited a neighboring post office to try to get some advice regarding delivery techniques from another mail delivery contractor. (Tr. 81-82, 87; AF 46, 47, 48; Complaint Exhibits 9-11, 14; App. Exh. 38).

20. On April 14, 2003, the contracting officer received a letter from a customer on the route complaining about recurring misdelivery of mail continuing for more than a year and explaining the inconvenience and financial difficulties this had caused her and her neighbors. She included a petition from a number of other customers complaining about the repeated misdeliveries and asking that Appellant be replaced. A letter from another customer received by the contracting officer on April 27 complained of almost daily misdeliveries continuing over the last 6 months, and asking the contracting officer to do something to correct the situation. (Tr. 86, 88-90; AF 47, 49, 51).

21. The contracting officer reviewed the irregularity reports of delivery deficiencies occurring after he issued his final warning to Appellant. There were 11 instances of customer-reported misdeliveries—one of the reported misdeliveries involved 10 pieces of mail—and 19 instances of other mishandling of mail, including putting deliverable or returnable mail in waste and putting deliverable mail with forwards. (Tr. 105; AF 62).

22. By final decision dated May 1, 2003, the contracting officer terminated the contract for default effective May 2, 2003. Before doing so, he reviewed the information from customers (Finding 20) and reported by the post office (Finding 21) and considered Appellant’s responses on the irregularity reports and in correspondence with the contracting officer and her allegations of sabotage. In the information he had available to him, he did not find evidence of interference by postal employees with Appellant’s performance of the route. (Tr. 94, 101-103, 105-108, 111; AF 50; Stip. 18; see Tr. 49).

23. The contracting officer suspended Appellant’s pay effective May 2 (AF 14). The contracting officer’s staff obtained from the postmaster the names of several possible replacements, including Appellant’s substitute on the route, and contacted them for interest and price. Thereafter, an emergency contract was awarded to Appellant’s substitute driver to perform the route at a price $2.23 per day higher than Appellant’s contract rate at termination. The substitute performed the route under the emergency contract from May to October 2003 by which time solicitation of a permanent replacement contract had been concluded and the permanent contract awarded. Respondent incurred reasonable administrative (staff) costs associated with the placement of the emergency contract and solicitation, evaluation and award of the permanent replacement contract. (Tr. 90, 102-103, 119-120; Respondent’s Exhibit 1).

24. By final decision dated May 29, 2003, the contracting officer assessed reprocurement costs against Appellant for 90 days of the emergency contract multiplied by the $2.23 daily rate difference (Finding 23) plus Respondent’s administrative costs. Respondent withheld the amount of reprocurement costs it claimed and released to Appellant the amount by which Appellant’s previously-suspended pay (Finding 23) exceeded Respondent’s reprocurement costs. (Tr. 90-93; AF 15, 52; Respondent’s Exhibit 1).

DECISION

Termination for Default

Respondent argues that the termination of Appellant’s contract was justified by the long history of performance deficiencies and Appellant’s failure to improve notwithstanding the many warnings by Respondent’s officials that unless performance was corrected she risked having the contract terminated. Respondent argues that it incurred damages because of Appellant’s default and that it is entitled to recover those reprocurement costs under the contract.

Appellant argues that she conscientiously performed her contractual duties and did her best to comply with the delivery requirements of the contract. She claims that she was treated disrespectfully by the Prather employees and that her recurring misdeliveries were due to their interference with her casing of the mail. Specifically, she alleges that the employees tampered with mail in her case while she was away, causing her to make mistakes in delivering the mail and requiring her to double-check all of the mail before she put it in a box on the route, which delayed her performance. She complains that she frequently brought her suspicions about the Prather employees to the attention of the contracting officer, but that he did nothing to investigate her claims.

Respondent has the burden of proving that the default termination was justified, Patricia J. Stevens, PSBCA No. 3272, 94-1 BCA ¶ 26,419, recon. denied, 94-2 BCA ¶ 26,951, and having considered all the evidence in the record of this appeal, we conclude that Respondent has met that burden. The evidence establishes that, from the beginning of the contract, Appellant's performance was unsatisfactory and remained unsatisfactory until the contract was terminated (Findings 5, 7, 8, 10, 13-18, 20, 21). Complaints from customers on Appellant’s route were received by the postmaster, the clerks and the contracting officer, including the submission of a petition signed by a number of customers, concerning Appellant's deficient performance.[2] Appellant responded to most of the irregularity reports regarding deliveries, explaining the possible reasons for the incidents but with few exceptions not denying that the misdeliveries and other events of mishandling of the mail occurred (Finding 17).

The OIC counseled Appellant concerning the deficiencies (Finding 7) as did the postmaster when he resumed management of the Prather Post Office (Findings 13, 14). The postmaster held a formal counseling session with Appellant in December 2002, but Appellant's performance did not improve then (Finding 14) or after receiving warnings, including a final warning, from the contracting officer (Findings 15, 18, 20, 21). Appellant’s continued misdeliveries and other mishandling of the mail breached her contract duties and justified the termination of her contract for default. See Arthur L. Johnson, PSBCA No. 3894, 97‑1 BCA ¶ 28,773; Richard Lewis Danel, PSBCA No. 3470, 94-2 BCA ¶ 26,687.

Respondent having demonstrated that Appellant failed to perform according to the terms of the contract, the burden shifts to Appellant to present evidence of excusable causes, Arthur L. Johnson, PSBCA No. 3894, 97-1 BCA ¶ 28,773; Pamela J. Sutton, PSBCA No. 1622, 88-3 BCA ¶ 21,031 at 106,237, or to show that the termination was an abuse of the contracting officer's discretion, Jesse A. Farmer, PSBCA No. 2702, 91-3 BCA ¶ 24,181 at 120,941; Quality Environment Systems, Inc., ASBCA No. 22178, 87-3 BCA ¶ 20,060 at 101,569.

Appellant argues that she did her best to perform the contract according to its terms, and the record reflects that she had regular contact with the contracting officer and his staff and sought their suggestions as to how she could improve her performance (Finding 19). On occasion she sought instruction from the postmaster.[3] Appellant eventually visited a neighboring post office to try to pick up tips from another mail delivery contractor (Finding 19). However, although these efforts support Appellant’s arguments that she tried in good faith to meet the requirements of the contract, they did not result in a satisfactory level of performance.

Appellant argues that her performance deficiencies were caused by the Prather Post Office employees mixing up mail in her case while she was away. According to Appellant, all of the employees were involved in this tampering (Finding 12), and this practice caused her to suffer a high rate of misdeliveries and required her to spend an inordinate amount of time on the route double-checking the mail for each address before placing it in a customer’s box.[4] She presented no direct evidence of such misconduct by Respondent’s employees, although she recounted seeing employees from time-to-time walking or running away from her case area and argued that tampering was the only possible explanation for her failure to improve her delivery accuracy. This is insufficient to demonstrate that Respondent’s employees tampered with her mail and interfered with her casing of the mail in the post office.

Finally, Appellant argues that the contracting officer abused his discretion by failing to send someone to the Prather Post Office to investigate her complaints of mistreatment by the employees there and her charge that they were tampering with her mail and causing the errors she made on the route. Before terminating the contract, the contracting officer considered the long history of Appellant’s delivery errors and mishandling of mail, considered the many warnings she had been given and the lack of improvement in performance and considered Appellant’s explanations of the causes of the delivery problems and her efforts to improve (Findings 21, 22). Appellant’s performance failures justified her termination, and she has not shown that there was evidence of excusability that the contracting officer could have discovered through an on-site investigation of the circumstances in Prather. Accordingly, Appellant has not shown that the contracting officer abused his discretion in terminating her contract without an on-site investigation of her allegations about tampering with her mail.

Reprocurement Costs

The record reflects that the services procured via the emergency contract were the same as those required by Appellant’s contract, that Respondent incurred the $2.23 per day increased cost for the period claimed and the administrative costs and that Respondent acted reasonably in soliciting and awarding the emergency contract (Findings 23, 24). These circumstances plus Respondent’s limit of the reprocurement costs to just 90 days of the remaining term of the contract constitute a prima facie showing of adequate mitigation of the reprocurement costs Respondent incurred. See Don Wasylk d/b/a Klysaw, PSBCA Nos. 4186, 4283, 00‑1 BCA ¶ 30,844; Hubbard Trucking, Inc., PSBCA No. 3701, 04-2 BCA ¶ 32,667; Jim Lovett, PSBCA Nos. 3633, 3634, 95-1 BCA ¶ 27,516. Appellant has not challenged Respondent’s mitigation of damages, its calculation of its claimed reprocurement costs, or the administrative costs charged to Appellant. Accordingly, Respondent has shown entitlement to recover its costs of reprocurement. See Hubbard Trucking, Inc., PSBCA No. 3701, 04-2 BCA ¶ 32,667.

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] The number of boxes on Appellant’s route increased over the term of her performance to 388 with a commensurate increase to her compensation calculated under a formula in the contract (Tr. 83-84; AF 4, 9, 10, 13).

[2] We are satisfied that at least the number of delivery errors reported by the customers on Appellant’s route actually occurred.

[3] Appellant and the postmaster were not on friendly terms. However, although his manner of expressing his dissatisfaction could have been more tactful, the postmaster did make repeated efforts for months to instruct Appellant on the delivery requirements of the contract and to correct her errors through informal and formal meetings, through his comments on the irregularity reports and otherwise. (Finding 11).

[4] Appellant has not explained why through her double-checking while out on the route she was not able to catch the miscased mail before delivery.