March 21, 2005

Appeals of

 

BENJAMIN MULLINS

Under Contract No. HCR 20777

PSBCA Nos. 5136 and 5173

 

APPEARANCE FOR APPELLANT:

Benjamin Mullins

 

APPEARANCE FOR RESPONDENT:

William B. Neel, Esq.

OPINION OF THE BOARD

            Appellant, Benjamin Mullins, appealed the termination of his mail delivery contract by Respondent, United States Postal Service, and Respondent’s claim against him for the costs of obtaining service on the route after the termination.

            A hearing was held, and the parties filed post-hearing briefs.  Entitlement and quantum are at issue (December 2, 2004 Order and Memorandum of Telephone Conference).

 

FINDINGS OF FACT

PSBCA No. 5136, Termination for Default

 

            1.  On July 10, 2001, Respondent renewed Appellant’s contract number HCR 20777 for the delivery of mail to customers’ boxes along a route originating in the Fulton, Maryland Post Office.  The contract term was from July 1, 2001, through June 30, 2005, at an annual rate of $36,768.26.  (Appeal File, Tab (“AF”) 1).

            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.”  (AF 1, Contract Sections H.4, TERMINATION FOR DEFAULT (Clause B-13) (January 1997) (Modified) subsections a (1) (a) and (b) and H.5, EVENTS OF DEFAULT (Clause B-69) (January 1997) subsection a).

            3.  The contract’s Claims and Disputes clause required that Appellant “proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under the contract, and comply with any decision of the contracting officer.”  (AF 1, Contract Section H.2, CLAIMS AND DISPUTES (Clause B-9) (January 1997) subsection j).

            4.  The contract required that all drivers on the route be screened and issued an identification badge by Respondent (AF 1, Contract Section B.5, SCREENING/IDENTIFICATION REQUIREMENTS), and that Appellant “deny access to the mail to any employees or personnel when required to do so by the contracting officer” (AF 1, Contract Section B.3, GENERAL REQUIREMENTS AND PROHIBITIONS, subsection h).

            5.  Under the contract, the Officer-in-Charge (“OIC”) of the Fulton Post Office was the administrative official designated to supervise and administer the contract (Tr. 40; AF 1, Contract Paragraph 6, Contract Sections B.1.4.a and G.1, DEFINITIONS (Clause B‑1) (January 1997) (Modified)).

            6.  During Thanksgiving week 2003, the OIC attempted to perform a survey of Appellant’s route (Tr. 42, 53-54; AF 4, p. 2).  Disagreements between her and Appellant arose over the conduct of the survey, the number of deliveries on the route, inspections of Appellant’s vehicle and her request that Appellant provide evidence of insurance on his vehicle (Tr. 43, 56).  Their arguments on these issues were loud and acrimonious (Tr. 43, 57, 60).  There had been other similar loud encounters between the two over the preceding few months relating to Appellant’s performance under the contract, and the bitter arguments led the OIC to fear that Appellant might harm her (Tr. 43, 45, 48).  In an October 2003 encounter, the OIC had called police to remove Appellant from the post office because of his screaming and what she considered to be threatening behavior (Tr. 44, 45, 51-52).

            7.  On November 26, 2003, the contracting officer received a telephone call from a person identifying himself as the one other highway contractor working out of the Fulton Post Office (Tr. 47, 108, 112, 125).  He reported that he had seen an altercation at the Fulton Post Office between Appellant and a postal employee that day and that Appellant’s behavior was explosive and out of control.  He said he feared for the safety of the people at the Fulton Post Office.[1]  (Tr. 109, 110, 116; AF 10).

            8.  After receiving the call from the highway contractor, the contracting officer called the OIC (Tr. 109).  The OIC told the contracting officer that the postal employee had reported to her that Appellant had angrily confronted him at the Fulton Post Office and yelled at him (Tr. 41, 61, 109).  She also reported Appellant’s hostile and threatening behavior toward her and advised the contracting officer that she feared for her safety if Appellant were allowed to continue in the post office (Tr. 48, 62, 110, 120).  The contracting officer asked the OIC to fax a written report, which she did later in the day.  The faxed report recounted the altercations relating to the route inspection as well as the encounter between Appellant and the postal employee.  The OIC repeated in the fax that she was afraid of Appellant.  (Tr. 111, 122; AF 6, 10).

            9.  Based on the information she had received, the contracting officer decided to deny Appellant access to the Fulton Post Office and to the mail, which would prevent him from personally operating the route (Tr. 110).  Her purpose was to protect the safety of post office employees until the matter could be further investigated (Tr. 111; AF 10).

            10.  By letter and telephone call to Appellant on November 26, 2003, the contracting officer denied Appellant access to the mail and to the Fulton Post Office due to what she characterized as his disruptive behavior at the post office (Tr. 110-111, 118, 123; AF 10).  She told him that denying him access did not relieve him of his obligation to provide the service required by the contract and that his substitutes were still allowed to operate the route (Tr. 111).  By copy of her letter, she instructed the Fulton OIC to retrieve Appellant’s identification badge and “other postal property” in Appellant’s possession.  The contracting officer concluded her letter by offering Appellant the opportunity to appeal his denial of access to “the next higher level of contracting authority” by furnishing written notice, including reasons for opposing the denial of access, to the contracting officer within five days of receipt of her letter.  (Tr. 113, 213; AF 7).

            11.  After Appellant was denied access to the post office, his route was performed satisfactorily by his wife and by his hired substitute carrier, both of whom were experienced on the route (Tr. 49, 114-115, 144).

            12.  By letter dated November 28, 2003, to the contracting officer, Appellant appealed the denial of access, explaining his version of the events of November 25 and 26 and contending that it was the OIC, not he, who had disrupted the Fulton Post Office.  He asserted that the OIC had harassed him, that he had caused no confrontations or disruptions at the post office and that the two postal clerks in the office could verify his version of the events.  (AF 9).

            13.  On December 3, 2003, the contracting officer’s supervisor sent Appellant’s appeal letter, along with the contracting officer’s written report of the events leading up to the denial of access, to the Manager, Surface Transportation, at Postal Service Headquarters (Tr. 19, 119, 138; AF 10).  That Manager is the next higher level of contracting authority referred to in the contracting officer’s November 26, 2003 letter (Tr. 15, 114).

            14.  On December 5, 2003, Appellant called the Manager, Surface Transportation, to discuss the status of his appeal (Tr. 16).  The Manager told him he had not yet seen the appeal (Tr. 17).  Appellant told the Manager that unless the appeal were decided in his favor that day, he would no longer provide service on the route through his substitute drivers (Tr. 17, 19).  The Manager advised that there would be no decision that day but that the appeal would be addressed in due course[2] (Tr. 17, 18).  He reminded Appellant that he remained obligated to provide the service under the contract through a substitute or employee even though Appellant personally was denied access to the post office (Tr. 17, 21, 34, 35).  Appellant told him he would not provide service on the route after close of business December 5 (Tr. 17; AF 17).

            15.  The Manager, Surface Transportation, immediately informed the contracting officer that Appellant had said he would no longer provide service on the route.  The Manager suggested that the contracting officer take whatever actions were necessary to cover the route.  (Tr. 20, 139).

            16.  Also on December 5, Appellant had his hired driver pick up all personal items Appellant had theretofore kept at the Fulton Post Office, and Appellant did not send anyone to provide service after that date (AF 11).

            17.  By letter dated December 8, 2003, the contracting officer, after confirming that Appellant had not provided service on December 6 or 8, 2003, and had sent someone to the Fulton Post Office to retrieve his personal items, terminated Appellant’s contract effective close of business December 5, 2003 (Tr. 142-143; AF 12).  The contracting officer suspended payment of $817.38 otherwise due Appellant for service provided before the termination (Appellant’s Supplemental Appeal File, Page 39).[3]

            18.  Appellant filed a timely appeal of the termination, and that appeal was docketed as PSBCA No. 5136.

PSBCA No. 5173, Reprocurement Costs

            19.  Beginning on December 6, 2003, and thereafter, Respondent accomplished performance of Appellant’s route through an emergency contract.  To establish the emergency contract, the contracting officer’s staff called at least five potential contractors, described the route and sought bids (Tr. 144, 146).  One bid was received (Tr. 145).  The contracting officer compared the offered emergency contract rate with other similar routes in the area, determined that the rate offered was reasonable and awarded the emergency contract at an annual rate of $48,600, which exceeded Appellant’s contract rate by $16.0617 per day (Tr. 145).

            20.  Consistent with Respondent’s guidelines for calculating excess costs of reprocurement, the contracting officer determined to assess against Appellant reprocurement costs of $16.0617 per day for a period of 105 days, which equated to the number of days left in the then-current 28-day postal accounting period plus three accounting periods, for a total of $1,686.48 (Tr. 147-149).  To that the contracting officer added the wages for a secretary in his office spending one hour preparing and distributing documents related to the reprocurement and 6 hours of wages for the transportation specialist to evaluate and make award, for total administrative costs of $167.27 (Tr. 149).  The total reprocurement costs were $1,853.75.  (AF 16).

            21.  By final decision dated June 3, 2004, the contracting officer demanded that Appellant pay $1,853.75 (AF 15).

            22.  Appellant appealed that final decision, and the appeal was docketed as PSBCA No. 5173.

DECISION

PSBCA No. 5136, Termination for Default

            It is Respondent’s burden to prove that the termination was justified by Appellant’s failure to perform in accordance with the contract, Linda Copman, PSBCA Nos. 4889, 4903, 03-2 BCA ¶ 32,342; Charli Selsa Schiver, PSBCA No. 4545, 02-2 BCA ¶ 31,937, and it has done so.  Appellant’s unequivocal statement to the Manager, Surface Transportation, that he would not perform the contract after December 5, 2003 (Findings 15, 16); his arrangement to have his personal items picked up from the post office (Finding 17); and his failure to perform the contract after December 5, 2003 (Finding 17) were ample grounds for the contracting officer to conclude that Appellant had failed to perform the requirements of the contract (Finding 2) and did not intend to resume performance.  These grounds justified the contracting officer’s termination of the contract on December 8, 2003 (Finding 18).  See Linda Copman, PSBCA Nos. 4889, 4903, 03-2 BCA ¶ 32,342; Sharon Rhoades, PSBCA No. 3455, 94-2 BCA ¶ 26,950.

            Accordingly, the burden has shifted to Appellant to present evidence of excusable causes for his failure to perform, 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, Patricia J. Stevens, PSBCA No. 3272, 94-1 BCA ¶ 26,419, recon. denied, 94-2 BCA ¶ 26,951.

            Appellant argues that the November 26 action of the contracting officer barring him from the post office made it impossible for him to perform the requirements of the contract and thus justified his refusal to perform after December 5, 2003.  He asserts that the contracting officer’s instruction in her letter that the OIC retrieve Appellant’s identification badge and “other postal property” in Appellant’s possession (Finding 10) required him to turn in his substitutes’ identification badges which would prevent their access to the mail.  However, it had been made plain to him by the contracting officer and by the Manager, Surface Transportation, that the substitutes retained access to the mail and would be permitted and expected to perform the contract (Findings 10, 14), and there is no evidence that Appellant returned their badges before he ceased performance.

            He also contends that denying him access to the post office precluded him from supervising his substitutes and ensuring that the contract work was being performed correctly.  The substitutes were experienced on the route, and they performed the duties under the contract satisfactorily from the time Appellant was barred from the post office until he decided to cease performance (Finding 11).  Appellant has not shown that denial of his access prevented contract performance.

            Appellant challenges the decision denying him access to the post office by contending that it was based on false information and was therefore improper.  He claims that the OIC was abrupt and discourteous to customers, postal employees and to him and that it was she who was disruptive and confrontational.  According to Appellant, his performance was always satisfactory, and the hearing testimony of two clerks in the office supported him on this point.  However, regardless of the merits of the denial of access, the contract required that Appellant “proceed diligently with performance of this contract . . .  and comply with any decision of the contracting officer” (Finding 3).  As discussed above, the contracting officer’s order did not prevent Appellant from performing the contract, and he had no right to cease performance and no right to demand an immediate ruling on his appeal to the Manager, Surface Transportation, as a condition to continuing to perform service under the contract.[4]  The contracting officer’s action did not justify Appellant’s refusal to perform the contract after December 5, 2003, and that refusal warranted termination of his contract for default.

PSBCA No. 5173, Reprocurement Costs

The contract authorized Respondent to “acquire similar supplies or services” after a default termination and provided that Appellant “will be liable to the Postal Service for any excess costs.”  (Finding 2).  The record reflects that the services procured via the emergency contract were the same as those required by Appellant’s contract, that Respondent incurred administrative costs associated with the reprocurement as well as $16.0617 per day of excess costs and that Respondent acted reasonably in soliciting and awarding the emergency contract (Findings 19, 20).  These circumstances plus Respondent’s limit of the reprocurement costs to just 105 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.  Thus, Respondent has shown entitlement to recover its excess costs of reprocurement in the amount of $1,853.75 (Findings 20-22).  See Hubbard Trucking, Inc., PSBCA No. 3701, 04-2 BCA ¶ 32,667; Michael N. Beckloff, PSBCA No. 2249, 89-3 BCA ¶ 22,118; Birken Mfg. Co., ASBCA No. 32590, 90-2 BCA ¶ 22,845 at 114,718.

Accordingly, Respondent may retain the $817.38 it withheld from Appellant’s final contract payment (Finding 17), and may recover the remainder of its reprocurement costs, $1,036.37, from Appellant.

The appeals are 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 contracting officer’s testimony of the content of the telephone conversation was admitted over Appellant’s hearsay objection to show the information available to the contracting officer and not as proof that the altercation happened as described by the caller (Tr. 108-109).

[2]  Resolution of such appeals generally takes from two to four weeks, but could have taken longer in Appellant’s case due to the press of Christmas mail transportation requirements (Tr. 18, 140).

[3] Appellant’s appeal of the denial of his access to the mail was never decided.  By letter dated March 4, 2004, the Manager, Surface Transportation, advised Appellant that because the contract had been terminated for default, he did not intend to act on the appeal (Respondent’s Exhibit 1).

[4] Appellant complains that Respondent failed to decide his appeal at all, but, as pointed out by the Manager, Surface Transportation, in his letter to Appellant (Finding 18, n. 3), once Appellant abandoned performance and the contract was terminated, there remained no practical reason for addressing the appeal of the denial of access to the post office.