January 12, 2007
Appeals of
DERRICK VAN GREENE
PSBCA No. 5093 and PSBCA No. 5215
Under Contract Nos. HCR 76030
and HCR 76042
APPERANCE FOR APPELLANT:
Derrick Van Greene
APPEARANCE FOR RESPONDENT:
Kimberly C. Blanton, Esq.
OPINION OF THE BOARD
Appellant, Derrick Van Greene, held at least three mail transportation contracts with Respondent, United States Postal Service. Respondent terminated two of the contracts for default, and Appellant filed these appeals.
A
hearing was held in
FINDINGS OF FACT
1. On
2. The term of renewed contract HCR 76042 was
from
3. On
4. The term of renewed contract HCR 76030 was
from
5. Both contracts required that Appellant “carry all mail tendered for transportation under this contract . . . in accordance with the operating schedule and between the points fixed in the schedule” (5093AF 1 and 5215AF 1, Contract Clause B.3.a).
6. The contract schedules established the time each trip was required to leave or return to the Fort Worth P&DC as well as the time each was to arrive at and leave the other post offices on the route (5093AF 1 and 5215AF 1, Contract Clause B.1.4, Work Requirements, subsections a and g).
7. Appellant’s contracts required that he comply with all federal, state and local laws and regulations and that he obtain and pay for all permits required to perform the contracts (5093AF 1 and 5215AF 1 (Contract Clause B.6, SAFETY REQUIREMENTS), 2 (Contract Clauses H.12, PERMITS AND RESPONSIBILITIES (SERVICES) (Clause B-30) (January 1997), and H.19, LAWS AND REGULATIONS APPLICABLE (Clause B-80) (January 1997))).
8. The contracts’ Termination for Default provisions were identical and authorized Respondent to terminate the contracts for default if Appellant failed to “[c]omplete the requirements of this contract within the time specified in the contract.” Included among the specific events identified as defaults was Appellant’s “[f]ailure to follow the instructions of the contracting officer.” (5093AF 2 and 5215AF 2, Contract Clauses H.4, TERMINATION FOR DEFAULT (Clause B-13) (January 1997) (Modified), subsection a.(1)(a), and H.5, EVENTS OF DEFAULT (Clause B-69) (January 1997)).
9. The Termination for Default clauses provided
that if after Respondent terminated the contract for default it was determined
that Appellant was not in default, “the rights and obligations of the parties
will be the same as if the termination had been issued for convenience.” (
10. The contracts’ Termination for Convenience clauses provided that in the event of a termination for convenience, Appellant, as his sole relief, would be entitled to be paid as liquidated damages the sum set forth in the contracts’ Changes clauses (5093AF 2 and 5215AF 2, Contract Clauses H.3, TERMINATION FOR CONVENIENCE (TRANSPORTATION) (Clause B-71) (January 1997), and H.8, CHANGES (TRANSPORTATION) (Clause B-67) (January 1997), subsection e.(2)).
11. Throughout the duration of both contracts, Respondent
issued and mailed to
12. The post offices served by the two contract
routes were reasonably close to one another.
In fact, there was some overlap of the lines of travel, and both routes
served the Burleson Post Office. Four different
trips, Trips 3 and 5 on HCR 76030 and Trips 5 and 7 on HCR 76042, were
scheduled to depart the Fort Worth P&DC on weekdays at
13. In August and early September 2002, on a number of occasions Appellant combined mail for two scheduled trips on a single truck. Doing this resulted in some mail being delivered to the post offices late or picked up and returned to the Fort Worth P&DC late. Three of the incidents of combined mail occurred when mechanical problems prevented use of one of Appellant’s trucks. Respondent wanted Appellant to use a separate truck for each trip listed in the schedule and issued Appellant Forms 5500 reflecting its dissatisfaction with his practice of combining mail from separate trips. (5093AF 6, 9, 10; Stip. I-2, I‑3).[1]
14. On September 11, 2002, the Administrative Official (the Network Specialist at the Fort Worth P&DC), who was responsible for the day-to-day administration of Appellant’s contracts (5093AF 2 and 5215AF 2, Contract Clause G.1, DEFINITIONS (Clause B-1) (January 1997) (Modified); Tr. 249), met with Appellant and advised Appellant that he was concerned about the number of irregularity reports reflecting equipment breakdowns on both routes and also about Appellant combining mail for two trips on one truck. Appellant responded that he saw nothing wrong with combining the mail, especially on holidays, so long as he delivered the mail to the post offices and they did not complain. The Administrative Official directed Appellant to run the routes as stated in the contract schedules using one truck for each trip. (5093AF 10, 12; 5215AF 3, 5; Stip. I-6, III-3; Tr. 27-32, 50-54, 179-181).
15. Although officials at the post offices on Appellant’s routes did not issue Appellant Forms 5500 regarding his late arrivals, their managers often called the Administrative Official and his manager at the Fort Worth P&DC complaining when their mail was delivered later than scheduled. The post offices process the incoming mail long before they open to the public, and the managers schedule their own employees to work the mail according to its scheduled arrival. When Appellant delivered the mail to the post offices later than scheduled or returned to the Fort Worth P&DC with mail from the post offices later than scheduled, mail processing was delayed and Respondent’s ability to meet its service standards was jeopardized. In discussions with Appellant, the Administrative Official explained these consequences and emphasized the need for Appellant to comply exactly with the schedules in the contracts. (Tr. 40-41, 53-54, 56, 66, 126-127, 129, 158, 168-169).
16. On
17. On
18. On November 11, 2002, a holiday, Appellant
combined mail from the two routes on one truck, although he did make deliveries
to all post offices on both routes (5215AF 7, 8; Appellant’s Exhibit Packet C,
pages (“App. Exh.”) C 88-89). Respondent deducted from Appellant’s pay the
cost of running one truck for route HCR 76042.
In the contracting officer’s
19. On January 20, 2003, a holiday, Appellant combined mail for Trips 3 and 4 on HCR 76030 on his other trucks and did not supply a separate truck to provide service for those trips (5093AF 16).
20. On
21. On March 10, 2003, Appellant’s driver arrived at the Fort Worth P&DC late for loading causing a 35-minute delay in the departure of HCR 76030 Trip 1 from the Fort Worth P&DC (5093AF 21).
22. On
23. On
24. By letter to Appellant dated
25. On
26. On
27. On
28. By letter to Appellant dated
29. On September 17, 18, and 23, Appellant omitted one HCR 76030 trip each day and combined the mail on his other trucks (5093AF 34, 39; 5215AF 21).
30. On
31. Believing that he could not have the vehicles inspected in time for the morning trips scheduled for September 24 and intending not to perform them, on September 23 Appellant had his driver turn in the HCR 76030 scanning wand, a hand-held device used by the drivers to register each time a collection box was emptied, to the Fort Worth P&DC. However, Appellant did not call Respondent or otherwise explain why he was turning in the scanner, and without explanation or advance notice to Respondent, Appellant failed to show up for all four early morning HCR 76030 trips on September 24. Respondent’s officials called Appellant at least twice that morning, leaving messages on his answering machine, but Appellant did not return their calls. Respondent provided the service using its own trucks. (Tr. 305-306; 5093AF 39; App. Exh. C 80-83).
32. By final decision dated September 24, 2003, the contracting officer terminated HCR 76030 for default, citing what he believed to be Appellant’s abandonment of the route as the grounds (5093AF 36; App. Stip. 12; Stip. I-40; Tr. 190, 230-231).
33. Appellant’s appeal of the termination (5093AF 39) was docketed as PSBCA No. 5093.
34. On September 24, 2003, the driver for Trip 1 of HCR 76042 overslept, and the trip (scheduled to leave at 1:50 a.m.) departed the Fort Worth P&DC 35 minutes late (5215AF 21).
35. On
36. On
37. Trip 6, as listed in contract HCR 76042, was to
be run daily except for Sundays and certain holidays and required Appellant to
pick up mail from a collection box in front of the Joshua Post Office in
addition to picking up the post office’s outbound mail from the post office. The schedule for Trip 6 allowed five minutes
for performing both tasks, with the driver scheduled to arrive at Joshua at
38. From the beginning of the contract, Appellant
had not picked up mail from the Joshua collection box on Trip 6. A dispute arose between him and the Joshua
Postmaster in January 2004, and he was issued Forms 5500 on January 20, 23, and
39. On
40. Appellant did not pick up the mail from the Joshua collection box the afternoon of March 3 and was 20 minutes late returning to the Fort Worth P&DC. Respondent issued Appellant two 5500s, one for not clearing the collection box and one for completing the trip late. (5215AF 31, 34).
41. On
42. On
43. On
44. On
45. Based on the survey of the route (Finding 42)
and a review of the operational requirements of the affected post offices, the
46. On
47. On
3/3 Failed to empty collection box at Joshua on Trip 6 (5215AF 34 (p. 1))
3/3 Trip 6 completed 20 minutes late, arrived
at
3/3 Trip
8 arrived at
3/12 Trip 10 arrived at
3/15 Trip 6 completed 50 minutes late (5215AF 34 (p. 5))
3/17 Truck on Trip 8 broke down and did not finish trip (5215AF 34 (p. 6); App. Exh. E 103)
3/17 Trip 10 was completed 1 hour 15 minutes late after detour to retrieve mail from broken down truck on Trip 8 (5215AF 34 (p. 6))
3/18 Appellant failed to perform Trips 1 and 2 (5215AF 34 (p. 10))
3/18 Appellant omitted Trip 5, and Respondent engaged an emergency contractor to perform the trip (5215AF 34 (pp. 7-9))
3/30 Trip 6 completed 1 hour late
3/30 Trip 8 completed 50 minutes late (5215AF 34 (p. 11))
4/3 Driver overslept. Trip 1 departure delayed by 30 minutes (5215AF 38 (p. 1))
4/30 Trip 8 completed 30 minutes late (5215AF 38 (p. 3))
4/30 No show for Trip 7. Respondent obtained emergency service (5215AF 38 (pp. 4-7))
4/30 Combined Priority and Express extra runs
5/1 Appellant sent his scanner in with another driver (5215AF 39 (p. 1))
(Stip. III-33; Tr. 123-125; 5215AF 40).
48. By letter dated
49. On
50. The May 12 and 27 deficiencies (Finding 49)
were brought to the attention of the contracting officer (Tr. 129, 135; 5215AF
44), and, by final decision dated
51. Respondent had established internal procedures for addressing performance deficiencies under highway contracts. These procedures were set out in a one-page document from Respondent’s Supply Management Office and in a section of Respondent’s Handbook PO-513. Neither document was expressly incorporated into Appellant’s contracts. The procedures provided for informal consultation between the contract’s administrative official and the contractor to obtain improvement followed by a formal conference if performance did not improve. If performance still did not improve, the administrative official was to send the contractor a formal Final Request for Service Improvement. If this did not produce satisfactory performance, the matter was to be referred to the contracting officer for action. The procedures contemplated that the contracting officer would give a final warning and then terminate the contract if the final warning did not produce satisfactory performance. The written procedures included sample letters to be used in this process. A number of the sample letters were identified by the word “mandatory” in their caption. (Tr. 21-22, 43-45, 103-104, 155, 177-179, 208, 228, 249-250; App. Exh. C 67-77).
52. Both contracts required Appellant to buy fuel from a supplier authorized by Respondent. Appellant was to obtain a fuel funding card from the supplier “and be responsible for making payments to the card provider.” (Tr. 234, 238; 5093AF 1 (p. 10) and 5215AF 1 (p. 25), Amendment 3, Fuel Cost Management).
53. On a number of occasions under both of the
contracts, Appellant failed to make the required payments to the supplier. Respondent effected payment on Appellant’s
behalf by withholding the amount of Appellant’s fuel charges from amounts he
earned under the contracts and would have otherwise been paid plus, on some
occasions, a “bookkeeping” fee to cover Respondent’s costs of doing so. The last deduction for unpaid fuel
obligations occurred on
DECISION
Appellant challenges the contracting
officer’s default terminations of two mail transportation contracts. Respondent contends both terminations were proper.
A default termination is a drastic sanction that should be sustained
only when based on reasonable grounds and solid evidence, and it is
Respondent’s burden to demonstrate by a preponderance of the evidence that the
default termination[s] of Appellant's contract[s] [were] justified.
Charles West, PSBCA
No. 3655, 96‑1 BCA ¶ 28,211, citing Lisbon Contractors, Inc. v.
PSBCA
No. 5093, Contract HCR 76030
Respondent argues that the termination of HCR 76030 was justified by Appellant’s unsatisfactory performance and his refusal to follow instructions of the Fort Worth P&DC transportation officials and the contracting officer that he perform each trip under his contract with a separate truck.
Appellant argues that he was performing the service required by the contracts in the best interests of the Postal Service. Appellant believed he was meeting his obligations under the contracts as long as he got the mail to the post offices and left no mail behind. He argues that his efforts to ensure delivery of the mail by combining trips despite problems with his vehicles excuse any technical failures to comply exactly with the contract schedule. Appellant also argues that the termination should be set aside for Respondent’s failure to follow its own pre-termination procedures.
When Appellant combined mail for separately scheduled trips on one truck, he did not meet the schedules set forth in the contracts, and the resulting late deliveries and late returns to the Fort Worth P&DC adversely affected Respondent’s operations (Findings 12, 13, 15). That Appellant was able to deliver the mail before the post offices opened in the morning and that he did not leave mail behind do not excuse his failure to deliver and pick up mail according to the contract schedules. Respondent is entitled to strict performance of its contract requirements. See Charles E. Blanton, PSBCA No. 1381, 86-1 BCA ¶ 18,723 at 94,187, citing Maxwell Dynamometer Co. v. United States, 181 Ct. Cl. 607, 628, 386 F.2d 855, 868 (1951).
Additionally, there were instances where
Appellant failed to perform the contract service at all, most notably on
Notwithstanding Respondent’s repeated instruction that he stop combining mail for separate trips, Appellant continued to do so (Findings 13, 14, 16-20, 22-25, 27, 28). Immediately after receiving the contracting officer’s final warning Appellant omitted trips by combining mail (Findings 28, 29). This history of refusing to follow Respondent’s instructions regarding combining mail, the omitted trips of June 15 and 23 (Finding 23), followed by Appellant’s failure to perform four trips the morning of September 24, 2003, without notice to Respondent or explanation (Finding 31), justified the termination of HCR 76030. See Irving Stumer, PSBCA No. 1256, 1985 PSBCA LEXIS 82, February 6, 1985, reaffirmed on recon., 1985 PSBCA LEXIS 74, April 8, 1985. Appellant has not shown that these performance deficiencies were excusable, see Pamela J. Sutton, PSBCA No. 1622, 88-3 BCA ¶ 21,031 at 106,237, or that the termination was an abuse of the contracting officer's discretion, see Jesse A. Farmer, PSBCA No. 2702, 91-3 BCA ¶ 24,181 at 120,941; Patricia J. Stevens, PSBCA No. 3272, 94-1 BCA ¶ 26,419.
That the contracting officer gave abandonment of the contract as the grounds for termination in his final decision is of no moment. As Appellant did not give notice or explanation for turning in his scanner and omitting the morning trips on September 24, the contracting officer’s conclusion that Appellant had abandoned the route was reasonable. Moreover, Appellant’s refusal to follow Respondent’s directions and his performance deficiencies justified the termination of HCR 76030, even if the contracting officer did not directly rely on them in terminating the contract. See Kelso v. Kirk Brothers Mechanical Contractors, Inc., 16 F.3d 1173, 1175 (Fed. Cir. 1994); Arthur Napier, PSBCA Nos. 3044, 3140, 94-2 BCA ¶ 26,695.
Notwithstanding the performance deficiencies, Appellant contends that the termination of HCR 76030 should be set aside because Respondent failed to follow its own instructions for progressive discipline preceding termination of a mail transportation contractor for poor performance (Finding 51). However, the Supply Management procedures and the Postal Service Handbook setting forth steps to be followed before a contract is terminated are instructions to Postal Service officials. The guidelines have not been shown to be for the benefit of contractors and thus confer no procedural rights upon Appellant. See Shorthaul Trucking Co., PSBCA No. 1046, 1985 PSBCA LEXIS 64, June 18, 1985; Bowman’s Transport Co., PSBCA Nos. 1088, 1089 and 1092, 84-1 BCA ¶ 17,217; B & E Mail Transport, Inc., PSBCA No. 947, 82-2 BCA ¶ 15,912 at 78,870.
Additionally, any variances from the procedures did not prejudice Appellant. He had ample warning of what Respondent expected in the way of contract performance—that he run all trips on separate trucks without combining mail and that he meet the schedules exactly as set forth in the contracts. He had been advised of the consequences should he fail to comply with those requirements, and he had ample opportunity to correct his performance. See B & E Mail Transport, Inc., PSBCA No. 947, 82-2 BCA ¶ 15,912 at 78,870.
In its brief, Respondent addressed the
assessment of reprocurement costs.
However, there has been no appeal of such an assessment, and,
accordingly, we have no jurisdiction to address reprocurement costs. See 41 U.S.C. §605(a); Sharman Co.
v.
PSBCA
No. 5215, Contract HCR 76042
Respondent argues that Appellant’s performance under HCR 76042 failed to meet the requirements of the contract and justified the termination. Appellant argues that the termination of HCR 76042 was not justified because much of what Respondent based the termination on—late performance on Trip 6 and Appellant’s refusal to clear the collection box at the Joshua Post Office—resulted from a faulty schedule for the route. According to Appellant, Respondent acknowledged the schedule provided inadequate time for performance of some of the trips by proposing the service change.
The record reflects a number of instances of
Appellant’s failure to comply with the requirements of contract HCR 76042 as
written. Those from March 3, 2004, and
later were identified in the Administrative Official’s May 6, 2004 referral to
the contracting officer (Finding 47), and the irregularities listed in
that referral prompted the contracting officer’s further action (Findings 48, 50). On its face, the list appears to include
contract irregularities sufficient in number and gravity to warrant termination,
but a closer examination of the irregularities reveals that many of them should
not have been considered by Respondent as grounds for termination of the
contract.
The parties recognized that the contract
schedule as written did not include sufficient time for performance of Trip 6 (Findings
42, 45). After Appellant began picking up the mail
from the Joshua collection box on Trip 6, as he was instructed to do, that trip
and the following Trips 11/8 were late almost every day (Finding 41). However, as the parties had never established
an adjusted schedule that Appellant could be expected to perform, Appellant’s
late performance on Trips 6 and the following Trips 11/8 would not be grounds
for terminating the contract. See
H.L. Clemons Trucking, PSBCA No. 569, 1980 PSBCA LEXIS 31, February 29,
1980; William Roach, PSBCA No. 3335, 97-1 BCA ¶ 28,735. Moreover, the Transportation Contract
Specialist had instructed Appellant to clear the Joshua collection box on Trip
6 and specifically assured Appellant that he would not be written up for being
late (Finding 41), yet Respondent’s officials at the Fort Worth P&DC continued
to issue 5500s regarding Trip 6.
Additionally, two
of the listed late finishes of Trips 8 and 10 were for a 15-minute late return,
even though the Form 5500 identifies lateness of 15 minutes or less as being
“for information only” (Findings 11, 47).
These should not have been listed as chargeable irregularities
supporting the termination of Appellant’s contract. See Lorah’s Hauling, PSBCA No. 4778, 04-1 BCA ¶ 32,502, n. 3; Steinmann
Transportation, Inc., PSBCA No. 3302, 94-3 BCA ¶ 27,212.
Finally, Respondent claims Appellant’s practice of combining mail and his refusal to empty the Joshua collection box on Trip 6 justified the termination. However, for the most part Appellant’s practice of combining mail on HCR 76042 had ended with the termination of HCR 76030 in September of 2003, seven months earlier. The only instance of combining mail included in the Administrative Official’s referral to the contracting officer involved combining mail from an extra Priority Mail trip under this contract with an Express Mail run under a separate contract (Finding 47). In any event, combining mail was not shown to be a problem during the months leading up to the termination. Likewise, while Appellant’s refusal to pick up the mail from the Joshua collection box had been a violation of the requirements of the contract that might have justified termination in early March 2004, that issue had been resolved by the Transportation Contract Specialist’s telephone call of March 4 and Appellant’s uniform compliance with the contract requirement thereafter (Finding 41).
Appellant’s
performance was not perfect. The omitted trips of March 17-18 and
Alternatively, Respondent
argues that Appellant’s failure to pay his invoices under the Fuel Program
(Findings 52, 53) was a breach that independently justified the termination. However, Respondent was able to collect payment for the fuel invoices from
Appellant’s pay, and there was no showing that Appellant’s failure to
pay such invoices had any effect on
his performance of the contract services or that because of its frequency or
otherwise it was unduly disruptive of Respondent’s administration of the
contract. Moreover, the last
incident of unpaid fuel invoices occurred seven months before the termination
(Finding 53) and was never raised thereafter by Respondent as a ground for
termination. Under these circumstances,
Appellant’s failure to pay fuel invoices seven months earlier did not justify
the
Conclusion
The appeal of PSBCA No. 5093 is denied. The appeal of PSBCA No. 5215 is granted. The default termination of HCR 76042 is
converted to one for the convenience of the Postal Service (Finding 9), and
Appellant is entitled to the liquidated damages provided by the contract’s
Changes clause (Finding 10), plus Contract Disputes Act interest.
Norman D. Menegat
Administrative
Judge
Board Member
I concur: I
concur:
William A. Campbell David
Administrative Judge Administrative
Judge
Chairman Vice
Chairman
[1] Throughout this Opinion, reference to a trip being
omitted and the mail combined means that the trip listed in the schedule was
not run with a separate truck and the mail to be delivered or picked up on that
trip was carried on one or more of Appellant’s trucks running other trips under
these contracts.