October 31, 2007

PSBCA No. 5404

Appeal of

CEPHRUS DEVORE

Under Contract No. 475630-01-P-0670

APPEARANCE FOR APPELLANT:

Berta E. Nichols, Esq.

APPEARANCE FOR RESPONDENT:

William J. Trumpbour, Esq.

Office of the General Counsel

United States Postal Service

OPINION OF THE BOARD

Appellant, Cephrus Devore, has filed a timely appeal from a contracting officer’s final decision denying his claim arising from the termination of his cleaning services contract. A hearing in this matter was held in Ridgeland, South Carolina. Appellant elected application of the Board's Small Claims (Expedited) procedure, 39 C.F.R. §955.13. Both entitlement and quantum are at issue.

FINDINGS OF FACT

1. On August 27, 2001, Respondent, United States Postal Service, and Appellant entered into contract No. 475630-01-P-0670 requiring Appellant to provide cleaning services at the Ridgeland, South Carolina Post Office for the period September 8, 2001, through September 5, 2003. As a result of bilateral modifications in 2003 and 2005, the contract period was extended to September 24, 2007, and the annual contract amount was increased to $23,750. (Appeal File, Tab (AF) 1).

2. The contract required Appellant to perform various types of cleaning services, Monday through Saturday, each week (AF 1, pp. 15-23).

3. The Ridgeland Postmaster (postmaster) was designated as the Contracting Officer’s Representative (COR) (Transcript of Hearing, Pages (Tr.) 58, 60) and, as such, was responsible for the day-to-day administration of the contract (AF 1, p. 6).

4. As part of its terms and conditions, the contract contained a Failure to Perform Work clause, which provided that for each day Appellant failed to perform the required cleaning services, his contract payment would be reduced by 1/312 of the annual amount. Based on the annual rate at the time the contract was terminated, this would result in a deduction of $76.12 for each day of work missed. The clause also provided that “[c]ontinued failure to perform may be cause for termination of the contract.” (AF 1, p. 4).

5. The contract also included a Termination on Notice clause that included authority for Respondent to terminate the contract on one day's written notice if in the contracting officer’s judgment Respondent's best interest required such action. It also provided that either party could terminate the contract upon 30 days' written notice with no liability except payment for actual services rendered. (AF 1, p. 6).

6. Under the contract's Supplier Screening Requirements clause, any employees or subcontractors used by Appellant who required access to the Ridgeland Post Office for a period in excess of two weeks were required to undergo screening and be approved by either the contracting officer or the COR before being allowed access to the post office. It was Appellant's responsibility to obtain the necessary clearance. (AF 1, p. 8; Tr. 42; Respondent’s Exhibit 1, p. 3).

7. The solicitation for the contract contained attachment 4, entitled, “Performance and Evaluation Factors” (PEF form) on which Appellant listed the names and cleaning qualifications of two substitutes who could perform the work in Appellant’s absence (AF 1, p. 25). Although not communicated to Appellant, the contracting officer’s practice at the time of award was to permit those individuals listed on the PEF form as substitutes. To add additional names to the approved list of substitutes after contract award, the contracting officer’s practice required suppliers to complete another copy of the PEF form. (Tr. 37-38).

8. For two days in 2002, Appellant was accompanied while he performed by Mr. R. Davis, who he wished to have work as his substitute. Mr. Davis was not one of the two substitutes previously listed by Appellant on the PEF form. Appellant introduced Mr. Davis to the postmaster and advised that he was to be Appellant's substitute in the event Appellant was unavailable to perform his duties under the contract. (Tr. 55, 80). Based on Mr. Davis being allowed to accompany him on those two days and his conversation with the postmaster, Appellant believed that the postmaster had approved Mr. Davis as a substitute (Tr. 55, 58, 80). Appellant never completed the forms required to obtain clearance for Mr. Davis (Tr. 56-58) nor did he submit for the contracting officer’s approval an updated copy of the PEF form listing Mr. Davis as a substitute (Tr. 38).

9. On one occasion between 2002 and 2004, Mr. Davis substituted for Appellant during a two to three day period when Appellant was out of town (Tr. 64, 65; Joint Notice Report Tab 8, 1(c)).

10. On September 14, 2006, Appellant was incarcerated in the Jasper County detention facility in South Carolina (Supplemental Appeal File, Tabs 2, 4, 5). Appellant remained incarcerated until on or about October 27, 2006 (Stipulation (Stip.) 11; Tr. 47, 49). During his incarceration, Appellant did not communicate with any Postal Service representative regarding his incarceration or his unavailability to perform cleaning services pursuant to the contract. He did, however, contact Mr. Davis and request that he provide cleaning services. (Tr. 47).

11. On Friday, September 15, 2006, Mr. Davis arrived at the Ridgeland Post Office and performed cleaning services on behalf of Appellant (Tr. 23, 86). The postmaster was on vacation at the time Mr. Davis performed these cleaning services (Tr. 81). Although the contract required Appellant to perform cleaning services on Saturdays, Mr. Davis did not report to the Ridgeland Post Office on Saturday, September 16, 2006 (Tr. 83).

12. On Saturday, September 16, 2006, the postmaster was contacted at home and advised that Appellant had been incarcerated on September 14, 2006. After arriving at the post office on Monday, September 18, 2006, the postmaster telephoned the detention center and learned the nature of the charges against Appellant (Tr. 11-13). She subsequently called the contracting officer and advised him of the circumstances of Appellant’s incarceration and asked that the contract be terminated (Tr. 13). At the conclusion of the telephone conversation, the postmaster understood that the contracting officer intended to terminate the contract immediately (AF 6; Tr. 14, 18). While the contracting officer intended to terminate the contract on one day's notice at the conclusion of the telephone conversation, he neglected to do so (Tr. 33).

13. On Monday, September 18, 2006, Mr. Davis returned to the Ridgeland Post Office to perform cleaning services on behalf of Appellant, but before he began performance the postmaster told him that the contract with Appellant had been terminated and his services were not required (Tr. 83).

14. Appellant was released from the Jasper County detention center on or about Friday, October 27, 2006. On or about Monday, October 30, 2006, Appellant presented himself at the Ridgeland Post Office to resume performance under the contract. The postmaster advised him shortly after he arrived and before he performed any cleaning services that his contract had been terminated. (Tr. 16, 49-51, 67, 68).

15. On October 31, 2006, Appellant telephoned the contracting officer to ask about the status of his contract. He advised the contracting officer that the postmaster had prevented both him and his substitute from performing cleaning services at the post office and had told him the contract was terminated. The contracting officer stated that he wasn’t familiar with the status of the contract, but that Appellant should have his substitute report for work at the Ridgeland Post Office while he looked into it. (Tr. 68).

16. On November 1, 2006, the postmaster faxed a letter to the contracting officer again requesting that the contract with Appellant be terminated (AF 6; Tr. 14, 34).

17. On November 2, 2006, in response to the postmaster’s faxed request, the contracting officer issued a letter, dated September 13, 2006, to Appellant purporting to terminate his contract effective September 14, 2006, one day after the date of the letter. Appellant received the termination letter from the contracting officer on November 4, 2006. (AF 7; Stip. 13).

18. By letter dated December 4, 2006, Appellant, through his attorney, disputed the validity of the termination and asserted a claim for $23,750, plus consequential damages (AF 5).

19. By final decision dated December 29, 2006, the contracting officer denied Appellant's claim in its entirety (AF 4). By letter to the contracting officer dated February 26, 2007, Appellant filed a timely appeal (AF 5).

20. In his post-hearing brief, Appellant reduced the amount of his claim to $5,480, which is the amount Appellant alleged he was entitled to for the period from September 15, 2006 (the day after his incarceration) through December 4, 2006 (the day Appellant claims the termination became effective).

DECISION

Appellant argues that he is entitled to additional payment because Respondent breached the contract by preventing his substitute from performing cleaning services during the period Appellant was unavailable. Appellant also argues that the contracting officer’s notice of termination did not become effective until thirty days after Appellant received the notice on November 4, 2006, thereby entitling Appellant to payment of breach damages for those thirty days as well. In total, Appellant argues that he should be compensated for the period beginning September 15, 2006, through December 4, 2006.

Respondent argues that it did not breach the contract by refusing access to Appellant’s substitute because Appellant had neither sought nor received clearance for his substitute to enter the Ridgeland Post Office pursuant to the requirements set out in the Supplier Screening Requirements clause. Respondent further argues that its retroactive termination of the contract was effective September 14, 2006, one day after the contracting officer intended to send the letter terminating the contract and that termination was supported both by Appellant’s failure to perform cleaning services after September 15, 2006, and because of the nature of the criminal offense with which he was charged.

Finally, Respondent argues if the Board decides Appellant is entitled to any additional compensation resulting from a breach, then any amount otherwise due for the days on which services were not actually provided should be reduced by the amount of wages that should have been paid to his substitute in accordance with a wage determination issued pursuant to the Service Contract Act, 41 U.S.C. §§351–358, in order to prevent a windfall.

We agree that Respondent’s refusal to permit Appellant’s substitute to perform was proper. While Appellant’s substitute was denied access to the Ridgeland Post Office by the COR because she erroneously thought the contract had been terminated, his being denied access was nonetheless appropriate because Appellant failed to secure proper clearance for his substitute as required by the contract. The fact that the COR may have been aware that Appellant desired to have Mr. Davis as his substitute does not amount to waiver of the requirement to obtain clearance. See CIMPI Transportation Corporation, PSBCA No. 1203, 1985 PSBCA LEXIS 80, February 21, 1985. Nor is there a waiver of the clearance requirement resulting from the fact Mr. Davis actually performed cleaning services as a substitute for two to three days in 2002 and on September 15, 2006. There is no evidence in the record that either the contracting officer or the COR had any knowledge of two instances of the substitute’s performance. Any other employees who may have observed Mr. Davis on those occasions had no authority to waive the contract requirements. See Robert E. Davis, PSBCA No. 3400, 94-3 BCA ¶27,164.

With his substitute properly denied access, Appellant’s unavailability to perform the contract requirements is unexcused and supports the termination on one day’s notice. That the contracting officer's termination letter did not cite Appellant's failure to perform as the reason for the termination is of no consequence. A termination on one day’s notice can be justified by the circumstances at the time of termination. Appellant’s continued failure to perform (Finding 4) is such a circumstance. See Kelso v. Kirk Brothers Mechanical Contractors, Inc., 16 F.3d 1173 (Fed. Cir. 1994); Derrick Van Greene, PSBCA Nos. 5093, 5215, 07-2 BCA ¶33,471; Tom Kime, PSBCA No. 3480, 95-1 BCA ¶27,490; Arthur Napier, PSBCA Nos. 3044, 3140, 94-2 BCA ¶26,695.

The termination of Appellant’s contract, however, is not retroactive to September 14, 2006. Respondent argues that the termination should be retroactive because the contracting officer intended to terminate the contract as of that date, but neglected to do so. The termination on notice clause requires that a contractor actually be notified in writing of the termination prior to the effective date of the termination. Hector Rivera Ruiz, PSBCA No. 1756, 88-3 BCA ¶20,829. In this instance, Appellant was not so notified. We agree, however, that the contract can properly be terminated on one day’s notice from November 4, 2006, the date Appellant actually received the letter of termination. Failure to perform services between September 15 and November 4, 2007, is ample justification to terminate Appellant’s contract on one day’s notice. Tom Kime, PSBCA No. 3480, 95-1 BCA ¶27,490. As such, we need not consider Respondent’s argument that criminal charges against Appellant support the termination.

This leaves as the remaining issues whether Appellant is entitled to receive any additional compensation and, if so, how much. We find that Respondent breached the contract by preventing Appellant from performing services required under the contract from October 30, 2006, the day he reported to work after having been incarcerated, to November 5, 2006, the effective date of the termination. Accordingly, Appellant is entitled to compensation for those days, excluding Sunday, November 5, 2006, as the contract did not require service on that day (Finding 2). Appellant is entitled to recover the value of the cleaning services he would have earned but for Respondent’s breach. On Time Postal Services, Inc., PSBCA No. 2528, 90-2 BCA ¶22,698; Hector Rivera Ruiz, PSBCA No. 1756, 88-3 BCA ¶20,829. Appellant is also entitled to compensation for September 15, 2006, the date his proposed substitute performed cleaning services at the post office (Finding 9).

Under the contract, the daily value of performance is established at $76.12 for the purpose of deducting compensation from Appellant in the event he failed to perform service (Finding 4). We find the daily value calculation is also suitable for establishing the value to be applied to the seven days for which Appellant is entitled to receive compensation. Accordingly, Appellant is entitled to receive $532.84. Respondent argues that any compensation for the period after September 14, 2006, in which services were not actually provided should be offset by the amount Appellant would have had to pay any substitutes working on his behalf. With respect to the period from October 30 to November 5, 2006, Appellant would not have needed substitute workers as he was available to perform contract services himself. With respect to September 15, 2006, no such offset is appropriate since services were actually provided by Appellant’s substitute. Accordingly, the Board will not reduce the amount to which Appellant is entitled.

CONCLUSION

Respondent did not breach the contract by preventing Appellant’s proposed substitute from performing, and the contract was properly terminated on one day’s notice effective November 5, 2006. Appellant is entitled to receive $532.84, plus interest under the Contract Disputes Act, as compensation for the seven days during which either contract performance occurred or Appellant was available to provide services under the contract, but was prevented from doing so.

William A. Campbell

Administrative Judge

Chairman