Appeal of

RICHARD JACKSON

Under Contract No. HCR 194L3

PSBCA No. 5183

APPEARANCE FOR APPELLANT:
John J. D'Angelo, Esq.

APPEARANCE FOR RESPONDENT:
Daniel J. Monahan, Esq.

OPINION OF THE BOARD

            Appellant, Richard Jackson, has appealed from a contracting officer’s decision terminating for default his contract with Respondent, United States Postal Service, for the transportation of mail on two routes originating at the Southeastern, Pennsylvania Processing and Distribution Center.  A hearing was held in Philadelphia, Pennsylvania.

FINDINGS OF FACT

            1.  On June 15, 2004, Appellant was awarded contract HCR 194L3, in the amount of $226,354.44 per annum, for mail transportation services for the term July 1, 2004 through June 30, 2008.  The contract contained two parts.  Part A required Appellant to provide service primarily between the Southeastern, Pennsylvania Processing and Distribution Center (P&DC) and Honey Brook, Pennsylvania, with intermediate stops.  With the exception of certain holidays, Part A generally required Appellant to operate 10 daily trips Monday through Friday, and 8 trips on Saturday.  Part B required Appellant to provide service primarily between the Southeastern P&DC and Cochranville, Pennsylvania, with intermediate stops.  Part B generally required Appellant to operate 8 trips on Monday, 6 daily trips Tuesday through Friday, and 4 trips on Saturday.  (Appeal File, Tab (AF) 9; Hearing Transcript, Page (Tr.) 11).

            2.  Appellant was required to supply a minimum of two vehicles to perform the contract.  In addition, Appellant was required to “have readily available” sufficient stand-by equipment to prevent delays in emergencies such as mechanical failures and poor weather conditions.  (AF 9, clause B.2).

            3.  Under the contract’s Termination for Default clause, Respondent “may terminate this contract … for default by the supplier [Appellant], or if the supplier fails to provide the Postal Service, upon request, with adequate assurances of future performance.”  The Events of Default clause provided for termination of the contract for default in the event of certain specified deficiencies in the contractor’s performance, including “the supplier’s failure to perform service according to the terms of the contract.”  (AF 9, clauses 2.3.1.m and 2.3.1.s(8) of the Highway Contract Route (HCR) Terms and Conditions, dated April 8, 2004; Stipulation, paragraph 2).

            4.  Appellant operated Part A of the contract (the “Honey Brook side”) himself, and hired drivers to drive the Part B trips (the “Cochranville side”).  Both parts contained a group of morning trips – including pre-dawn trips – and a group of afternoon and early evening trips.  (AF 9; Tr. 22, 116).  In preparation for operating the contract, Appellant practiced driving the route before July 1, 2004, but only during daylight hours.  (Tr. 108, 112, 132).

            5.  Service irregularities on highway contracts are reported on a PS Form 5500, Contract Route Irregularity Report.  Late operations of 15 minutes or less are reported for information only.  On July 1, 2004, the first day of contract operation, Appellant completed at least the first two morning trips on the Honey Brook side on time, although he found the route somewhat confusing in the dark, since he had only driven it in daylight before that.  In the afternoon, Respondent’s Network Specialist rode with Appellant for the purpose of demonstrating the use of a scanner which Appellant was to use to record when collection boxes were emptied.  The Specialist also gave Appellant road directions that Appellant found confusing.  He completed Trip 14, the last trip of the day on the Honey Brook side, 50 minutes late.  Because of that late arrival, Respondent suffered an “Express Mail failure” – i.e., the Express Mail on that trip missed its connection, creating the possible need to refund postage fees to customers.  In addition, Respondent’s employees who worked on the dock were required to stay on duty longer, inasmuch as Appellant’s truck arrived 45 minutes after the last scheduled truck arrival.  (Tr. 12, 15, 17-19, 113; AF 4, 8).^[1]

            6.  Respondent’s Administrative Official for Appellant’s contract, the person in charge of administering all highway contracts operating out of the P&DC, was concerned that Appellant did not know the routes between the post offices he was required to serve.  As a result, on July 2, 2004, he rode with Appellant in the morning, and drove another vehicle in the afternoon with Appellant following him to show him a route between the offices.  On that date, Appellant completed Trip 14 one hour and ten minutes late.  As with July 1, this late arrival again caused an Express Mail failure and additional time to be spent by Respondent’s dock employees.  (Tr. 20-21, 112; AF 4, 8).

            7.  On July 2, 2004, Appellant’s driver on the Cochranville side overslept and was 45 minutes late beginning Trip 17, scheduled to depart the P&DC at 4:50 a.m.  Inasmuch as the Trip 17 schedule required Appellant to reach the first post office stop 50 minutes after the scheduled departure and the second stop 65 minutes after the scheduled departure, it is likely that Appellant delivered the mail to those destinations late (see also Findings 10 and 12).  The general effect of late deliveries to post offices is to cause employees to have down time with no mail to sort and carriers to complete their deliveries later in the day.  (Tr. 10, 22, 129; AF 4, 8).

            8.  On July 3, 2004, Appellant was considerably late reporting to the Southeastern P&DC to begin Trip 1, scheduled to depart at 2:30 a.m.  Respondent’s personnel arranged to have the trip run by a “PVS” (Postal Vehicle Service) driver, thereby incurring an additional expense.  The PVS driver arrived at the P&DC at 3:00 a.m.  Shortly thereafter, after the PVS truck had been loaded, Appellant also arrived at the P&DC.  At the Administrative Official’s direction, Appellant rode with the PVS driver to help Appellant become more knowledgeable regarding the route.  The trip was delayed in leaving the P&DC by one hour.  (AF 4, 8; Tr. 24, 25, 139, 152).

            9.  On July 7, 2004, Appellant was 25 minutes late completing Trip 14.  On that date, he also failed to scan the collection boxes at two of the stops.  At one of those stops he had great difficulty locking the collection box after emptying it, and this contributed to his delay.  (AF 4, 8; Tr. 26-27).

            10.  On July 8, 2004, Appellant’s driver on the Cochranville side overslept and was 40 minutes late beginning Trip 17 (AF 4, 8).

            11.  On July 8, 2004, the Administrative Official held a formal counseling session with Appellant.  At that session, the parties discussed the deficiencies in performance that had been recorded on the “5500s” and discussed the need to improve service.  The Administrative Official stressed the need to operate on time and the seriousness of Express Mail failures.  In addition, Appellant was advised to ask for late slips if he was delayed at a post office due to the fault of the Postal Service, and was reminded that some scanning was not being performed properly.  (AF 7; Tr. 27).

            12.  On July 9, 2004, Appellant’s driver on the Cochranville side overslept and was 40 minutes late beginning Trip 17 (AF 4, 8).

            13.  On July 10, 2004, Appellant failed to scan collection boxes at five post offices.  Appellant stated that the scanner did not work, but a Postal Service clerk was able to take the same scanner and scan the same boxes.  (AF 4, 8; Tr. 29).

            14.  On July 10, 2004, Appellant’s driver on the Cochranville side called Appellant at the last moment and advised him that he would be unable to drive the route.  Appellant was unable to get a substitute and, as a result, failed to provide service on Trip 17.  (AF 4, 8).

            15.  One of Appellant’s responsibilities was to pick up empty mail transporting equipment from the Glenmoore post office and return it to the P&DC.  Appellant had been instructed multiple times by the Administrative Official to pick up the equipment on a particular morning trip.  This was necessary to clear space on the Glenmoore dock so mail could move in and out during the day.  Notwithstanding those instructions, Appellant’s practice, instead, was to pick up the equipment at the end of the day.  On July 12, 2004, the Glenmoore postmaster issued a Form 5500 reflecting Appellant’s failure to pick up the equipment as directed.  (AF 4, 8; Tr. 31-32).

            16.  On July 12, 2004, Appellant’s new driver on the Cochranville side omitted service on Trip 15, scheduled to leave the P&DC at 2:15 a.m.  Trip 15 was a trip run only on Mondays, and Appellant failed to ensure that the driver was aware of the schedule.  (AF 4, 8; Tr. 30).

            17.  After consulting with a senior contract specialist in the contracting officer’s office, the Administrative Official sent Appellant a letter, dated July 13, 2004, noting that service had not improved since the formal conference on July 8 (Finding 11).  The Administrative Official asked Appellant to take steps to restore and maintain satisfactory service within 3 days of receipt of the letter, warning that otherwise Appellant’s entire file would be referred to the contracting officer for “appropriate action.”  (AF 6; Tr. 74).

            18.  On July 15, 2004, Appellant’s driver on the Cochranville side departed the P&DC 40 minutes late on Trip 19, scheduled to leave at 1:00 p.m.  (AF 4, 8; Tr. 38).

            19.  Also, on July 15, 2004, Appellant’s truck on the Honey Brook side broke down when a wheel came off during the last morning trip (Trip 6 – due to arrive at the P&DC at 9:10 a.m.).  Appellant was unable to rent an acceptable replacement truck in time to run the first two afternoon trips (Trips 11 and 12).  As a result, mail that was to be processed at the P&DC missed a connecting truck and was delayed.  (AF 4, 8; Tr. 37-38, 124).

            20.  On July 16, 2004, Appellant did not have a replacement truck available in time for the early morning trips on the Honey Brook side.  He omitted service on Trips 1, 2, 3, and 4.  On that date he also was an hour and five minutes late completing Trip 14 – resulting in another Express Mail failure.  (AF 4, 8; Tr. 43).

            21.  Also on July 16, 2004, Appellant’s driver was unable to find the keys to the truck used on the Cochranville side and omitted service on the first two morning trips – Trips 17 and 18 – which trips were then run by the Postal Vehicle Service.  (AF 4, 8; Tr. 43).

            22.  On July 16, 2004, the contracting officer, having been advised of Appellant’s failure to provide a replacement truck and of the lost keys, suspended Appellant’s performance of the contract and issued him a “Show Cause Notice,” giving him seven days in which to respond and explain why the contract should not be terminated for default.  By letter dated July 21, 2004, Appellant responded to the show-cause notice and provided explanations and/or comments on all of the deficiencies covered by the Forms 5500 issued to him.  Appellant’s letter was received in the contracting officer’s office on July 22, 2004.  In a final decision dated July 30, 2004, the contracting officer terminated the contract for default.  Appellant filed a timely appeal.  (AF 2-5; Stipulation, paragraph 6).

            23.  On each day that Appellant operated the contract, he was delayed by 15 or 20 minutes at the Honey Brook post office because Respondent’s personnel did not have the mail ready on time for the beginning of Trip 12.  Appellant was scheduled to arrive at Honey Brook at 2:35 p.m. at the conclusion of Trip 11 and was scheduled to depart Honey Brook at 2:45 p.m. to begin Trip 12.  However, he was prevented from leaving Honey Brook until 3:00 or 3:05 p.m. each day.  This delay prevented Appellant from reaching Downingtown, the terminus of Trip 12, on time.  Trips 13 and 14 were scheduled to follow immediately after Trip 12, and it is likely that those trips were also affected by the delay at Honey Brook.  (Tr. 114-115, 146-147; AF 9).

DECISION

            Respondent argues that the deficiencies in Appellant’s performance under the contract justified the contracting officer’s decision to terminate the contract.  Respondent emphasizes the numerous incidents of late and omitted performance, which impacted Respondent’s operations by causing it to waste work hours while its employees waited for the mail to be delivered, and caused it to fail in its commitments with regard to Express Mail.  In addition, Respondent emphasizes the additional expense incurred by Respondent when it was required to use the Postal Vehicle Service to perform Appellant’s duties and to have Postal Service employees scan collection boxes not scanned by Appellant.

            Appellant’s position, as expressed in his Complaint,^[2] is that the service deficiencies reflected in the Forms 5500 were due to circumstances beyond his control, and that he was not given the opportunity to remedy the problems.  He also argues that the delays at the Honey Brook facility caused him to be late at the other stops on his route – and should not be charged against him.

            It is Respondent's burden to prove that the termination was justified by Appellant's failure to perform in accordance with the contract, Charli Selsa Schiver d/b/a NGX-Schiver, PSBCA No. 4545, 02-2 BCA ¶ 31,937.  Once Respondent demonstrates that Appellant failed to perform according to the terms of the contract, the burden shifts to Appellant to present evidence of excusable causes, Charli Selsa Schiver, supra; Patricia J. Stevens, PSBCA No. 3272, 94-1 BCA ¶ 26,419 at 131,429, recon. denied, 94-2 BCA ¶ 26,951, 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.

            Notwithstanding that Appellant had two weeks between contract award and the beginning of contract performance to prepare, the repeated instances of late departures by Appellant’s hired driver on the Cochranville side and multiple instances of late completion of trips on the Honey Brook side, beginning with the first day, raised legitimate concerns among Respondent’s personnel that Appellant was not sufficiently prepared to perform the contract in a reliable manner.  Those concerns were specifically brought to Appellant’s attention at the counseling session held on July 8, 2004.

            Thereafter, Appellant’s performance continued to suffer from late operations, missed collection box scans, and, for the first time, omitted service.  The repeated instances of late performance and Appellant’s failure to provide service for multiple trips on July 10, 12, 15 and 16, all caused disruptions in Respondent’s mail processing activities and caused Respondent to incur additional expense.

            In addition, that Appellant was unable to promptly replace the truck which broke down on July 15, and was unable to provide service for two trips on the afternoon of July 15 and for four trips on the morning of July 16, demonstrates that he did not have “readily available” sufficient stand-by equipment, as was required by the contract (Finding 2).

            We have found, as contended by Appellant, that he was regularly delayed at the Honey Brook post office at the beginning of Trip 12 (Finding 23).  However, with one exception (July 7), the amount of time by which Appellant was late on the next return trip, Trip 14, far exceeded the delay caused by Respondent on Trip 12.  Therefore, with that one exception, the Trip 14 delays are not excused by the delays at Honey Brook.

            Based on this record, we conclude that the effect of the performance irregularities under this contract, both before and after the counseling session on July 8, was to deprive Respondent of the reliable, regular service it was entitled to under the contract, and justified the termination for default.  See John Michael Hall, PSBCA No. 1311, 1985 PSBCA LEXIS 68, May 15, 1985; F.W.H. Motor Transit, Inc., PSBCA No. 1317, 1985 PSBCA LEXIS 60, July 30, 1985, recon. denied, 1985 PSBCA LEXIS 47, November 22, 1985.  Appellant has not shown that these performance deficiencies were excusable, 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, recon. denied, 94-2 BCA ¶ 26,951.

            Accordingly, the appeal is denied.

David I. Brochstein
Administrative Judge
Vice Chairman

I concur:                                                                 I concur:
______________________                                   ___________________
William A. Campbell                                                Norman D. Menegat
Administrative Judge                                             Administrative Judge
Chairman                                                               Board Member

[1]  Appellant stipulated that the Forms 5500 in the record (AF 8) accurately recorded when trips were late or omitted.  Appellant has questioned only whether these performance irregularities should be charged against him.  (Tr. 144).

[2]  Appellant did not file a brief, and counsel offered neither an opening statement nor a closing argument at the hearing.