Appeal of

HAKALA TRANSPORT, INC.

Under Contract Nos. HCR 04234-35, 042A3-5,7 and 045BO
PSBCA No. 5298

APPEARANCE FOR APPELLANT:
Paula L. Hakala

APPEARANCE FOR RESPONDENT:
Melissa Mortimer, Esq.

OPINION OF THE BOARD ON MOTION TO DISMISS

            Appellant, Hakala Transport, Inc., has appealed from a contracting officer’s final decision regarding the procedures for the delivery of Registered Mail under Appellant’s highway route contracts^[1] with Respondent, United States Postal Service.  Respondent has filed a motion to dismiss this appeal for lack of jurisdiction.

FINDINGS OF FACT

            For the purposes of this motion, we make the following findings of fact:

            1.  During the time relevant to these appeals, Appellant was the contractor on six highway route contracts, requiring the transportation of mail between various points within the state of Maine.  Each contract was for a term of four years and was either renewed or entered into effective July 1, 2004.  (Appeal File Tabs (AF) 1-6).

            2.  Each of Appellant’s contracts required the transportation of “all classes of mail,” including Registered Mail, between two terminal post offices with intermediate stops at additional post offices to drop off and/or pick up mail (AF 1-6).  In addition, Appellant could be assigned “lobby/vestibule keys” as accountable items.  At certain times, particularly during early morning trips, no Postal Service personnel would be present to receive the mail when Appellant’s drivers arrived.  (AF 1-6 (clauses B.1.4.h and i), 11).

            3.  Under the contracts’ Claims and Disputes clause, a claim is defined as “…  a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract….”  (AF 7, HCR Terms and Conditions, clause 2.3.1.s(1) (incorporating by reference Clause B-9, “Claims and Disputes (January 1997)”)).

            4.  The contracts required Appellant to comply with “all applicable Federal, State, and local laws, executive orders, rules and regulations applicable to its performance” under its contracts (AF 7, HCR Terms and Conditions, clause 2.3.1.q, “Other Compliance Requirements”).

            5.  In September 2004, Respondent issued a revision to Postal Service Handbook DM-901, covering the requirements for handling Registered Mail.  Among the topics covered was “Transfer of Accountability” of Registered Mail.  (AF 12).

            6.  As a result of the revised Handbook, by memorandum dated March 22, 2005, the contracting officer provided all highway transportation contractors with directions for implementing what he described as new procedures for handling Registered Mail.  The new procedures provided a detailed, “hand-to-hand” exchange process to be used by contractors in verifying and signing for Registered Mail picked up from the initial postal facility and destined for delivery to post offices on the contractor’s route.  With regard to delivery of Registered Mail, the procedures generally required a similar “hand-to-hand” exchange at attended post offices.  If, however, the contractor was to deliver Registered Mail to a post office prior to the arrival of postal personnel, the contractor or its driver was required to leave the Registered Mail in a designated location, generally a locked vestibule, where it would be received and signed for by postal personnel when they arrived. The postal personnel would check the mail against the Registry Manifest Bill, PS Form 3854, used to track the Registered Mail, and leave a signed copy “in a designated folder or location for pick up by [Appellant’s] driver on his/her next arrival at that office.”  Thus, for delivery to unattended post offices, there was no hand-to-hand exchange of the Registered Mail.  (AF 8, 10).

            7.  On August 3, 2005, Appellant, through its president, wrote the contracting officer to express its concerns about leaving Registered Mail at unattended post offices in accordance with the March 22, 2005 memorandum.  Appellant expressed its belief that the practice violated the principle behind Registered Mail and left Appellant and its drivers open to potential liability if mail were stolen before being received by later-arriving postal employees.  Appellant also expressed its dissatisfaction with how the process added to the time required to operate its contracts by requiring its drivers to wait to sign for Registered Mail before leaving for morning trips, having to find the proper personnel at the various post offices to sign the required paperwork, and creating additional work for Appellant in tracking the new paperwork.  Appellant offered suggestions for procedural changes to resolve its concerns.  However, Appellant neither questioned its obligation under the contract to abide by the new procedures, nor demanded any payment for the additional time allegedly required to do so.  (AF 11).

            8.  By letter dated August 24, 2005, the Contracting Officer issued a final decision advising Appellant that, while Respondent appreciated Appellant’s concerns regarding leaving Registered Mail at unstaffed post offices, Appellant must continue to deliver the mail as directed.  In response to Appellant’s concerns regarding the additional time the procedures required, the contracting officer advised Appellant to work with the Administrative Official for its contracts to determine whether additional time was required.  If so, the contracting officer advised that adjustments could be made to the contracts.  (AF 12).

            9.  On August 25, 2005, the Manager, Transportation and Networks for the Northeast area, issued a memorandum to all highway contractors reminding them that they must follow the procedures in the March 22, 2005 memorandum for Registered Mail and that the Postal Service believed it was proper and safe to leave Registered Mail in locked vestibules at unattended post offices (AF 13).

            10.  By letter dated September 19, 2005, Appellant filed a timely appeal of the contracting officer’s final decision, which appeal was docketed as PSBCA No. 5298.  Appellant’s appeal letter reiterated its concerns about leaving Registered Mail at unstaffed post offices and about the increased time required to comply with the new procedures.  (AF 14).

            11.  In its Complaint, Appellant listed five “grievances,” four of which recited Appellant’s concerns regarding deficiencies in the handling of Registered Mail and the treatment of its drivers (as contrasted with the treatment of Postal Service employees).  In the other grievance, Appellant alleged that the new procedures, initiated after its contracts were awarded, were increasing the amount of time necessary to operate its contracts and, as a consequence, the amount of time for which Appellant was required to pay its drivers.  The only relief demanded in the Complaint, however, was that “the regulation in Handbook DM-901 … Delivering Registered Mail Involving Vestibule Exchange (AM Dispatch) must be modified.”  (Complaint).

DECISION

            In its motion, Respondent makes two basic arguments.  First, Respondent argues that, other than a claim for unspecified monetary damages (which we address below), Appellant seeks only to have the Board direct that the procedures for the delivery of Registered Mail to unattended post offices be modified.  Respondent argues that the Board lacks the authority to order this relief.

            Respondent’s second argument is that to the extent Appellant’s demand for relief may be viewed as a claim for compensation for the additional time expended by its drivers, its claim also may not be adjudicated by the Board since it did not seek the payment of a “sum certain” and because it was not first submitted to the contracting officer for a decision, as required by the Contract Disputes Act.

            In response, Appellant argues that the regulations regarding the delivery of Registered Mail to an unattended post office are inconsistent, ambiguous and arbitrary, and that they unfairly subject Appellant and its drivers to possible liability for lost Registered Mail.  In addition, Appellant discusses a hypothetical method of calculating the amount of extra time expended by its drivers and argues that it should be compensated for that time.

            Having considered the record and the parties’ arguments, we agree with Respondent that this appeal must be dismissed for lack of jurisdiction.

            Under the Contract Disputes Act of 1978, this Board has the authority to decide appeals from final decisions of contracting officers on claims by a contractor.  Under these contracts, a “claim” includes an assertion “seeking, as a matter of right, the payment of money in a sum certain, … the interpretation of contract terms, or other relief arising under or relating to” the contract.  With regard to the portion of Appellant’s August 3, 2005 letter (Finding 7) urging that the Registered Mail procedures be modified, while this Board has the authority to issue a “declaration of rights” under a contract, even in the absence of a monetary claim, e.g. Alliant Techsystems, Inc. v. United States, 178 F.3d 1260, 1270 (Fed. Cir. 1999), Appellant’s demand is not a proper subject for such a “declaration.”  Appellant has not sought an “interpretation or adjustment” of contract terms.  Indeed, it does not question its obligation to comply with the terms of the contracts, including the Registered Mail procedures, and has not argued that the terms of the contracts or the Registered Mail procedures are unclear or in need of interpretation.  Except as Appellant may seek payment for extra time spent by its drivers, as discussed below, Appellant has not sought “other relief arising under or relating to” its contracts.  See Sermor, Inc., ASBCA Nos. 46956, et al., 95-2 BCA ¶ 27,748 at 138,348-350.  Under these facts, Appellant’s demand that the Registered Mail procedures be changed did not constitute a “claim,” as that term is defined in the contracts, over which we have jurisdiction.

            The Board also is without jurisdiction to consider Appellant’s demand for compensation based on increased costs of performance.  There is no evidence that Appellant ever submitted to the contracting officer a demand for payment, in a sum certain, arising out of the alleged increase in its costs.  Absent such a submission to the contracting officer, the Board lacks jurisdiction to consider Appellant’s request for monetary relief.  See 41 U.S.C. § 605(a); Paragon Energy Corp. v. United States, 645 F.2d 966, 971 (Ct. Cl. 1981); Linda Copman, PSBCA Nos. 4889, 4903, 03-2 BCA ¶ 32,342.

            Accordingly, Respondent’s motion to dismiss is granted, and the appeal is dismissed for lack of jurisdiction.  This dismissal is without prejudice to Appellant’s right to submit a proper claim to the contracting officer for a decision under the Contract Disputes Act.

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]  Of the six contracts involved in this appeal, one was awarded to Hakala Transport, Inc., whose president was Paula Hakala; one was awarded to Paula Hakala; and four were awarded to Paula Hakala dba Hakala Transport.  For ease of reference, we refer only to Hakala Transport, Inc., as the Appellant.