PSBCA No. 5304
January 26, 2010
LARRY A. STILES
Under Contract No. HCR 25181
PSBCA No. 5304
APPEARANCE FOR APPELLANT
Larry A. Stiles
APPEARANCE FOR RESPONDENT
Melissa Mortimer, Esq.
OPINION OF THE BOARD[1]
Appellant, Larry A. Stiles, has appealed the decision of the contracting officer terminating for default his contract with Respondent, United States Postal Service, for the delivery of mail along a route originating at Racine, West Virginia. A hearing was held in Charleston, West Virginia. Only the propriety of the default termination is before the Board in this proceeding.
FINDINGS OF FACT
1. On June 16, 2005, Respondent accepted Appellant’s May 4, 2005 offer and awarded him contract HCR 25181 (the contract) for the delivery of mail to boxes along a route that began and ended at the Racine, West Virginia Post Office, and included stops at the Peytona, Foster, and Danville, West Virginia post offices. The contract was for the period beginning July 1, 2005, and ending June 30, 2009, and required service every day except Sundays and holidays. The Administrative Official (AO) for the contract was the Danville Postmaster. (Appeal File, Tab (AF) 1; Stipulation, paragraph (Stip.) 1, 5).
2. Under the contract, Appellant was required to “case” mail - i.e., sort mail into a case - at the Racine Post Office and then deliver that mail to 46 customer boxes along a specified route, ending at the Peytona Post Office. He then was to repeat that process at Peytona (144 boxes, ending at the Foster Post Office), at Foster (275 boxes, ending at the Danville Post Office), and at Danville (55 boxes, ending back at the Racine Post Office, with brief stops at Foster and Peytona on the way back to Racine). (AF 1, pp. 5-7).
3. The schedule contained in the contract provided that Appellant would arrive at Racine to case and load at 8:10 a.m. and would leave Racine at 9:00 a.m. Appellant was required to arrive at Peytona at 9:15 a.m. and depart at 10:15 a.m. He was required to arrive at Foster at 11:20 a.m. and depart at 1:15 p.m. Arrival at Danville was scheduled for 3:10 p.m. and departure was scheduled for 3:30 p.m. On his way back to Racine from Danville, Appellant was scheduled to stop at Foster at 4:40 p.m. and at Peytona at 4:55 p.m. before arriving at Racine at 5:00 p.m. Based on this schedule, the contract contained an estimate of 2,940 hours per annum as the time required to operate the route, including “casing, loading/unloading and mail mark-up.” The solicitation/contract advised that prior to submitting a proposal, the supplier “must determine the actual hours.” (AF 1, pp. 5-6).
4. Contract clause B.1.4, “Work Requirements,” provided, in part:
a. Before submitting a proposal, information concerning the casing and delivery of mail should be obtained from the Administrative Official at Danville, WV.
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c. The supplier will be required to load, transport, and unload all classes of mail at the headout, en route, and destinating offices.
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f. The supplier will be required to perform box delivery services to the customers and all other related services as outlined in Section B.3, General Requirements and Prohibitions - Box Delivery, or as directed by the contracting officer or authorized representative. (AF 1, pp. 7-8).
5. Contract clause B.3.j, “General Requirements and Prohibitions - Box Delivery,” provided, in part:
If Section B or another part of this contract calls for “box delivery” or similar services, the supplier shall, when so directed by the contracting officer, perform any or all of the following:
(1) the supplier may be required to provide the following services under this contract:
(a) Deposit all mail matter received for that purpose from a post office into the appropriate customer mail boxes … placed along the line of the route. In the event that (i) mail cannot be contained in the customer boxes … the supplier shall deliver the affected mail as provided in the applicable Postal Service regulations.
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(c) Deliver all mail received or collected along the route to the next post office or to such other point or person on the route as the contracting officer or authorized representative may direct.
(2) The supplier also may be required to … (ii) prepare and maintain a list of names of the customers served, arranged in alphabetical order … ; (iii) accept mail addressed to customers on the route and arrange it in order of delivery …; and (iv) mark up and forward mail for customers of the route who have filed a change of address order, and make appropriate entry in the list of names of the customers served.
(3) In addition to delivery and collection of all classes of mail (First Class, Priority, Periodicals, Standard, Express, etc.), the supplier may be required to:
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(d) Provide delivery for the special services associated with all classes of mail, which include but may not be limited to: registered, certified, insured, and COD as well as delivery of parcels and those services associated with Express Mail.
(4) Normally the supplier will not be required to dismount from a vehicle to deliver and/or pick up mail from boxes along the line of travel. The following are examples of conditions which will require the supplier to dismount from a vehicle to transact business:
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(b) When necessary to obtain a signed receipt for accountable mail (i.e., Express, Certified, and Registered) or to deliver and/or pick up parcels.…
(5) Supplier will be required to deviate up to ½ mile and retrace (total of one mile) to transact business involving the classes of mail listed in (3)(d).…
(AF 1, pp. 11-12).
6. Prior to the award of the contract, Appellant had had experience with box deliveries in the same general part of West Virginia. Appellant had been the employee of a different box delivery contractor and knew how to perform box delivery services. (Stip. 4; Hearing Transcript, Volume II, p. 52 (Tr. II-52))[2].
7. At the start of the contract term, the AO discussed contract performance requirements with Appellant. The AO advised Appellant that she did not expect his performance to be perfect at the beginning, but that she expected him to keep progressing over time. (Tr. I-9).
8. During the period of Appellant’s contract performance, he made arrangements to receive regular help from the person he also identified as his substitute. His substitute had also made an offer when Appellant’s contract was advertised. Prior to bidding, both the substitute and Appellant had had a discussion with a representative in the contracting officer’s office with regard to handling packages on the route. They had advised the representative that their understanding was that the then current contractor was not required to attempt delivery of large packages - i.e., those that would not fit into a customer’s box - or any item, such as certified mail, that required a signature from the customer (accountable items), but would only have to leave notices for such items in the customer’s box. The representative commented that if that was the way the route was being run, then that was probably the way it would be run under the new contract. (Tr. III-19, 20).
9. The previous contractor on the route delivered large packages and accountable items to those customers that wanted those items brought out. For the others, he would leave notices in the customers’ boxes so they could come to the post office to pick them up. The previous contractor was also generally able to complete the route in a timely manner and make the schedule at each post office. (Tr. I-27, 145-46, 169).
10. No later than about two weeks after beginning contract performance, Appellant was required by the Administrative Official to attempt delivery of large packages and accountable items (Tr. I-40, 109, 133, 145; II-12; III-21, 51).[3]
11. The previous contractor had placed tags on the slots on the case at the Foster Post Office so that he could easily identify those customers who had valid mail forwarding orders or orders to hold their mail. Those tags were on the case on the last day of the previous contractor’s term and were seen by Appellant’s substitute on the morning of Appellant’s first day. However, by the time Appellant reached Foster that afternoon, the tags were gone. Appellant asked the Foster postmaster for a list of those customers, but the postmaster told him she did not know how to get such a list. She did not provide a list until two or three weeks into contract performance. (Tr. II-24, 31; III-8, 9).
12. In addition, on Appellant’s first day there was a large amount of mail at the Foster Post Office that should have been delivered during the previous contractor’s term, but was not. Appellant was given a key to the post office and he and his substitute worked after hours during the first week or two of the contract term to get that mail sorted and delivered. (Tr. II-25, 37; III-7, 25).
13. It was the Foster postmaster’s responsibility to separate the mail for Appellant’s route from the other mail received at the post office and have it available for Appellant by the time he was scheduled to arrive at Foster. However, on approximately 10 percent of the days during the period of Appellant’s performance, the Foster postmaster would find additional mail belonging to Appellant’s route after Appellant had finished casing and “pulling down” the mail into delivery order and, on occasion, loading the mail in his vehicle. On those occasions, if the mail was First-Class mail, Appellant would take additional time and either sort the additional mail directly into the trays of pulled-down mail, or place the original mail back into the case, sort the new mail into the case and then pull down the mail again. If the additional mail was not First-Class mail, Appellant, with the concurrence of the Foster postmaster, would not deliver the mail until the next day. (Tr. II-15-17, 65; III-22, 28, 33).
14. Appellant delivered mail from his vehicle into roadside mailboxes. However, in order to attempt delivery of large packages and accountable items (see Finding 8), it was necessary for Appellant to know the physical location of the house associated with each roadside box to which such mail was addressed. For deliveries out of the Danville Post Office, a city-style system of addresses had been implemented, and the physical addresses were on labels attached to the case. For other parts of Appellant’s route, the address system had not yet been implemented. At Foster there was a system through which customers would fill out route cards, indicating whether they wanted a carrier to attempt delivery of such items to their homes or whether they just wanted notices left in their boxes so they could pick up the items themselves from the post office. If a customer wanted items delivered, the customer could include directions to his or her home on the route card.[4] (Tr. I-77, 78, 107, 108; III-47, 48, 56).
15. If Appellant did not have a customer’s physical address, his practice was to inquire at the house nearest the box to see if the resident knew where the addressee lived. If Appellant learned the location of the customer, he would attempt delivery of the item if the location required diverting ½ mile or less, as required by the contract (Finding 5). (Tr. III-30, 31).
16. Appellant first asked the postmaster at Foster for a list of physical addresses for Foster customers. When he did not receive one, he asked the postmaster at Danville, who was also the AO. He never received a list from either postmaster. (Tr. II-18; III-28, 29).
17. Respondent used at least two forms to keep track of and record Appellant’s contract performance. PS Form 5500, Contract Route Irregularity Report, was used to report failures to meet the contract schedule, among other irregularities. PS Form 5399, Contract Routes Performance Record, was used to record the actual arrival and departure times at each post office on Appellant’s route. (E.g., AF 8, 11; Respondent’s Exhibit No. (Resp. Exh.) 4; Appellant’s Exhibit No. (Appnt. Exh.) 1).
18. During the 78 delivery days of Appellant’s contract performance (July 1 - September 29, 2005), Appellant generally left the Racine Post Office at the beginning of his route within 15 minutes of the required time of 9:00 a.m., missing that deadline on 14 of the days.[5] However, on only 11 seemingly random days[6] did he return to Racine at the end of his route within 15 minutes of the required time of 5:00 p.m. On at least 29 of the remaining 67 days, Appellant arrived at Racine sufficiently late that he missed the truck that was scheduled to transport to Respondent’s processing plant in Charleston any outbound mail he had picked up from customers’ boxes during the course of the day. On those 29 days, Respondent paid Appellant for an extra trip to take the mail to Charleston. (Resp. Exh. 4, pp. 238, 239, 244, 245, 246, 247, 252, 253; Tr. I-23, 58, 127; II-63ff.).
19. The record evidence with respect to Appellant’s arrival at the Foster Post Office covers only the first 30 delivery days of Appellant’s performance. However, on all but 3 of those days Appellant arrived at Foster more than 15 minutes after the required arrival time of 11:20 a.m. Appellant was scheduled to leave Foster one hour and fifty-five minutes after arriving, but on only 4 occasions did he do so. Moreover, on no occasions did he leave Foster within 15 minutes of the required time of 1:15 p.m. (Finding 3; Resp. Exh. 4, pp. 234, 242).
20. Under the contract schedule, Appellant was required to arrive at the Danville Post Office by 3:10 p.m. and leave to deliver that part of the route by 3:30 p.m. Appellant’s substitute driver frequently cased and delivered the Danville part of the route. However, the substitute was also a mail delivery contractor with a route of her own and on the days she helped Appellant or ran the Danville portion of the route for him she generally would not get to Danville until approximately 4:15 or 4:30 p.m. - well after the time the contract required Appellant to leave Danville. At times, the Danville Postmaster (AO) would case the Danville mail so that it was ready to go when Appellant or his substitute arrived. On a number of occasions, the postmaster/AO cased and delivered the Danville portion of the route herself. Beginning on August 1, 2005, and during the last 51 delivery days of Appellant’s performance,[7] Appellant or his substitute arrived at Danville within 15 minutes of the required time on only 19 seemingly random occasions[8] and left Danville within 15 minutes of 3:30 p.m. on 18 of those days. (Resp. Exh. 4, pp. 240, 248, 250; Tr. I-17, 41; II-61; III-43, 49; Stip. 18, 19).
21. The postmasters at Racine, Foster, and Danville all received numerous complaints from customers, primarily regarding late delivery of mail.[9] (Tr. I-21, 67, 129).
22. Beginning on July 23, 2005, the AO began to issue Appellant Forms 5500, primarily because of his late arrivals at and departures from the Danville Post Office. Forms 5500 were issued for failure to meet the schedule on July 23 and 25-29 as well as August 1, 3 and 4. In addition, the Foster postmaster issued a Form 5500 on August 4, 2005, for Appellant’s failure to reach Foster on time on his return trip to Racine. (AF 11; Resp. Exh. 3, p. 208).
23. By letter dated September 1, 2005, the contracting officer issued what he denominated a “Final Letter of Warning” to Appellant. In the letter, the contracting officer cited a series of Forms 5500 that had been issued to Appellant for service deficiencies between August 8 and August 22, 2005. Those Forms primarily cited Appellant’s failure to meet the schedule at Danville, Foster and Racine, and, in addition, a number of customer complaints related to late delivery and misdelivery of mail. The contracting officer warned Appellant that unless his poor performance was cured within 3 days and maintained for the remaining term of the contract, the contracting officer would terminate the contract for default. (AF 7, 8).
24. Thereafter, between September 1 and 22, 2005, Appellant was late serving Racine and Danville on 13 occasions and was issued Forms 5500 for failing to meet the schedule. (AF 6, p. 98; Resp. Exh. 3, pp. 220-223, 225-229, 231-233).
25. Contract clause 2.3.1(m) stated, “The Postal Service may terminate this contract … for default by the supplier ….” Clause B-69, “Events of Default (January 1997),” incorporated by reference into the contract, provided that “[t]he supplier's failure to perform service according to the terms of the contract” justified a default termination. (AF 1, pp. 34, 35 (clauses 2.3.1(m), 2.3.1(s))).
26. In a final decision dated October 7, 2005, the contracting officer terminated the contract for default, as of the close of business on September 29, 2005. Appellant filed a timely appeal of the final decision. (AF 3, 4, 5).
27. After the termination, the route was changed somewhat to eliminate some left turns. However, the mileage and number of boxes were unchanged. The contractor who took over the route following the termination was, except on a few occasions, able to meet the contract schedule. (Tr. I-27, 28, 152; Appnt. Exh. 1).
DECISION
Respondent, which has the burden of proof in this termination for default appeal, see Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 765 (Fed. Cir. 1987); Charli Selsa Schiver d/b/a NGX-Schiver, PSBCA No. 4545, 02-2 BCA ¶ 31,937; Douglas Cremer, PSBCA No. 3108, 93-2 BCA ¶ 25,565, argues primarily that Appellant’s record of late service under the contract and the impact of that service on Respondent justify the contracting officer’s decision to terminate the contract for default. Respondent also argues that the decision to terminate was not arbitrary, capricious or an abuse of discretion, and that Appellant has not shown that his failure to meet the contract schedule was excusable.
It is undisputed that Appellant regularly failed to meet the contract schedule requirements, and that conclusion is fully supported by the record evidence (Findings 18-20). Moreover, Appellant’s failures had material impacts on Respondent. Because of Appellant’s late service, Respondent was frequently put to the additional expense of an unscheduled trip to Charleston in order to avoid delaying the mail that Appellant had picked up during the course of his day. In addition, Respondent’s postmasters were required to address complaints from customers who were unhappy about the late delivery of their mail. (Findings 18, 21).
These failures by Appellant represented material failures to comply with the terms of the contract and deprived Respondent of the regular and reliable service to which it was entitled. E.g., Charli Selsa Schiver d/b/a NGX-Schiver, PSBCA No. 4545, 02-2 BCA ¶ 31,937; Richard Jackson, PSBCA No. 5183, 07-1 BCA ¶ 33,519.
As Respondent has demonstrated 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, 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.
Appellant argues that the problems under the contract that led to the default were caused by the poor performance of the contracting officer and AO in that they did not help him when he ran into difficulties with the route and with the other postmasters. From the record evidence, we have found that Appellant encountered problems not of his own making in operating the portion of this route originating at the Foster Post Office. As set out in Findings 11-13, above, Appellant found that the information identifying those customers with hold or forwarding orders in place was not available to him when he began the route and he was unable to get a list of those customers until two or three weeks into the contract performance period. In addition, Appellant found a large amount of undelivered mail at Foster when he began the route and it took him a week or two to sort and deliver that mail. Finally, it appears that on approximately 10 percent of the days, the Foster Postmaster did not have all of Appellant’s mail separated out in time for him to case it efficiently.
These deficiencies at Foster, however, do not account for Appellant’s extensive and continuing failure to meet the contract schedule. The first two deficiencies, although significant, were cleared up within three weeks of the beginning of the contract. The evidence regarding the failure of the Foster Postmaster to have Appellant’s mail separated did not quantify the resulting delays and, therefore, did not demonstrate that the delays were uniformly significant. We note that Appellant was only required to deliver the First Class mail from the “late” mail, and at times was able to sort that mail into the trays of pulled-down mail without first having to put all the mail back into the case. Moreover, this delay occurred only approximately 10 percent of the time, while Appellant was late reaching Danville (the stop after Foster) approximately two-thirds of the time (Finding 20). Accordingly, we conclude that these three sources of delay do not serve to excuse Appellant’s regular failure to meet the contract schedule.
Appellant’s primary argument relates to the requirement that he contends was improperly imposed on him with respect to attempting delivery of large parcels and accountable mail. Appellant does not dispute that under the contract language he could be required to divert up to ½ mile from the route to attempt such deliveries at a customer’s house. He argues, however, that he was assured that he would not be required to do so on this route. Appellant discussed this matter in advance with the contracting officer’s office and was told that how these items were to be handled was up to the AO. Appellant asserts that he spoke to the AO before bidding and was told that he would not have to attempt such deliveries. Therefore, he argues, he bid on the route with that expectation - only to have the rules changed once he began performing, when the AO insisted that he dismount from his vehicle and divert up to ½ mile when necessary to deliver large packages and accountable classes of mail. Appellant also argues that the previous contractor had not been required to attempt such deliveries. Related to this argument is Appellant’s complaint that he was unable to get a list of physical addresses for his customers (Finding 16).
Having considered the evidence, we are not persuaded that Appellant was told by the AO prior to bidding that he would not have to attempt delivery of parcels and accountable items. The evidence on this point was contradictory, with Appellant testifying that the AO initially told him he would not have to attempt such deliveries and the AO testifying unequivocally that no one from her office advised Appellant that there was no requirement for such deliveries.[10] However, Appellant testified that his conversation with the AO took place in June 2005, which was after he had submitted his offer.[11] Therefore, if Appellant based his offer on not having to attempt delivery of these items - i.e., on not having to provide all the services possible for a box-delivery contractor - he reached that conclusion on his own and not based on a prior discussion with the AO. Moreover, in an August 11, 2005 letter to the AO, Appellant said he understood that the relief from delivering accountable mail was “till I got a better understanding of each casing.” (AF 10). This is contrary to the representation Appellant now makes that he was told he would never be required to attempt such deliveries. Finally, the undisputed evidence demonstrates that, contrary to Appellant’s contention, the previous contractor did attempt such deliveries as part of his normal operations. Therefore, we conclude that attempting delivery of large parcels and accountable items was part of Appellant’s contract requirements.
Having so concluded, we must address whether Appellant’s alleged difficulty in securing the physical addresses associated with the boxes served to excuse his late performance. Appellant did not testify that this presented a difficulty with regard to deliveries out of the Racine and Peytona Post Offices (see footnote 4), and we note that the physical addresses for the Danville Post Office were on labels attached to the case. Therefore, it appears that Appellant’s alleged difficulties were primarily with deliveries out of the Foster Post Office.
As with the delays associated with the failures of the Foster postmaster to have Appellant’s mail ready for him, Appellant’s evidence did not quantify the delays caused by the alleged absence of physical addresses. He did not present evidence concerning the frequency of such delays, the approximate number of deliverables involved, or the amount of time he allegedly expended locating physical addresses of the customers on his route. More important, he did not present evidence explaining why he did not use the route cards that had been filled out by his customers and which contained directions to the homes of those customers who wanted the applicable items brought out by the carrier (see Finding 14). Absent such evidence, we cannot conclude that the lack of physical addresses, even if proven, served to excuse Appellant’s regular failure to meet the contract schedule.
Thus, Appellant has not shown that his regular failure to meet the contract schedule was excusable or demonstrated that the contracting officer’s determination to terminate the contract was an abuse of his discretion. 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] Administrative Judge Gary E. Shapiro took no part in the Board’s consideration of this appeal.
[2] The hearing in this appeal took place over three days. Transcript Volume I contains the testimony from April 18, 2007, Volume II refers to April 19, 2007, and Volume III refers to additional testimony taken by telephone on July 31, 2007.
[3] There was conflicting testimony regarding whether Appellant was required to attempt delivery of large packages and accountable items from the very beginning of contract performance. See Tr. III-51. However, it is undisputed that Appellant was required to do so within a short time of beginning contract performance. It is not necessary to resolve this conflict in order to decide the appeal.
[4] The same system likely existed at the other post offices as well - i.e., Peytona and Racine - but the record does not indicate that there were problems associated with deliveries out of those offices. (Tr. III-48).
[5] PS Form 5500, Contract Route Irregularity Report, indicates that late operations of 15 minutes or less are to be reported as “Information Only.” Accordingly, when examining Appellant’s performance as reflected in the PS Forms 5399, we have not counted such operations against Appellant. (E.g., AF 8, p. 102).
[6] The days on which Appellant made the scheduled time were scattered throughout the period of performance - i.e., they were not, for example, concentrated toward the end of his period of performance, which might indicate that Appellant had solved the problems that were causing him to miss the schedule.
[7] Some of the entries on the Forms 5399 before August 1, 2005 are missing and others may have been filled in by the Danville postmaster. See Resp. Exh. 4, pp. 236, 240; Tr. I-41; AF 11, pp. 136-140 (Forms 5500 indicating that on a number of days Appellant failed to fill in the Form 5399 or that the postmaster filled it in). Beginning on August 1, 2005, Appellant or his substitute filled in all the entries on the Forms 5399 (Tr. II-63ff.).
[9] The complaints received at Racine were primarily from customers who were on the portion of the route serviced during the return trip from Danville to Racine (Tr. I-129).
[11] And after the May 26, 2005 solicitation closing date (AF 1, p. 4).