JEAN E. SMITH

Under Contract No. HCR 045B9

PSBCA Nos. 5360 and 6125

APPEARANCE FOR APPELLANT
Jean E. Smith

APPEARANCE FOR RESPONDENT
Michelle Windmueller, Esq.

OPINION OF THE BOARD[1]

            Appellant, Jean E. Smith, has appealed from the decision of the contracting officer terminating for default her mail delivery contract with Respondent, United States Postal Service.  Appellant also appealed from the contracting officer’s denial of her monetary claim for continuing payment under the contract and for liquidated damages as a result of the challenged default termination.  A hearing was conducted in Portland, Maine.  Both entitlement and quantum are at issue in this proceeding (Order of February 8, 2008).

FINDINGS OF FACT

Termination for Default

            1.  On March 13, 2006, Appellant was awarded Contract No. HCR 045B9 with a term beginning March 18, 2006, and extending through March 12, 2010.  The contract required Appellant to case (sort) and deliver mail to customer boxes according to a set schedule along a route with a specified line-of-travel originating and ending at the New Harbor, Maine Post Office and also serving post offices at Round Pond and Chamberlain, Maine.  The annual rate for the contract, as of May 1, 2006, was $50,052.21.  The Administrative Official (AO) for the contract – defined in the contract as the “official designated by a contracting officer to supervise and administer” the contract - was the postmaster of the New Harbor Post Office.  The AO had received no formal training for that position, which she assumed in July 2005.  (Appeal File Tab (AF) 1, pp. 16, 36 (clause 2.2.1), 61-68; Stipulation paragraph (Stip.) 1, 3; Transcript, first day, p. (Tr. I-) 113, 114).[2]

            2.  The following contract provisions are relevant to this dispute:

            a.  Under paragraph h of clause B.3, “General Requirements and Prohibitions,” Appellant was required to “deny access to the mail to any employees or personnel when required to do so by the contracting officer.”  (AF 1, p. 19).

            b.  Under clause 2.3.1.m, “Termination for Default,” of the General Clauses, Respondent had the right to terminate the contract “for default by the supplier [Appellant].”  Under clause 2.3.1.s (8), “Events of Default,” the contract could be terminated for the “supplier’s failure to perform service according to the terms of the contract.”  In addition, if the termination for default was later determined to be improper, the termination “will be deemed a termination for convenience.”  (AF 1, pp. 43, 45).

            c.  Under clauses 2.3.3a and 2.3.2.e of the General Clauses, the contractor would be entitled to payment of one-third the annual rate if the contract were terminated for convenience during the first two years of the performance period.  (AF 1, pp. 46, 47).

            d.  Under clause 2.3.1.s (1), “Claims and Disputes,” all disputes arising under the contract were to be resolved under the clause, and “[t]he supplier must proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under the contract….”  (AF 1, p. 44).

            3.  On March 16, 2006, at about the time Appellant’s contract term began, Respondent’s Maine District issued a memorandum addressed to “All Contractors/Drivers.”  The memorandum “re-emphasize[d]” certain policies, including a requirement that “Postal I.D. must be worn at all times when you are on your route or at postal facilities.”  The memorandum went on to state that “All Post Offices have been reminded to initiate a PS Form 5500^[[3]] if …these policies are not followed.”  (Appellant’s Exhibit (AExh) 6, Document A).

            4.  At the beginning of the contract term, the AO provided Appellant with some training in casing and “pulling down” mail from the case in delivery order.  She also gave Appellant a copy of a May 24, 2006 letter from the Postal Inspection Service approving Appellant’s permanent[4] clearance and stating that Appellant was required to wear her ID badge on postal property.  (Tr. I- 134, 160; Tr. II- 17; AExh 1).

            5.  Appellant had difficulties meeting the schedule set out in the contract at the beginning of her term.  She also had repeated personality conflicts with Postal Service personnel, particularly with the postmaster at Round Pond.  On May 3, 2006, she participated in a meeting with several of Respondent’s officials, including the Administrative Official (New Harbor Postmaster), the Round Pond Postmaster, and a postal operations manager.  At that meeting, the participants primarily discussed the difficulties Appellant was having meeting the contract time schedule.  Various techniques were suggested to Appellant to help her case the mail, pull down the mail, and deliver the mail more efficiently.  The participants also discussed the need to treat each other with dignity and respect in their interactions.  (Tr. I- 125, 138, 141, 143, 145, 169; Tr. II- 69; AF 6, pp. 104, 105).

            6.  A second meeting, with the same participants, was held on July 6, 2006, to discuss a number of irregularities in Appellant’s performance.  Appellant was still frequently failing to meet the contract schedule.  In addition, Appellant was delivering part or all of her route in the reverse direction and driving on the wrong side of the road in order to do so.[5]  Finally, Appellant had repeatedly challenged the authority of the AO to give her direction of any kind.  At the meeting, the postal operations manager emphasized to Appellant that she was required to report to the New Harbor Post Office at the time specified in her contract; that she was required to deliver the route in the order specified in the contract and could not deliver in reverse order or drive on the wrong side of the road; and that she was required to follow the directions of the AO.  (AF 6, pp. 98, 99; Tr. I- 126, 138-142; Tr. II- 31, 32).

            7.  On August 8, 2006, the Round Pond postmaster insisted that Appellant wear her ID badge at the post office.  Appellant refused, arguing that there was no security reason for the badge and that it was a safety hazard because it had gotten caught on equipment - specifically, mail trays - a couple of times.  The postmaster directed Appellant to leave the post office if she would not wear the badge, but Appellant refused to do so.  The postmaster then had a conversation with the AO, who indicated that she would deal with the problem the next day.  (Tr. II- 35, 36).

            8.  On August 9, 2006, the AO approached Appellant at the beginning of the day at the New Harbor Post Office and asked her where her ID badge was.  Appellant replied that it was in her car.  The AO asked Appellant to get the badge and to wear it in the post office.  Appellant refused, stating that the badge, which hung around her neck, represented a safety hazard in that it choked her.[6]  The AO replied that Appellant did not have to wear the badge around her neck, only that it be visible.  Appellant continued to refuse to retrieve and wear the badge.  The conversation between the two became increasingly heated as the AO repeated her direction several more times, but Appellant refused to comply and stated that she would not do anything the AO directed.  Appellant also told the AO that she (the AO) should fill out a Form 5500 so that Appellant could respond to it in writing.  The AO declined to fill out a Form 5500 and told Appellant that she would have to leave the post office if she did not wear her badge.  Appellant refused to leave.  The AO also sought guidance from her manager by telephone, but Appellant followed her around while she was trying to make the call.  At that point, after asking Appellant once more to leave the post office if she did not put on her badge, and being concerned about Appellant following her around and interfering with her ability to do her job, the AO called the sheriff’s department.  (Tr. I- 115-18, 127-29; Tr. II- 37-38; Stip. 4).

            9.  Two sheriff’s deputies responded to the AO’s call.  One deputy held a discussion with the AO in the post office lobby and asked her what she wanted.  The AO replied that she wanted Appellant to leave the post office if she did not get her badge.  Interrupting the conversation between the deputy and the AO, Appellant told the deputy that she wanted to go to her car and get her contract and badge to prove to him that she had the right to be in the post office.  The deputy told Appellant to step aside while he spoke to the AO, and that he would speak to her in a minute.  However, Appellant persisted in demanding that she be allowed to go to her car, while the deputy repeatedly told her to step aside and wait.  He also warned her that she would be arrested if she did not step aside.  After several such exchanges with the deputy, Appellant finally said to him, “Fine, arrest me.”  The first deputy, stating that the charge was “criminal trespass,” then had the other deputy handcuff Appellant and remove her from the post office.  (Tr. I- 163-64; Tr. II- 38-41; Stip. 5).

            10.  On the same day, Appellant appeared before a Bail Commissioner in the Wiscasset, Maine District Court.  Appellant was released without the payment of bail, pending a further court appearance.  However, as a condition to secure her release, Appellant was barred from any direct contact with the AO and from going onto the property of the New Harbor, Round Pond, or Chamberlain post offices.  (AF 5).[7]

            11.  Later that day, Respondent’s contract specialist was contacted by the sheriff’s deputy and informed of Appellant’s arrest.  The contract specialist and his supervisor had a telephone conversation with Appellant that afternoon and explained to her that she was still responsible for performing her contract.  They asked Appellant whether she had someone who could perform the service and she responded that she did not.  They advised her that they would not recommend termination at that time and gave her until the next day to find someone to perform the service.  (Tr. I- 65, 95-96; Tr. II- 42-43).

            12.  By letter dated August 9, 2006, the contracting officer temporarily denied Appellant access to the mails.  He stated in his letter that his action was based on reports that Appellant had been involved in an incident at the New Harbor Post Office that had led to her arrest and to her being barred from the New Harbor, Round Pond, and Chamberlain post offices.  The letter also advised Appellant that the denial of access did not relieve her of responsibility for providing service under the contract, and that she would have to continue service using hired help.  The letter also stated that the denial of access would remain in effect until such time as the above events were adjudicated in the courts.  (AF 4). 

            13.  After her conversation with the contract specialist and his supervisor, Appellant attempted to find a substitute.  She contacted the former contractor on her route and another current contractor.  Neither was willing to act as a substitute.  She also attempted to reach someone she had used as a substitute a few times, but was unable to reach her.  (Tr. II- 42).

            14.  The contract specialist and his supervisor called Appellant again on August 10, 2006.  Appellant informed them that she had been unable to find a substitute and that she would be unable to continue contract performance.  She stated to them that if the AO would be willing to drop the charges, she could return to the post office.  However, they told her that it was now a criminal matter and that they were not in a position to change the conditions.  (Tr. I- 97-98; Tr. II- 43).  Appellant did not provide the required service under the contract after August 8, 2006.  (Tr. I- 35-36, 65-66).

            15.  By letter dated August 24, 2006, the contracting officer terminated Appellant’s contract for default, effective at the close of business on August 10, 2006, based primarily on her failure to perform the required contract services on August 9 or 10, 2006, or on any date thereafter (AF 3).  Appellant filed a timely appeal, which was docketed as PSBCA No. 5360.

Appellant’s Claim

            16.  By letter dated May 23, 2007, Appellant filed a monetary claim with the contracting officer.  In her letter, Appellant stated that she had been found not guilty of the charge of criminal trespass.[8]  As a result, Appellant contended that the AO’s call to the sheriff’s department to have her removed from the New Harbor Post Office was without good cause and, therefore, that her arrest and resulting loss of her contract were the responsibility of the Postal Service.  Appellant contended that her contract remained in effect and that she was entitled to payment at the contract rate unless and until the contracting officer terminated the contract for convenience, plus the payment of the termination for convenience indemnity once the contract was so terminated.  As of the date of her claim letter, Appellant calculated the amount due as $53,429.99.  (See PSBCA No. 6125 docket file).

            17.  In a final decision dated June 14, 2007, the contracting officer denied Appellant’s claim in its entirety.  By letter dated July 27, 2007, Appellant filed a timely appeal of the final decision, which was docketed as PSBCA No. 6125.  (Id.)

DECISION

Termination for Default

            Respondent, which has the burden of proof in this default termination case, has demonstrated that Appellant failed to provide service under her contract at any time after August 8, 2006.  This is sufficient to establish a prima facie case sustaining the default termination.  Michelle R. P’Pool, PSBCA No. 5294, 08-1 BCA ¶ 33,824.  Therefore, the burden shifts to Appellant to present evidence of excusable causes, Charli Selsa Schiver d/b/a NGX-Schiver, PSBCA No. 4545, 02-2 BCA ¶ 31,937; 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.

            By way of excuse, Appellant argues primarily that the AO, who had received no formal training for that position, failed to follow accepted procedures by not simply issuing a Form 5500 in the face of Appellant’s refusal to wear her badge and, therefore, overreacted to the situation when she decided to call the sheriff’s department to have Appellant removed from the post office.  Appellant contends that had the AO issued the Form 5500, it would have allowed Appellant to document in writing the reason she had stated for refusing to wear the badge – i.e., the fact that she believed it compromised her safety.

            The only place the procedure to which Appellant refers appears in the record is in a March 16, 2006 memorandum addressed to “All Drivers/Contractors” (Finding 3).  The apparent objective of the cited memo was, in relevant part, to emphasize to the addressees that they were to wear their badges when on their routes or in postal facilities.  The language regarding memorializing violations by way of a Form 5500 did not limit the actions of Postal Service personnel to filling out that form.  Rather, the language merely served as a reminder to Postal Service personnel to document such events, and there has been no showing that the language was inserted in the memo for the benefit of contractors.  Therefore, the language conferred no contractual rights on Appellant, see Shorthaul Trucking Co., PSBCA No. 1046, 1985 WL 16706, (P.S.B.C.A.), 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, and the AO’s failure to follow the procedure did not constitute a breach of contract.

            In the context of the events that occurred, we also do not accept Appellant’s argument that the AO’s decision to call the sheriff constituted an overreaction that would excuse Appellant’s failure to perform her contract.  Notwithstanding both the contract language defining the AO’s authority (Finding 1) and also the specific direction of Respondent’s operations manager that Appellant was required to follow the AO’s directions (Finding 6), Appellant persisted in challenging the AO’s authority to give her instructions.  Appellant was well aware of the requirement that she wear her ID badge within postal facilities.  It was within the AO’s authority to enforce the requirement and, having decided to require Appellant to leave if she did not comply, it was not unreasonable for the AO to have sought help from law enforcement authorities when Appellant refused to leave.  We note particularly that compliance with the AO’s demand would have placed only a trivial burden on Appellant,[9] and if she believed that there was a valid basis for not continuing to wear her badge, she could have raised the issue with the contracting officer.  E.g., Andrew M. Johnson, PSBCA Nos. 5175, 5210, 5242, 07-1 BCA ¶ 33,464, recon. den., 07-1 BCA ¶ 33,582.

            Moreover, it was Appellant’s interaction with the sheriff’s deputy that led directly to her arrest.  After trying to insert herself into the conversation between the deputy and the AO/New Harbor Postmaster and being repeatedly warned by the deputy to stop, the deputy placed her under arrest.  There is no evidence that the AO called the sheriff for the purpose of having Appellant arrested.  Rather, after finding herself unable to persuade Appellant to either retrieve and wear her badge or leave the post office, she called to secure help in requiring Appellant to leave if she would not wear her badge.  We note also that it was the conditions imposed by the Bail Commissioner for her release that made it impossible for Appellant to personally perform her contract obligations,[10] and there is no evidence that any of Respondent’s employees requested that those conditions be imposed.[11]

            Appellant also argues that she had a reasonable expectation that Respondent would provide a “qualified” Administrative Official, and that had she known an “unqualified” AO would be assigned, she would not have agreed to the terms and conditions of the contract.  Appellant argues that, as it applies to this case, the contract provision giving the AO the authority to “supervise and administer” the contract was unconscionable.

            This argument is without merit.  We need not address the legal requirements for finding unconscionability, since Appellant has not proven the factual premise that she claimed supported her argument - i.e., that the AO was “unqualified” to perform her job.  While the AO had not received formal training for those duties, there is nothing in the record that indicates that she failed to perform the duties of the position in any relevant area.  The basis for Appellant’s argument is the fact that the AO did not issue a Form 5500 on August 9 - i.e., that she did not follow what Appellant argued was the mandate of the March 16, 2006 memorandum.  We have addressed that contention above, and need not repeat the discussion here.

            Appellant also calls attention to what she apparently argues is an inconsistency between the contracting officer’s August 9 temporary (“until such time as [this] is adjudicated in the courts.”) denial of access, and the fact that he then terminated the contract for default on August 24, 2006 –  before the criminal case was adjudicated.  Appellant argues that this was evidence that Respondent had no intention of handling the “situation” fairly and honestly.  As noted above (Finding 2a), the contracting officer had the right under the contract to deny Appellant access to the mail, and that he did so on a temporary basis after receiving a report of Appellant’s arrest was not unreasonable.  See, e.g., Andrew M. Johnson, PSBCA Nos. 5175, 5210, 5242, 07-1 BCA ¶ 33,464, recon. den. 07-1 BCA ¶ 33,582.  However, once it became clear that Appellant would not continue performing the contract using a hired driver, it was not unreasonable for the contracting officer to terminate the contract for default.[12]  Thus, Appellant’s argument does not provide a basis for overturning the termination.

            Appellant has failed to show excusable causes for her failure to provide service under her contract and has not shown that the termination was an abuse of the contracting officer’s discretion.[13]  Accordingly, the appeal of the termination, PSBCA No. 5360, is denied.

Appellant’s Claim

            Contrary to Appellant’s argument (Finding 16), the fact that she was found not guilty of the criminal charge does not constitute a basis for concluding that she is entitled to continuing payments under the contract or to the indemnity specified for a termination for convenience.  As discussed above, the termination for default was proper and, therefore, Appellant is not entitled to the payments she has claimed.

Accordingly, the appeal in PSBCA No. 6125 is denied.

David I. Brochstein
Administrative Judge
Vice Chairman

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 matter.

[2]   Citations from the transcript of the second hearing day are identified as “Tr. II-.”

[3]   Contract Route Irregularity Report (e.g., AF 7, p. 115).

[4]   Appellant had been issued a temporary clearance and ID at the beginning of her contract term (Tr. I- 50, 160).

[5]   Delivering her route while driving on the right side of the road required that Appellant deliver mail to boxes out of the passenger-side window.  This was difficult for Appellant because her vehicle had a stick shift.  By delivering in the reverse order and driving on the wrong side of the road, Appellant was able to deliver mail out of the driver’s side window, rather than out of the passenger-side window.  (Tr. I- 140).

[6]   Appellant was aware that clip-on badge holders were available, but had never asked the AO about getting one (Tr. II- 26, 84).

[7]   The AO was informed by the sheriff by telephone after the arrest that as a condition of bail, Appellant would be barred from the New Harbor Post Office.  The AO advised the sheriff that Appellant’s contract also included the Round Pond and Chamberlain post offices.  The sheriff advised the AO that those locations would also be added to the restrictions.  (Tr. I- 165-66).

[8]   The parties have stipulated that Appellant was found not guilty of the criminal trespass charge following a jury trial (Tr. I- 5).

[9]   The badge was in Appellant’s vehicle, which presumably was parked just outside the post office, and could have been easily retrieved by her.  With regard to Appellant’s expressed concern over injuries, we note that she was aware that there were clip-on badge holders available.  Moreover, when she expressed her concerns to the AO about wearing the badge around her neck, the AO indicated that she did not have to do so as long as the badge was visible.  We find it inconceivable that Appellant could not easily have figured out a way to wear her badge so that it was both visible and not around her neck.  Rather, Appellant flatly refused to comply with the AO’s direction that she wear her badge.

[10]   For this reason, the fact that the contracting officer later issued a letter denying Appellant access to the mail pending the adjudication of the charges against her is of no particular relevance to the appeal before us.

[11]   All of the Postal Service witnesses testified that neither they nor any other Postal Service personnel to their knowledge had any part in establishing the conditions of Appellant’s release.  (Tr. I-  29, 68, 96, 165-166).  Appellant has not offered any persuasive, non-hearsay evidence to the contrary.  (See, e.g., Tr. II- 43).  As noted in Footnote 7, above, when informed by the sheriff that Appellant would be barred from the New Harbor Post Office, the AO told him of the other post offices Appellant served, and the sheriff added them to the conditions of release.  There is no evidence that the AO specifically asked that Appellant be barred from the other post offices.  Moreover, even if the sheriff interpreted the AO’s comment as such a request, there is no evidence that the AO was behind the initial idea of barring Appellant from any post offices, and the fact that the sheriff intended to bar Appellant from the New Harbor Post Office would have been sufficient by itself to prevent her from operating her contract without hired help.

[12]   We note that the contracting officer waited approximately two weeks before actually terminating the contract (Findings 14, 15).

[13]   Respondent argued that the default termination also was justified on a number of other grounds.  As we find that Appellant’s failure to perform after August 8, 2006, was sufficient to justify the termination, we do not address those other arguments.