Appeal of

JUDIE JACKSON

Under Contract No. 555976+080-07-01

PSBCA No. 6180

APPEARANCE FOR APPELLANT
Marie C. Bechtel, Esq.

APPEARANCE FOR RESPONDENT
Joseph Anzalone, Esq.

OPINION OF THE BOARD ON RESPONDENT’S
MOTION TO DISMISS IN PART AND FOR SUMMARY JUDGMENT

            Appellant, Judie Jackson, provided cleaning services at the Oak Hill, West Virginia Post Office under an agreement executed by the temporary postmaster.  During the term of the agreement, a successor temporary postmaster notified Appellant that the agreement was being terminated pursuant to a provision in the agreement allowing either party to terminate on 30 days’ notice.  Appellant challenged the termination and asserted a claim for reinstatement and back pay, which was denied.  She appealed that denial.

            Respondent, United States Postal Service, filed a Motion to Dismiss in Part and for Summary Judgment, contending that Appellant’s claim for reinstatement should be dismissed as it seeks relief beyond the Board’s authority to grant and that it is entitled to judgment as a matter of law on Appellant’s monetary claim.  It relied on documents in the appeal file and supported its motions with declarations under penalty of perjury.  Appellant filed an opposition, but did not include additional documents or declarations.  For purposes of deciding the motions, the following facts have been established as undisputed.

UNDISPUTED FACTS

            1.  In September 2006, Appellant and the officer-in-charge of the Oak Hill, West Virginia Post Office, who acted as the postmaster of the office on a temporary basis, executed a Cleaning Agreement (Appeal File, tab (“AF”) 7) under which Appellant agreed to supply cleaning services at the post office for $250 per week.  They also executed a Cleaning Services Agreement And Payment Authorization (“Payment Authorization”) (AF 8), to authorize payments for the service.  The Payment Authorization noted that the service was to begin on September 26, 2006, and end on September 27, 2008, and that the annual compensation was $13,000.  (AF 7 (Cleaning Agreement, PS Form 7355, August 2005), 8; Declaration of M. Hamm (“Hamm Decl.”), ¶4).

            2.  The Cleaning Agreement included a Termination on Notice clause that provided, “Either the Postal Service or the supplier [Appellant] may terminate this contract on 30 days’ written notice to the other.”  (AF 7).

            3.  A note at the top of the Payment Authorization, near the printed caption, provided, “For annual payments under $10,000 to an individual . . . if agreement period is one year or more.”  (AF 8).

            4.  Respondent had in place guidelines (Cleaning Services Local Buying Agreement Guidelines (“Guidelines”)) that instructed postmasters about procedures for obtaining cleaning services for their post offices.  Under the Guidelines, postmasters could enter into local agreements with cleaning service providers for services up to $10,000 per year.  For cleaning services of $10,000 or more per year, postmasters were instructed to obtain the services by requisition through Respondent’s Category Management Center in Chicago, which, after a solicitation process, would enter into a contract with a cleaning services provider.  (AF 5, pp. 3-4; Declaration of F. B. Perry (“Perry Decl.”), ¶¶3-6).

            5.  In April 2007, a new officer-in-charge took over management of the Oak Hill Post Office (Declaration of T. Acord (“Acord Decl.”), ¶1).  In late 2007 or early 2008, a purchasing specialist from Respondent’s Appalachian District Finance Office (“DFO”), which was responsible for overseeing and administering contracts such as that in issue, advised him that the amount of the contract ($13,000) exceeded the post office’s cleaning budget; that the original officer-in-charge was not authorized to enter an agreement of that size; and that payment under the arrangement should be reduced or the agreement should be cancelled.  (Acord Decl., ¶¶2, 3; Perry Decl., ¶14).

            6.  Applying a formula in general use in the Postal Service, the purchasing specialist determined that the cleaning services necessary for the Oak Hill Post Office could be accomplished in fewer hours than contemplated by Appellant’s agreement and at an annual rate of $8,892 rather than the $13,000 per year being paid Appellant (Perry Decl., ¶9).

            7.  The new officer-in-charge told Appellant that Respondent would no longer pay her at the annual rate of $13,000.  He offered Appellant a new arrangement for cleaning the post office requiring fewer hours of work and at an annual rate of $8,892, but Appellant declined the offer.  (Acord Decl., ¶4).

            8.  On January 25, 2008, the new officer-in-charge and Appellant signed a document addressed to her that read, “This is to inform you that the Oak Hill Post Office is discontinuing its cleaning contract with you effective 30 days from the date of January 22, 2008.  Thank you for your cooperation.”  (AF 4; Acord Decl., ¶¶4, 5).

            9.  Appellant provided cleaning services through February 22, 2008, and was paid at the Cleaning Agreement rate (Acord Decl., ¶5; Perry Decl., ¶15).

            10.  In a written claim dated March 4, 2008, Appellant challenged the termination, and demanded reinstatement and back pay at the agreed rate beginning on February 22, 2008 (AF 3).

            11.  By letter dated March 28, 2008, the Appalachian DFO purchasing specialist denied Appellant’s claim, relying on the Cleaning Agreement’s termination on notice provision.  He signed the letter as “contracting officer” and concluded with standard final decision language advising Appellant of her right to appeal his decision.  (AF 2; Perry Decl., ¶17; see 39 C.F.R. §601.109 (g)(7)).

            12.  Appellant appealed the March 28, 2008 decision to the Board (AF 1; Perry Decl., ¶18).

DECISION

Motion to Dismiss in Part

            Respondent correctly points out that the Board does not have authority to reinstate Appellant’s contract.  See R&W Transp. Inc., PSBCA No. 5413, 09-2 BCA ¶ 34,197; David Sahagian, PSBCA No. 3543, 94-3 BCA ¶ 27,269.  Therefore, the portion of Appellant’s claim seeking reinstatement of her cleaning services contract is dismissed for failure to state a claim on which relief can be granted.  See Terry L. Bradley, PSBCA No. 5103, 05-2 BCA ¶ 32,996.  The remainder of her claim, seeking monetary damages, is the subject of the Motion for Summary Judgment.

Motion for Summary Judgment

            Respondent makes two arguments in support of its Motion for Summary Judgment.  First, it argues that the officer-in-charge’s agreement to obtain cleaning services at a rate in excess of his contractual authority did not create a binding contract between Respondent and Appellant.  Second, Respondent argues that if the officer-in-charge’s agreement bound Respondent, the successor officer-in-charge properly exercised Respondent’s right under the contract to terminate on notice, and Appellant is entitled to no recovery.  As we find disputed facts whose resolution will determine our jurisdiction to address the merits of Appellant’s claim, we do not reach the second argument.

            Respondent relies on Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380 (1947), for the proposition that Respondent’s officer-in-charge could not bind Respondent to any contract with Appellant in an amount that exceeded his actual authority, and that, consequently, Appellant is not entitled to relief under the unauthorized Cleaning Agreement.  See Federal Crop Ins., 332 U.S. at 384; Trauma Serv. Group v. United States, 104 F.3d 1321, 1325 (Fed. Cir. 1997); CACI, Inc. v. Stone, 990 F.2d 1233, 1236 (Fed. Cir. 1993).[1]

            Appellant argues that the officer-in-charge possessed implied actual authority, because obtaining cleaning services for the post office was an integral part of his duties as the officer-in-charge/temporary postmaster.  See H. Landau & Co. v. United States, 886 F.2d 322, 324 (Fed. Cir. 1989).  While obtaining cleaning services for the post office may well be a responsibility of the office manager, in this case the officer-in-charge, there is insufficient evidence in the record that would explain the full scope of a postmaster’s duties and how contracting for cleaning services falls within those duties.[2]  Whether execution of the Cleaning Agreement was an integral part of the officer-in-charge’s duties is a question of fact, see Reliable Disposal Co., ASBCA No. 40100, 91-2 BCA ¶ 23,895, at 119,717, and we conclude that the record at this stage is insufficiently developed to permit us to resolve this issue.  Accordingly, we deny Respondent's Motion for Summary Judgment on this ground.[3]

            Although not raised by the parties, another issue potentially affecting the Board’s jurisdiction is apparent and cannot be resolved on the present record.  The “final decision” denying Appellant’s claim (Finding 11), and on which this appeal is based (Finding 12), was signed by the Appalachian DFO official as “contracting officer.”  However, Respondent’s Guidelines reflect that contracting authority for cleaning services is vested either in the postmaster (for cleaning contracts less than $10,000 per year) or in the Chicago Category Management Center (for cleaning contracts $10,000 per year and higher) (Finding 4).[4]  There is nothing in the record to counter the inference that under Respondent’s cleaning service contracting process, the Appalachian DFO purchasing specialist was not an authorized contracting officer.

            Generally, issuance of a final decision by a contracting officer is a prerequisite to our jurisdiction.  See Paragon Energy Corp. v. United States, 645 F.2d 966, 971 (Ct. Cl. 1981).  The lack of an authorized final decision does not necessarily defeat the Board's jurisdiction as in appropriate circumstances we have found that a failure to issue a decision on a contractor's claim is a deemed denial which provides a basis for jurisdiction under the Contract Disputes Act.  See 41 U.S.C. §605 (c)(5); Lee Ann Wyskiver, PSBCA No. 3621, 94-3 BCA ¶ 27,118.  However, in light of the uncertain status of the “final decision” before us, we decline to resolve this issue without further development of the record.[5]

            Additionally, if Appellant knew of the officer-in-charge’s lack of authority to sign a cleaning services contract in excess of $10,000 per year, she would not be entitled to rely on the officer-in-charge’s alleged implied actual authority.  See Southwestern Security Servs., Inc., v. Department of Homeland Security, CBCA No. 1264, 09-2 BCA ¶ 34,139; Thai Hai, 02-2 BCA ¶ 31,971.  Whether the notation on the Payment Authorization that it was “[f]or annual payments under $10,000 to an individual . . . if agreement period is one year or more” provided such notice or whether she otherwise had such notice are areas not addressed by the parties and that need further development.

Conclusion

            Respondent’s Motion to Dismiss Appellant’s reinstatement claim is granted.  The Motion for Summary Judgment is denied.[6]

Norman D. Menegat
Administrative Judge
Board Member

I concur:                                                          I concur:
William A. Campbell                                     David I. Brochstein
Administrative Judge                                    Administrative Judge
Chairman                                                       Vice Chairman

[1] Although Respondent does not frame its summary judgment arguments as jurisdictional, the Motion for Summary Judgment, nevertheless, goes to our jurisdiction.  The Board’s jurisdiction extends to appeals by a “contractor” “relative to a contract made by” the Postal Service.  41 U.S.C. §§605 (a), 607 (c).  If we accept Respondent’s argument that it did not contract with Appellant because the officer-in-charge lacked contracting authority, we have no jurisdiction over Appellant’s claim.  See Chapman Children’s Trust II, PSBCA No. 4822, 03-2 BCA ¶ 32,371, aff’d, 110 Fed. Appx. 122 (Fed. Cir. 2004); Thai Hai, ASBCA No. 53375, 02-2 BCA ¶ 31,971, recon. denied, 03-1 BCA ¶ 32,130, aff’d, 82 Fed. Appx. 226 (Fed. Cir. 2003).  

[2] It is not disputed that the officer-in-charge had authority to enter a cleaning services contract of less than $10,000 per year (Finding 4).

[3] Respondent argues that contracting for cleaning services in excess of $10,000 per year could not be considered an integral part of the postmaster’s duties because its Guidelines assigned that task to the Category Management Center (Finding 4).  While this may be true had the limitations in the Guidelines been imposed by statute or published regulation, see Winter v. Cath-dr/Balti Joint Venture, 497 F.3d 1339, 1346 (Fed. Cir. 2007); Gemini Elecs., Inc. v. United States, 65 Fed. Cl. 55, 59, 69 (2005); Essen Mall Properties v. United States, 21 Cl. Ct. 430, 445 (1990), an unpublished, internal guideline might not have the same limiting effect.  See Texas Instruments Inc. v. United States, 922 F.2d 810, 815 (Fed. Cir. 1990); Howard Nettleton, PSBCA 3454, 94-3 BCA ¶ 27,038; A-1 Garbage Disposal & Trash Serv., ASBCA No. 30623, 89-1 BCA ¶ 21,323, at 107,525; Western Aviation Maint., Inc. v. GSA, GSBCA No. 14165, 00-2 BCA ¶ 31,123, n. 11.

[4] In his declaration filed in support of Respondent’s motions, the Appalachian DFO purchasing specialist confirmed that the Guidelines accurately describe the process to be followed for obtaining post office cleaning services.  Moreover, he identified his duties at the time as overseeing and administering cleaning services contracts but did not state that he was a contracting officer. (Perry Decl., ¶¶1, 3-5).

[5] If the Appalachian DFO official was a contracting officer, we may then consider whether by not repudiating the allegedly unauthorized contract and instead invoking the Cleaning Agreement’s termination on notice provision as grounds for ending Appellant’s performance and denying her claim Respondent ratified and adopted the officer-in-charge’s unauthorized contract.  See Mil-Pak Co., GSBCA No. 5849, 83-1 BCA ¶ 16,482; Norwood Precision Products, ASBCA No. 24083, 80-1 BCA ¶ 14,405.  This is another area requiring further factual development.

[6] We do not reach the issue whether Respondent properly exercised its authority to terminate on 30-days’ notice (Finding 3).