FRANKLIN WILBORN

PSBCA Nos. 6260 and 6314

APPEARANCE FOR APPELLANT
Franklin Wilborn

APPEARANCE FOR RESPONDENT
Melissa Mortimer, Esq.

OPINION OF THE BOARD ON MOTION TO DISMISS,
OR IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT

            Appellant, Franklin Wilborn, held a mail transportation contract with Respondent, United States Postal Service.  Before expiration of the contract, the parties attempted to negotiate a renewal but did not agree on a price.  Respondent did not renew the contract, and Appellant appealed, contending the decision not to renew his contract was made in bad faith.  The contracting officer also denied Appellant’s separate claim for monetary damages allegedly resulting from the failure to renew, and Appellant appealed that denial.

            Respondent filed a Motion to Dismiss, or in the Alternative, for Summary Judgment, contending (1) that the appeals should be dismissed for lack of jurisdiction, or alternatively, (2) that it is entitled to judgment as a matter of law based on undisputed facts established in the record.  It relied on documents in the appeal file and supported its Motion with a declaration of the contracting officer and additional documents.  Appellant filed an opposition, and included additional documents, but did not submit declarations.  Both parties conducted discovery, and the time permitted for discovery has expired.

            For purposes of deciding the Motion, the following facts have been established as undisputed.

UNDISPUTED FACTS

            1.  Appellant held Contract HCR 606PG for transportation of mail between the Chicago O’Hare Airport Mail Facility and a number of neighboring post offices.  The term of the contract was from November 28, 2005, to June 30, 2009, at an annual rate, as amended in 2008, of $71,269.73.  (Appeal File, Tabs (“AF”) 7, 8).

            2.  The Renewal Clause incorporated by reference into the contract provided, “This contract may be renewed by mutual agreement of the parties.”  (AF 8, Contract Clause 2.3.4.a (9), p. 83; Respondent’s Motion (“Motion”), Exhibit 1)).

            3.  On March 16, 2009, the contracting officer provided Appellant with proposed renewal documents and advised him that due to the Postal Service’s serious financial challenges Respondent would be looking for cost savings on the renewal.  The contracting officer wrote,

If you are unable to accept a reduction to your current contract rate, a non-renewal letter will be issued.  Shortly thereafter, a determination will be made as to whether or not the non-renewed service will be solicited for, or consolidated into existing service.  If the decision is made to solicit, as the incumbent, you will be notified and welcome to submit an offer for that service.

The contracting officer sent the same letter to all mail transportation contractors within his area whose contracts were expiring in 2009.  (Saxton Declaration (“Saxton Decl.”), ¶3 and Exhibit A; Appellant’s Opposition, Exhibit 5).[1]

            4.  The contracting officer also sent to all suppliers with expiring contracts a notice that he would not be available to negotiate renewal contracts personally but that a contract specialist would conduct the negotiations.  He noted that if the contract specialist and the supplier did not reach agreement on renewal within a range of contract prices pre-approved by the contracting officer, the specialist would bring the supplier’s best and final offer to the contracting officer, who would accept or reject it within five days.  He wrote, “A rejection of this offer will allow you the opportunity to speak to me directly prior to the issuance of a non–renewal decision.”  (Motion, Exhibit 6).

            5.  Based on prices Respondent was paying on comparable routes in the area, the contracting officer believed an annual contract rate lower than that of Appellant’s expiring contract was warranted for the renewal period.  The contracting officer approved a pre-negotiation range of $67,706.24 to $70,000 for the renewal contract price; he determined not to enter a renewal contract above $70,000 per year.[2]  (AF 6; Saxton Decl., ¶4).

            6.  On May 14, 2009, a contract specialist called Appellant to discuss renewal.[3]  The specialist offered a renewal price of $64,000 per year, exclusive of fuel costs.  (Motion, Exhibit 5 (Appellant’s Answers to Interrogatories, ¶5); Appellant’s Opposition, Exhibit 1).

            7.  Appellant offered to perform the renewal contract for the same price as the expiring contract, $71,269.73, but he proposed that he be allowed an increase in fuel usage from 2,534 gallons per year under the expiring contract to 3,851 gallons per year under the renewal contract.  This increase, if approved, would mean that Respondent could be paying for 1,317 more gallons of fuel per year under the renewal.  No further offers were made by either party, and both considered Appellant’s offer to be his final offer.  (Appellant’s Opposition, Exhibit 1).

            8.  By letter dated May 14, 2009, without first discussing the negotiations with Appellant, the contracting officer advised Appellant that he rejected Appellant’s “Last and Final Offer” of $71,269.73 with 3,851 gallons of fuel because he considered it to be excessive.  He advised that Appellant could appeal the nonrenewal decision to the Manager of Transportation Contracts in Postal Service Headquarters.  (AF 5; Saxton Decl., ¶5; Appellant’s Opposition, Exhibit 10).  Financial reasons alone—attempting to achieve cost savings for Respondent—drove the contracting officer’s decision not to renew the contract (Saxton Decl., ¶¶5, 8).

            9.  In a letter addressed to the Manager of Transportation Contracts, Appellant appealed the nonrenewal of his contract.  He sent a copy of that letter to the Board, and the Board docketed it as PSBCA No. 6260.  (AF 3).

            10.  While the appeal to the Manager of Transportation Contracts was pending, Respondent offered to reopen negotiations, but Appellant refused.  Thereafter, the Manager of Transportation Contracts upheld the contracting officer’s decision not to renew.  (Saxton Decl., ¶6; AF 1, 9 (p. 132)).

            11.  On May 29, 2009, Respondent solicited offers for emergency replacement service on the route from 11 potential offerors, including Appellant, for the period July 1, 2009, through December 25, 2009.  Respondent received 8 offers, and awarded the contract to the lowest offeror at an annual rate of $72,443.10.  Appellant was the second low offeror at $82,569.33.[4]  (Saxton Decl., ¶7; Motion, Exhibits 3, 4; AF 3 (p. 5), 10, 11).

            12.  On January 12, 2010, Appellant submitted a $67,771.59 claim to the contracting officer, contending he suffered damages in that amount due to the contracting officer’s failure to renew his contract (Motion, Exhibit 6; Appellant’s Opposition, Exhibit 10).

            13.  By final decision dated March 2, 2010, the contracting officer denied Appellant’s monetary claim (Motion, Exhibit 8), and Appellant’s appeal of that denial (Motion, Exhibit 9) was docketed as PSBCA No. 6314 (Motion, Exhibit 10).  The appeals were consolidated (Order, March 26, 2010).

DECISION

Motion to Dismiss

            Respondent argues that Appellant’s appeals are in the nature of procurement protests of Respondent’s failure to award him the renewal contract and as such, are subject to dismissal as beyond the Board’s jurisdiction.

            We grant dismissal of PSBCA No. 6260, although not on the grounds raised by Respondent.  Appellant sent the Board a copy of the nonrenewal appeal he filed with the Manager of Transportation Contracts, and the Board docketed it as an appeal (Finding 9).  However, the dispute raised in PSBCA No. 6260 had neither been the subject of a claim filed nor a contracting officer’s final decision rendered, both jurisdictional prerequisites to the Board’s consideration of the matter.  See Paragon Energy Corp. v. United States, 645 F.2d 966 (Ct. Cl. 1981); Mr. and Mrs. Edward R. Ester, PSBCA No. 1559, 87-2 BCA ¶ 19,719.[5]  Accordingly, PSBCA No. 6260 is subject to dismissal for lack of jurisdiction.[6]

            PSBCA No. 6314, however, is on different footing.  Appellant submitted a claim (Finding 12) that was denied in a contracting officer’s final decision (Finding 13), and applying Franklin Wilborn, PSBCA No. 6260, 09-2 BCA ¶ 34,251, we conclude that Appellant’s demand for monetary damages states a cause of action under an existing contract.[7]

            Insofar as the Motion to Dismiss addresses PSBCA No. 6314, it is denied.

Motion for Summary Judgment

            Respondent argues that it is entitled to judgment as a matter of law based on the undisputed facts in the record because the contract granted it discretion not to renew.  We consider the motion as it applies to PSBCA No. 6314, Appellant’s monetary claim for damages based on Respondent’s failure to renew his contract.  Appellant argues that Respondent’s insistence that he offer an annual rate lower than that of the expiring contract and Respondent’s alleged failure to demand such concessions from other contractors demonstrate bad faith.  Appellant contends that he is entitled to a hearing to demonstrate that Respondent discriminated against him based on his race and acted in bad faith, thus entitling him to damages.

            The purpose of summary judgment is to ascertain whether there are material facts in dispute that require a hearing for their resolution.  If there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law, granting summary judgment is appropriate to avoid an unnecessary trial.  Vivid Tech., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 806 (Fed. Cir. 1999).  Respondent, as the moving party, has the initial burden of stating the basis for its motion and “identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.”  Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); see 39 C.F.R. §955.6 (c) (1).

            Through its Statement of Uncontested Facts submitted with the Motion, Respondent has met its burden by citation to documents in the appeal file, documents submitted with its Motion, and the contracting officer’s declaration.  These demonstrate that the contract did not obligate Respondent to renew (Finding 2).  Thus, the burden shifts to Appellant to set forth specific facts showing the existence of an evidentiary conflict on the record, resulting in a genuine issue of material fact for trial.  See Pure Gold, Inc. v. Syntex (U.S.A.), Inc., 739 F.2d 624, 626-27 (Fed. Cir. 1984); Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390-91 (Fed. Cir. 1987).

            In his opposition to Respondent’s Motion, Appellant did not present evidence of facts in conflict with Respondent’s Statement of Uncontested Facts.  He submitted a lengthy narrative of his arguments and attached documents, some with handwritten explanations on them, but he did not identify facts in dispute and material to the resolution of his claims.[8] 

            Nevertheless, we have carefully reviewed the record, including Appellant’s unsworn submissions, in search of any evidentiary conflicts that are material to his assertions of bad faith conduct and which require a hearing for their resolution.  Where, as here, there has been no promise or commitment by Respondent that it would renew the contract,[9] the contracting officer’s decision not to renew does not entitle Appellant to contractual relief absent a showing that the nonrenewal resulted from Respondent’s bad faith or clear abuse of discretion.  See Nova Express, PSBCA Nos. 5102, 5204, and 5206, 08-1 BCA ¶ 33,763; James Hovanec, PSBCA No. 4767, 04-2 BCA ¶ 32,805, at 162,262; Plum Run, Inc., ASBCA Nos. 46091, 49203, 49207, 97-2 BCA ¶ 29,193, at 145,230.

            To show bad faith, Appellant must show by clear and convincing evidence that Respondent's employees had some specific intent to harm him.  See Am-Pro Protective Agency, Inc. v. United States, 281 F.3d 1234, 1240 (Fed. Cir. 2002); IMS Engineers - Architects, P.C., ASBCA No. 53471, 06-1 BCA ¶ 33,231, at 164,674, recon. granted in part on other grounds and otherwise denied, 07-1 BCA ¶ 33,467.  He must show that Respondent's officials were “motivated alone by malice,” that they engaged in a “proven conspiracy to get rid of” Appellant or employed “designedly oppressive” measures.  See Am-Pro Protective Agency, Inc., 281 F.3d at 1240.

            Appellant’s primary basis for alleging bad faith on Respondent’s part is its demand that he reduce his price for the renewal contract and the contract specialist’s opening offer of what Appellant considered an unfairly low price.  Although Appellant considered Respondent’s price reduction demand to be unfair and financially unacceptable, the demand did not demonstrate that Respondent acted in bad faith or breached its implied duty of fair dealing under Appellant's expiring contract.  See Gary W. Noble, PSBCA No. 4094, 99-2 BCA ¶ 30,413.  Respondent had no contractual duty, implied or express, to

make concessions to Appellant or to award Appellant exactly what he requests.  That Appellant finds the contracting officer's offer unacceptable or that his costs of operation exceed what the contracting officer will pay does not mean that the contracting officer failed to act in good faith.

Jack Swedberg, PSBCA No. 3876, 96-2 BCA ¶ 28,337.[10]  Respondent’s demand that Appellant lower his price for the renewal and its refusal to renew when Appellant balked do not evidence bad faith.

            Appellant alleged that Respondent’s refusal to renew his contract was racially motivated, but he offered only his unsupported opinion regarding racial discrimination as a factor in the nonrenewal.  As discussed above, to avoid summary judgment he must establish contested issues of fact by pointing out specific factual contradictions that make a hearing necessary.  The contracting officer declared under penalty of perjury that financial reasons alone led to his decision not to renew Appellant’s contract (Finding 8), and Appellant has offered only conclusory statements in support of his claim of racial discrimination.  He cites no incidents, comments or conduct by Respondent’s officials, or other facts from which a trier of fact could find that racial prejudice was behind the nonrenewal of his contract.

            In interrogatories to Appellant, Respondent specifically asked for all facts that support his assertion of racial animus.  In response, Appellant identified the contracting officer’s failure to negotiate with him personally and Respondent’s demand that he reduce his price.  Motion, Exhibit 5.  He asserted that the contract specialist yelled at him during the negotiations and accused Appellant of being unable to manage his fuel usage under the fuel management program.  At most, and finding all inferences in his favor, United States v. Diebold, Inc., 369 U.S. 654, 655 (1962); Vienna/Vienna, PSBCA Nos. 2505, 2816, 92–3 BCA ¶ 25,042, Appellant has shown that there was some friction between him and the contract specialist before and during the negotiations.[11]  That the contracting officer failed to discuss the renewal with Appellant before issuing his nonrenewal decision does not tend to show racial animus or establish an evidentiary conflict in that regard.[12]  Appellant also alleges that other contractors were not asked to reduce their prices, but he has only presented unsworn, unsupported and non-specific assertions to that effect.  Conclusory statements and bare assertions of discrimination are not sufficient to create a genuine issue of material fact.  See Pure Gold, Inc. v. Syntex (U.S.A.), Inc., 739 F.2d at 626-27.

            Appellant has shown no facts in dispute from which a trier of fact could find that the contract specialist, the contracting officer, or any other postal official was motivated by racial animus, malice or a specific intent to harm Appellant.  Appellant took advantage of his opportunity to conduct discovery of Respondent, but he has, nevertheless, identified no genuine issues of material fact regarding bad faith whose resolution requires a hearing.[13]

            Nor are there material facts in dispute bearing on whether Respondent abused its discretion in not renewing Appellant’s contract.  The contract authorized renewal by mutual agreement of the parties and placed no restrictions on Respondent’s freedom to decline to renew (Finding 2).  Under these circumstances, the contracting officer had wide discretion in deciding whether to renew.  See Government Sys. Advisors, Inc. v. United States, 847 F.2d 811, 813 (Fed. Cir. 1988); Edward H. Foran, ASBCA Nos. 51596, et al., 01-1 BCA ¶ 31,323, at 154,724-725.  Moreover, Respondent has demonstrated reasonable grounds for asking Appellant to reduce his price:  Respondent’s desire to reduce its costs and the contracting officer’s conclusion that Appellant’s contract was overpriced.

            Appellant offers other arguments to show that the nonrenewal of his contract was improper:  (1) that his price offered for the renewal was the most advantageous to Respondent; (2) that Respondent’s comparisons to the prices of other routes to determine the reasonableness of his contract price were flawed; (3) that the contractor who replaced Appellant is being permitted to use a vehicle that does not meet the contract requirements; (4) that other routes comparable to his are allowed higher fuel usage than he was; and (5) that Respondent’s financial condition in 2009 was no worse than when his contract price was established in 2008, undercutting its justification for seeking a price reduction at renewal.  As discussed above, Appellant has not presented facts to support his assertions.

            Additionally, in resolving a motion for summary judgment, it is only disputes over facts that might affect the outcome of the appeal that would preclude entry of summary judgment.  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-249 (1986).  None of the above alleged facts need to be determined for us to resolve this motion for summary judgment.  See Comptech Corp., ASBCA No. 55526, 08-2 BCA ¶ 33,982; Paul F. Senteney, AGBCA No. 92-131-1, 92-3 BCA ¶ 25,068.  Where, as here, Respondent had broad discretion in determining whether to renew Appellant’s contract, we will not second guess Respondent’s business judgment.  See Fax-Photo-Shipping Etc., PSBCA Nos. 3916, 3970, 98-2 BCA ¶ 29,998; TMI Mgt. Sys., Inc. v. United States, 78 Fed. Cl. 445, 449 (2007).  Any factual dispute regarding the wisdom of Respondent’s nonrenewal or of the award and administration of the successor contract or any other contract would not be material to the decision on Respondent’s Motion.  Appellant has failed to offer evidence sufficient to create a genuine issue of material fact regarding whether Respondent acted in bad faith or whether the contracting officer abused his discretion, and these are the only matters that need to be addressed for purposes of resolving this Motion.[14]

            Respondent’s Motion for Summary Judgment is granted as to PSBCA No. 6314.

Conclusion

            The appeal of PSBCA No. 6260 is dismissed for lack of jurisdiction.  The appeal of PSBCA No. 6314 is denied.

Norman D. Menegat
Administrative Judge
Board Member

I concur

William A. Campbell
Administrative Judge
Chairman

David I. Brochstein
Administrative Judge
Vice Chairman

[1] Exhibit A to the Saxton Declaration consisted of pages 1 and 3 of the letter.  Exhibit 5 to Appellant’s Opposition included the second page, on which the quoted language appears.

[2] Appellant participated in Respondent’s fuel management program whereby Respondent paid directly for the fuel used in performing the contract.  Accordingly, the negotiating range was determined without regard to fuel cost as was Appellant’s expiring contract rate.  (AF 8, p. 103).

[3] The specialist who contacted Appellant was not the contract specialist named in the contracting officer’s earlier letter to Appellant (Finding 4).

[4] The offers for the emergency contract were solicited on a fuel-included basis, so the prices offered included the cost for the contractor to provide the fuel.  Figured on this basis, Appellant’s price for the expiring contract would have been $76,945.89.  (Saxton Decl., ¶7; AF 10).

[5] Respondent did not raise them, and the Board did not consider these jurisdictional infirmities in denying Respondent’s earlier motion to dismiss PSBCA No. 6260.  Franklin Wilborn, PSBCA No. 6260, 09-2 BCA ¶ 34,251.

[6] Moreover, the relief sought in an appeal to the Manager of Transportation Contracts is a reversal of the decision not to renew, and granting such relief, i.e. ordering the contracting officer to renew Appellant’s contract, is relief of an equitable nature that is beyond the authority of the Board to grant.

It is also well established that the Board has no authority to order Respondent to renew a contract.  See James A. Crosby, PSBCA No. 3673, 95-2 BCA ¶ 27,754; Marvin R. Iseminger, PSBCA No. 2537, 90-1 BCA ¶ 22,339; Erwin Melvie, PSBCA No. 1744, 87-3 BCA ¶ 20,158. Insofar as Appellant seeks such relief, its appeal is subject to dismissal.

Tab Distributors, Inc., PSBCA No. 4134, 99-1 BCA ¶ 30,110, at 148,983. 

[7] Respondent relies on Frank Baiamonte, PSBCA No. 5332, 08-1 BCA ¶ 33,796, for its argument that these appeals should be dismissed because they are procurement protests, beyond the jurisdiction of the Board.  However, the appellant in Baiamonte complained that the contracting officer’s denial of his access to the mail because of his conduct while performing the appealed contract prevented him from being considered for award of a contract at a different post office.  That case is inapposite because in Baiamonte, the appellant sought no relief under an existing contract with Respondent, and consequently, his appeal regarding failure to award him a separate contract was subject to dismissal as being in the nature of a protest.  Here, in PSBCA No. 6314, Appellant seeks monetary damages under his then-existing contract.

[8] In a July 19, 2010 Order affording Appellant an opportunity to respond to Respondent’s Motion, Appellant was advised of the type of opposition required:

In its Motion for Summary Judgment, Respondent contends that there are no disputed facts that need to be resolved through an oral hearing.  It has identified in its Statement of Uncontested Facts those facts it considers sufficient (material) for the Board to reach a decision in its favor without holding a hearing.  The Board’s rules describe the requirements for an opposition to a motion for summary judgment, including the requirement that Appellant identify any disagreements he has with Respondent’s Statement of Uncontested Facts.  See 39 C.F.R. §955.6 (c).  Appellant’s response should identify the specific paragraph numbers of those listed facts as to which he believes there is a genuine evidentiary conflict that should be resolved through a hearing.  He should support his “opposition with references to affidavits, declarations and/or documents that demonstrate the existence of a genuine dispute.”  39 C.F.R. §955.6 (c) (3). 

[9] Appellant has alleged that the contracting officer breached his promise to discuss renewal directly with him before deciding not to renew the contract (Finding 4), but he does not allege and the record does not reflect that Respondent made any commitment to renew the contract.

[10] Additionally, while Appellant’s appeal of the nonrenewal decision to higher contracting authority was pending, Respondent offered to reopen negotiations, and Appellant declined (Finding 9).

[11] Appellant sees malice in the specialist’s opening offer of $64,000, given that Respondent’s internal, pre-negotiation recommendation was to reach a price between $67,706.24 and $70,000 (Finding 5).  Opening the negotiations with an offer below Respondent’s target renewal price range does not suggest bad faith.

[12] Appellant notes that the contract specialist named in the contracting officer’s pre-renewal letter (Finding 4) was not the specialist who discussed renewal with him (Finding 6).  He does not identify the significance he attaches to this change in the context of alleged bad faith, and we see none.

[13] The contract specialist with whom Appellant negotiated no longer works for Respondent, and Appellant complains that Respondent prevented him from obtaining evidence from the specialist.  This has not been shown, and before Respondent filed this Motion, the Board advised Appellant of its rules that would permit him to request a subpoena to obtain the contract specialist’s testimony.  See Order of June 9, 2010.  The Board has received no request for a subpoena.  In any event, for purposes of resolving this Motion, we have accepted Appellant’s version of the negotiations even though he did not offer his own sworn statement or declaration regarding their conduct.

[14] The facts that are in the record, however, support Respondent’s position; replacement service, on which Appellant bid, was obtained at a price lower than Appellant offered for renewal and lower than the price of his expiring contract (Findings 1, 7, 11).