PSBCA No. 6485


October 28, 2014

OSWALD FERRO v. UNITED STATES POSTAL SERVICE

Docket No. PSBCA 6485

APPEARANCE FOR APPELLANT:

Jerold Wolin, Esq.
Wolin & Wolin

APPEARANCE FOR RESPONDENT:
Richard Y. Rho, Esq.
United States Postal Service Law Department

OPINION OF THE BOARD

Appellant, Oswald Ferro, provided mail transportation services to Respondent, United States Postal Service. Appellant claims that he is entitled to $848,746.92 more than the contract provided. The parties submitted written evidence in lieu of an oral hearing. We deny the appeal, and rule in favor of the Postal Service.

FINDINGS OF FACT

  1. Mr. Ferro provided mail transportation services under Contract No. HCR 11229 (the Contract) to the Postal Service from July 1, 2001 to September 27, 2010 (Appeal File (AF) 16, 18).
  2. The initial Contract term began July 1, 2001 and ended June 30, 2005 (AF 18 at 206). The Contract was renewed from July 1, 2005 through June 30, 2009 (AF 18 at 205-08), and again starting July 1, 2009 (AF 9 at 22-24).
  3. The Contract originally required Mr. Ferro to use two tractors and two trailers, and paid him $372,986.79 annually (AF 18 at 207, 213).
  4. Bilateral Amendment 1, effective May 13, 2006, required Mr. Ferro to use three tractors and three trailers, and increased the annual contract rate to $461,888.57. The amendment also removed a stop from two of the routes and reduced the total contract mileage. (AF 15 at 159-62, 171; Martinez Decl. at ¶¶ 5-7, 10-11; Pichl Decl. at ¶¶ 3-4, 8).
  5. Bilateral Amendment 2, effective July 22, 2006, reduced the annual contract rate to $375,124.19 (AF 14 at 149). The downward adjustment was based substantially on a reduction in highway tolls (compare AF 14 at 150, with AF 14 at 160; App. Supp. AF 3 at 50-51).
  6. Bilateral Amendment 3, effective April 1, 2007, increased the annual rate to $381,227.48 to apply a new wage rate determination (AF 13 at 114).
  7. Bilateral Amendment 4, effective April 1, 2008, increased the annual rate to $439,842.70 due to an increase in the price of fuel (AF 12 at 104-05; compare AF 12 at 105, Line 6 with AF 14 at 150, Line 6).
  8. On September 27, 2010, the Postal Service terminated the Contract (AF 7). Mr. Ferro does not challenge the contract termination.
  9. Mr. Ferro submitted a certified claim dated June 29, 2011, to the contracting officer for final decision. The cover letter to the claim provided “we submit, for your review and consideration, the enclosed Claim for Additional Services rendered by [Oswald Ferro].” The claim sought $848,746.92 which Mr. Ferro alleged to be the costs of running the third tractor and third trailer. (AF 3 at 8).
  10. On October 25, 2012, the contracting officer issued a final decision denying the claim.1 (AF 2 at 2).
  11. On November 2, 2012, Appellant filed a timely appeal of the contracting officer’s final decision.

DECISION

Any price changes were accomplished through bilateral contract amendments, including Amendment 1 that added the third tractor and trailer (Findings 4-7). Appellant then filed a claim seeking to recover those same costs (Finding 9). “Generally, modifications to government contracts constitute an accord and satisfaction of the services subject to the agreements and bar all claims of a contractor for such services unless they are specifically reserved or excepted.” Stephens Assocs., PSBCA No. 970, 83-1 BCA ¶ 16,233 (contractor failed to show that its claim included any services that were not covered by prior modification); see also Valcon II, Inc. v. United States, 26 Cl. Ct. 393, 397 (1992)(“an executed bilateral contract modification that contains no reservation of rights constitutes an accord and satisfaction.”). As no claim was reserved or excepted, accord and satisfaction generally precludes further recovery by Mr. Ferro. See Brock & Blevins Co. v. United States, 343 F.2d 951, 954 (Ct. Cl. 1965).

Appellant argues that notwithstanding his agreement to bilateral Amendment 1 (Finding 4) adding a third tractor and third trailer and the execution of three additional bilateral amendments (without reservation) which included the third tractor and third trailer (Findings 5-7), he received inadequate or no additional compensation. He asserts that the annual compensation rate was lowered by the various contract amendments when figured on a per truck basis. The four bilateral contract amendments, Appellant asserts, amount to an unconscionable bargain.

An unconscionable contract is one “which no man in his senses, not under a delusion, would make, on the one hand and which no fair and honest man would accept on the other.” Glopak Corp. v. United States, 851 F.2d 334, 338 (Fed. Cir. 1988) (quoting Hume v. United States, 21 Ct. Cl. 328, 330 (1886), aff’d, 132 U.S. 406 (1889)). No evidence in the record suggests that Mr. Ferro was forced or coerced into entering the contract amendments in which he agreed to the three trucks and three trailers and other changes. See Charles and Lilly Hendlish, PSBCA No. 3661, 96-1 BCA ¶ 28,131. The Contract, as amended, was priced on a fixed price basis, not a per truck basis. Further, price adjustments were based on removal of a stop along two routes, reduction of miles, and a reduction in tolls (Findings 3-7). The facts do not support a determination that the bargain was unconscionable.

CONCLUSION

The appeal is denied.

Peter F. Pontzer
Administrative Judge
Board Member

I concur:
William A. Campbell
Administrative Judge
Chairman

I concur:
Gary E. Shapiro
Administrative Judge
Vice Chairman

  

1 The parties have not explained the apparent sixteen-month delay between submission of the claim and issuance of the final decision.