May 9, 2014

Appeal of
SHAWN G. LOGAN

PSBCA No. 6507

Under Contract No. HCR 388AO

APPEARANCE FOR APPELLANT:
Shawn G. Logan
Hamilton, AL

APPEARANCE FOR RESPONDENT:
Peter J. McNulty, Esq.
Office of the General Counsel
Washington, DC

OPINION OF THE BOARD ON MOTION TO DISMISS

Respondent, United States Postal Service, moves to dismiss this case filed by Appellant, Shawn G. Logan, without prejudice for lack of jurisdiction. Alternatively it moves to dismiss this case with prejudice for failure to state a cause of action on which relief can be granted. We deny the jurisdictional motion and grant the motion to dismiss for failure to state a cause of action.

FINDINGS OF FACT

1. The Postal Service and Mr. Logan were parties to HCR 388AO, a transportation contract with a term of April 1, 2011 through June 30, 2015 (Appeal File (AF) 1).

2. Clause 2.3.3 of the contract’s terms and conditions provided:
The clauses below captioned “Termination with Notice” and “Termination for the Postal Service’s Convenience” are in the alternative, so that only one of them is applicable to this contract, and not the other. The designation of which of the two clauses applies will be established prior to renewal or award. If no such designation has been made, the clause captioned “Termination for the Postal Service’s Convenience” will be assumed to be the designated clause.
The text of both a termination with notice clause, at section 2.3.3a, and a termination for convenience clause, at section 2.3.3b followed. The termination with notice clause provided: “The contracting officer or the supplier, on 60 days written notice, may terminate this contract or the right to perform under it, in whole or in part, without cost to either party.” (AF 1 at 61)

3. Section B.1.3 of the contract provided “Section 2.3.3a of the terms and conditions, Termination with Notice, is incorporated in this contract; Section 2.3.3b, Termination for the Postal Service’s [C]onvenience, does not apply.” (AF 1 at 33).

4. Section 2.3.6 of the contract, Claims and Disputes, defined a claim for purposes of the Contract Disputes Act, 41 U.S.C. §§ 7101-09 (CDA), in relevant part:
“Claim,” as used in this clause, means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract. . . . A voucher, invoice, or other routine request for payment that is not in dispute when submitted is not a claim under the Act. The submission may be converted to a claim under the Act by complying with the submission . . . requirements of this clause, if it is disputed either as to liability or amount is not acted upon in a reasonable time.

(AF 1 at 62)

5. On February 8, 2013, Respondent’s contracting officer (terminating contracting officer or TCO), issued a termination notice effective April 10, 2013. Although the subject line referred to a termination for convenience, the text of the notice recited that the Postal Service was terminating the contract with notice. The notice identified itself as a contracting officer’s final decision and recited appeal rights. (AF 3).

6. On February 13, 2013, Mr. Logan sent an email to a different contracting officer (administrative contracting officer or ACO) asking whether he was entitled to a monetary settlement for equipment he purchased for the contract (AF 4).

7. The ACO replied via email the same day: “The contract terms and conditions section 2.3.3b Termination for the Postal Service’s Convenience allow the supplier to submit a termination claim within 180 days of the effective date of the termination. Any supplier claim for termination costs must be properly documented; the supplier should also provide a narrative explanation of the itemized request.” (AF 4).

8. On March 11, 2013, Mr. Logan sent a letter to the TCO: “This is to officially notify you that I am requesting severance pay. I signed this contract in good faith 2 years ago. I have given the USPS good service for many years. I need enough compensation to cover my equipment. The equipment cost for the remaining 2 years is $11,266.70. I am also asking for $1,500.00 for CPA and other fees necessary to end the llc. I think this is very fair since the remaining contract is more than $43,000.00.” (AF 5).

9. On April 15, 2013, the ACO responded, in relevant part:
The Southern TCMT is in receipt of your claim for $11,266.70 for the termination of HCR 388AO plus an additional $1500.00 for CPA and other fees to end the LLC.

Prior to terminating your route this office took great care to research, and follow the termination clause associated with your contract 388AO. Our research showed that your route was renewed with the Termination on Notice clause 2.3.3.a, as stated in the Terms and Conditions Issue 9. 2.3.3.a reads as follows:

2.3.3a Termination with Notice

The contracting officer or the supplier, on 60 days written notice, may terminate this contract or the right to perform under it, in whole or in part, without cost to either party.

. . .

It is the position of this office that we followed the terms of the contract in terminating the route on notice, and therefore your claim for $11,266.70 for the termination of HCR 388AO plus an additional $1500.00 for CPA and other fees to end the LLC is denied.

This letter signed by the ACO was identified as a contracting officer’s final decision and recited appeal rights. (AF 6) (emphasis in original).

10. On May 6, 2013, Mr. Logan sent a letter to the Postal Service: “This letter is to formally appeal the attached decision. Please see all attached documentation for contract #388AO.” (AF 7). The appeal file did not identify which “attached decision” or “attached documentation” was included.

11. On May 16, 2013, the TCO forwarded Mr. Logan’s appeal letter to the Board, stating that Mr. Logan was “appealing the contracting officer’s February 8, 2013 termination for convenience.” The TCO’s transmission to the Board stated that a copy of the final decision terminating service was enclosed. Copies of both letters purporting to be final decisions were attached.

12. When Mr. Logan, appearing unrepresented, failed to file a complaint, the Board issued an Order (July 18, 2013) and then an Order to Show Cause (August 22, 2013) directing him to do so. Mr. Logan responded with an undated two-sentence submission: “This complaint was sent to you in the month of May. What else do you need?” Mr. Logan attached his March 11, 2013 letter referenced at Finding 8, and his May 6, 2013 letter referenced at Finding 10. Mr. Logan has not filed anything else in this case.

13. On August 28, 2013, the Board on its own initiative issued an Order designating Mr. Logan’s March 11, 2013 letter as his complaint.

14. On October 17, 2013, the Postal Service filed a motion to dismiss in lieu of an answer. The motion to dismiss requested dismissal with prejudice for failure to state a cause of action on which relief could be granted. The Board allowed Mr. Logan opportunities to respond (see October 24, 2013 Order; December 4, 2013 Order ), but he did not do so.

15. On December 4, 2013, the Board on its own initiative issued an Order addressing our jurisdiction. The Order directed the Postal Service to indicate its position concerning any jurisdictional issues raised, and to address the applicability, if any, of Federal Circuit precedent identified in the Order.

16. The Postal Service responded on January 17, 2014 by moving to dismiss the case without prejudice for lack of jurisdiction. Mr. Logan was provided an opportunity to respond (see January 27, 2014 Order), but he did not do so. The Board issued another Order on March 27, 2014, again seeking Mr. Logan’s input before deciding these motions. He did not respond.

DECISION

Jurisdiction

At any time, the Board may raise the issue of our jurisdiction to proceed with any case before us. See 39 C.F.R. § 955.6(a); Barnett v. Brown, 83 F.3d 1380, 1383 (Fed. Cir. 1996) (“well-established judicial doctrine that any statutory tribunal must ensure that it has jurisdiction over each case before adjudicating the merits, that a potential jurisdictional defect may be raised by the court or tribunal, sua sponte or by any party, at any stage in the proceedings, and, once apparent, must be adjudicated”)(emphasis in original). Although we raised the issue (Finding 15), we conclude that we possess jurisdiction concerning the monetary dispute before us.

Our jurisdiction in a case of this type requires that a contractor submit a monetary claim cognizable under the contract and CDA to the Postal Service’s contracting officer, and file a timely appeal from a contracting officer's decision thereon. See 41 U.S.C. §§7103-04; Allen Jerry Oliver, PSBCA No. 6500, 13-1 BCA ¶ 35,348. We examine Mr. Logan’s March 11, 2013 letter (Finding 8) to determine whether, under the totality of the circumstances presented, the prerequisite for our jurisdiction of a viable claim has been satisfied. See Parsons Global Serv., Inc. v. McHugh, 677 F.3d 1166, 1170 (Fed. Cir. 2012); 41 U.S.C. § 7103.

The ACO invited Mr. Logan “to submit a termination claim” (Finding 7). Mr. Logan did just that – he asserted as a matter of right from a contracting officer (“[t]his is to officially notify you that I am requesting severance pay”) sum certain monetary amounts ($11,266.70, $1,500) resulting from Respondent’s termination (“equipment costs for the remaining 2 years”, “CPA and other fees necessary to end the llc”) which he believed were due him arising under or relating to the contract (“I need enough compensation to cover my equipment”). (Finding 8).

Under the applicable definition of a claim (Finding 4), a contractor’s monetary request may be routine or nonroutine. See Reflectone, Inc. v. Dalton, 60 F.3d 1572, 1575-76 (Fed. Cir. 1995)(en banc). While a routine request for payment already must be in dispute when submitted to a contracting officer to constitute a claim, a nonroutine request need not. See Finding 4; see also, James M. Ellett Constr. Co. v. United States, 93 F.3d 1537, 1542-43 (Fed. Cir. 1996). Mr. Logan’s letter asserting as a matter of right the payment of money resulting from the contract termination is a nonroutine request, and therefore was not required to have been in dispute when submitted. Ellett Constr., 93 F.3d at 1542-43. When the contracting officer unequivocally rejected the monetary claim in a final decision, Mr. Logan’s timely appeal provided us with jurisdiction. See Rex Systems, Inc. v. Cohen, 224 F.3d 1367, 1372-73 (Fed. Cir. 2000).

This is unlike the termination settlement proposal discussed in Ellett Construction, which was presented for the purpose of negotiation under the Federal Acquisition Regulations’ (FAR) termination for convenience clause, not for a contracting officer’s decision under that clause. See Ellett Constr., 93 F.3d at 1543. The FAR does not apply to this contract, see Tip Top Constr., Inc. v. Donahoe, 695 F.3d 1276, 1281, n.1 (Fed. Cir. 2012), and unlike its termination for convenience clause, no separate negotiation process is required by the clause here at issue. Therefore, a cognizable claim appropriately was submitted. Although the ACO confused the situation by referencing an inapplicable termination for convenience clause, only a termination with notice clause was present in the contract. See infra.

Although we possess jurisdiction over the monetary dispute before us, Respondent confused matters by issuing a termination notice under the inaccurate description of a final decision. It then exacerbated the confusion by forwarding Appellant’s unclear notice of appeal to the Board with a misleading cover letter without explaining which “final decision” being challenged was attached to Appellant’s notice of appeal (Findings 5, 11). Of course, Mr. Logan has not helped to clarify matters (Findings 12, 14, 16). We therefore examine whether we also may address a possible challenge to the termination notice itself.

Unlike a termination for default which constitutes a government claim, requires a contracting officer’s decision, and which can be challenged under the CDA without an additional monetary claim, see Malone v. United States, 849 F.2d 1441, 1443 (Fed. Cir. 1988), a termination with notice or termination for convenience is a contract action, not a claim. The termination notice itself is not a contracting officer’s decision. Without a monetary claim submitted to the contracting officer, the Board has no jurisdiction over a challenge to a termination for convenience or termination with notice action. See Charles Mullens, ASBCA No. 56927, 11-2 BCA ¶ 34,857, 12-2 BCA ¶ 35,163; CME Group, Inc., ASBCA No. 57446, 11-2 BCA ¶ 34,792.

By describing its termination notice as a final decision when it was not, the Postal Service may have induced Mr. Logan to file an appeal. However, that would not be sufficient to confer jurisdiction. See Witherington Constr. Corp. v. General Serv. Admin., GSBCA No. 12719, 94-2 BCA ¶ 26,768. It remains unclear whether Mr. Logan intended to challenge the contract termination as well as challenge the contracting officer’s denial of his monetary claim (both of which were issued with final decision language). If he did, however, we lack jurisdiction to address it, as no CDA claim is involved.

Having concluded that an appeal challenging the termination action itself is not before us, and that we possess jurisdiction to address the denial of Mr. Logan’s monetary claim, we turn to the Postal Service’s other pending motion – to dismiss for failure to state a cause of action on which relief can be granted.

Failure to state a cause of action on which relief can be granted

Ordinarily, we would consider all factual allegations in Appellant’s complaint as true, and would resolve all reasonable inferences in his favor, as the non-movant. See Minute Man Properties, L.P., PSBCA No. 6296, 11-1 BCA ¶ 34,684. However, Mr. Logan has not submitted a complaint or anything else in support of his case (Findings 12-14, 16). Rather, the Board designated his claim letter as the complaint (Finding 13), and we resolve reasonable inferences in that document, as well as in the other documents in the record in his favor.

The Postal Service repeatedly confused termination for convenience with termination with notice (Findings 5, 7, 11). However, only a termination with notice clause was included in the contract, not a termination for convenience clause. (Findings 3, 9). The Postal Service again has engaged in the “sloppy use of critical terminology” that we criticized in Harold N. Colerick, PSBCA No. 6356, 12-1 BCA ¶ 34,907 at 171,648. Nonetheless, as in Colerick, the record is clear, and indeed Mr. Logan has not contested, that the termination with notice clause applied to this contract to the exclusion of the termination for convenience clause (Finding 3).

The termination with notice clause unmistakably allows either party to terminate without cost, provided proper notice was given (Finding 2). See Package Plus of S.W. FL Inc., PSBCA No. 3674, 95-2 BCA ¶ 27,762. While resolving all reasonable inferences in his favor, we must conclude that Mr. Logan has presented only a claim involving costs resulting from a termination for convenience – he has not presented a monetary claim seeking recovery for breach of contract.

CONCLUSION

This case is dismissed with prejudice.

Gary E. Shapiro
Administrative Judge
Vice-Chairman

I concur:

William A. Campbell
Administrative Judge
Chairman

Peter F. Pontzer
Administrative Judge
Board Member