PSBCA No. 6484, 6491, 6492


March 18, 2016

DERRICK V. GREENE v. UNITED STATES POSTAL SERVICE

PSBCA Nos. 6484, 6491, 6492

APPEARANCE FOR APPELLANT:
Derrick V. Greene

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

OPINION OF THE BOARD

Appellant, Derrick V. Greene, appeals Respondent, United States Postal Service’s terminations for default of two mail transportation contracts.  Mr. Greene also appeals the contracting officer’s partial denial of a claim for extra work.  We deny all three appeals and rule in favor of the Postal Service.

FINDINGS OF FACT

The two mail transportation contracts

  1. Mr. Greene and the Postal Service were parties to Contract No. HCR 760L2 (Contract 760L2), with a term of January 5, 2009 to June 30, 2013.  Contract 760L2 required the use of two trucks, each with a minimum payload of 11,700 pounds, to transport mail 309 days per year along a designated route with several stops.  The schedule included time to load and unload mail at the Fort Worth, Texas Processing and Distribution Center (Ft. Worth P&DC) and intermediate stops.  (6491 AF 15 at 33, 41-44; 6491 AF 14 at 27; Tr. 1 at 82-83).1  In addition to Contract 760L2’s requirement to provide two trucks, Mr. Greene was “required to have readily available sufficient stand-by equipment [including a truck] to perform extra trips, to permit vehicle maintenance, and to prevent delays in emergencies such as mechanical failures. . . .” (6491 AF 15 at 43).
  2. Contract 760L2 included two trips that left from the Ft. Worth P&DC in the morning and two trips that arrived at the Ft. Worth P&DC in the afternoon.  The schedule required one truck to start its morning trip at 4:30 A.M. and finish at 6:10 A.M., and the second truck to start its morning trip at 4:45 A.M. and finish at 5:55 A.M.  The schedule also required one truck to start its afternoon trip at 4:40 P.M. and finish at 6:20 P.M., and the other truck to start its afternoon trip at 4:50 P.M. and finish at 6:00 P.M.  (6491 AF 15 at 41-43). 
  3. On June 14, 2011, the Postal Service modified the schedule under the contract’s changes clause.  Contract 760L2’s modified schedule increased the contract’s fixed price, added another interim stop, and reduced the frequency of service from 309 to 303 days per year.  It required both trucks to begin their morning trips from the Ft. Worth P&DC at 5:00 A.M. and finish at 6:25 A.M. and 6:35 A.M. respectively.  The timing of the afternoon trip and the minimum payload of both trucks remained unchanged.  (Resp. Addl. Exh. 2 at 10, 13; Tr. 1 at 37; Tr. 2 at 87-91).
  4. Mr. Greene and the Postal Service also were parties to Contract No. HCR 76048 (Contract 76048), with a term of July 1, 2010 to June 30, 2014.  Contract 76048 required the use of one truck, plus readily available stand-by equipment, with a minimum payload of 9,000 pounds to transport mail 303 days per year.  Contract 76048’s scheduled route started from the Ft. Worth P&DC at 11:05 A.M. and finished there at 3:40 P.M.  It included time to load and unload mail at the Ft. Worth P&DC and intermediate stops.  (6492 AF 12 at 24, 30-31, 38).
  5. Contract 760L2 and Contract 76048 both identified the Administrative Official generically as the Ft. Worth P&DC (6491 AF 15 at 43; 6492 AF 12 at 37).  The transportation manager and two transportation network specialists at the Ft. Worth P&DC shared responsibility for administering the contracts (Tr. 2 at 30-31, 58).
  6. The Screening/Identification Requirements clause, B.5, of the contracts required Mr. Greene to identify and apply for a background check for all individuals who required access to postal facilities or mail, or who would serve as drivers under the contract.  Upon final clearance, the Postal Service issued a photo identification badge to the cleared employee, which had to be displayed while on Postal Service property.  (6491 AF 15 at 48-49; 6492 AF 12 at 43).  The contracts’ Denial of Access to the Mails clause, B.3(h), provided that “[t]he supplier shall deny access to the mail to any employees or personnel when required to do so by the contracting officer.”  (6491 AF 15 at 47; 6492 AF 12 at 41).
  7. The Safety Requirements clause, B.6, provided that “[t]he supplier shall conduct its operations under this contract in full compliance with (i) the United States Department of Transportation (DOT) Motor Carrier Safety Regulations, as set out in 49 C.F.R. Parts 390-397, [and] (ii) all other applicable federal laws and regulations. . . .”  (6491 AF 15 at 49; 6492 AF 12 at 44).  Paragraph g of clause B.6, entitled Hours of Service for Drivers, provided “[d]rivers will not be permitted or required to exceed the hours of “on duty” and “driving time” as specified by the Department of Transportation (DOT).”  (6491 AF 15 at 52; 6492 AF 12 at 46).
  8. The contracts’ Termination for Default and Events of Default clauses identified grounds for default.  Specifically the Termination for Default clause provided:  “The Postal Service may terminate this contract . . . for default of the supplier. . . .”  The Events of Default clause provided:
              The supplier’s right to perform this contract is subject to termination under the clause entitled Termination for Default.  The following           constitute events of default . . . :  (a) The supplier’s failure to perform service according to the terms of the contract, . . . (l) If at any           time the supplier[’s] personnel are disqualified by law or regulation from performing services under this contract, . . . (o) If the supplier           materially breaches any other requirements or clause of the contract.
    (6491 AF 15 at 70-72; 6492 AF 12 at 66, 72).
  9. The contracts’ Claims and Disputes clause required that Mr. Greene “must proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under the contract, and comply with any decision of the contracting officer.”  (6491 AF 15 at 71; 6492 AF 12 at 71).

    10. One truck performing all trips

  10. One of Mr. Greene’s two trucks broke down in May or June, 2011, and Mr. Greene did not have a readily available stand-by truck.  Mr. Greene created a modified schedule that allowed him to perform Contract 760L2 with his remaining truck, while allowing an employee to use the same truck to perform Contract 76048.  (Tr. 1 at 36, 55, 84-85, 108-09; Tr. 2 at 221-22; Tr. 3 at 51-53).  Until November, 2011, Mr. Greene’s employee, not Mr. Greene himself, performed Contract 76048 (Tr. 1 at 107-108).  Mr. Greene used the modified schedule without informing Respondent’s Administrative Officials (Tr. 2 at 123-25).
  11. In early July, 2011, a loading dock employee at the Ft. Worth P&DC informed a Postal Service transportation network specialist that Mr. Greene was using only one truck (Tr. 2 at 123-25).  The network specialist then performed a route survey by following Mr. Greene on several occasions and observing his performance under the unauthorized one-truck schedule (6484 AF 8 at 15, 17; Tr. 2 at 60, 69, 107-08, 139-40).  Based on that survey, the network specialist determined that all scheduled stops could be made with one truck if the morning trip began earlier (Tr. 2 at 85-86, 124).
  12. The revised one-truck schedule accommodated Mr. Greene, who was viewed by the postmasters along his routes as a reliable and helpful contractor, to continue to perform with the single truck available while potentially saving the Postal Service money (Tr. 2 at 45-46, 60, 124, 140).
  13. On July 7, 2011, the network specialist drafted a revised one-truck schedule and presented it to Mr. Greene (Tr. 2 at 65, 75).
  14. On August 30, 2011, the network specialist began the Postal Service’s internal process to approve the schedule change for Contract 760L2 and to amend the contract (Resp. Addl. Exh. 3 at 44; Tr. 2 at 122).
  15. The parties bilaterally amended Contract 760L2 to adopt the modified schedule effective November 5, 2011.  The contract amendment reduced the required number of trucks used to perform Contract 760L2 from two to one, lowered the annual fixed contract price, and included a lump sum deduction to account for the period between July 6, 2011 and November 5, 2011 when Mr. Greene used one truck rather than two trucks without approval.  (Resp. Addl. Exh. 3 at 26-28; Tr. 1 at 50; Tr. 2 at 98).
  16. Contract 760L2’s amended schedule provided that the single truck’s morning trip would begin at the Ft. Worth P&DC at 3:00 A.M. and finish at 6:50 A.M.  The afternoon trip would begin at 4:40 P.M. and finish at the Ft. Worth P&DC at 6:50 P.M.  The minimum required truck payload remained 11,700 pounds.  (Resp. Addl. Exh. 3 at 31; Tr. 2 at 187-88).  After Contract 760L2’s schedule change, Mr. Greene’s two contracts required the following beginning and end times:
    • 3:00 A.M. – 6:50 A.M. (Contract 760L2, morning trip),
    • 11:05 A.M. – 3:40 P.M. (Contract 76048, mid-day trip), and
    • 4:40 P.M. – 6:50 P.M. (Contract 760L2, afternoon trip).
    (Resp. Addl. Exh. 3 at 31; 6492 AF 12 at 30; Tr. 2 at 187-88).

    17. Transportation of empty mail containers and equipment

  17. Although Mr. Greene’s contracts did not require transferring empty mail containers and equipment, he regularly sorted and transported such equipment along his routes, and left it at the Ft. Worth P&DC.  After Mr. Greene began using a single truck however, he had insufficient room for the mail and the empty mail containers and equipment.  Moreover, the extra time it took Mr. Greene to handle the empty mail containers and equipment prevented timely compliance with the contract schedule.  (Tr. 1 at 44-45, 48, 59-60, 63-66; Tr. 2 at 139-40; Resp. Addl. Exh. 14 at 78).
  18. During his route survey (Finding 11), the network specialist observed Mr. Greene’s transfers of empty mail containers and equipment and told him stop doing it because the Postal Service planned to have postal employees move the empty mail containers and equipment (Tr. 1 at 45; Tr. 2 at 139-40, 208; Resp. Addl. Exh. 14 at 78).
  19. Nonetheless, Mr. Greene continued to sort and transport empty mail containers and equipment until November 2011 by adding an additional afternoon trip to the Ft. Worth P&DC.  Although helpful to the postmasters on his route, neither the contracting officer nor the Fort Worth P&DC Administrative Officials authorized the extra trip.  Further, even without that trip, Mr. Greene was required to be at the Ft. Worth P&DC for the service on Contract 76048.  It was Mr. Greene’s decision to perform the extra trip to assist the postmasters along his route and to make his last daily trip easier.  (Tr. 1 at 64, 90, 93; Tr. 2 at 126, 208-09, 213-14, 218).

    20. One driver performing all trips

  20. The DOT Motor Carrier Safety Regulations (DOT safety rules) limit the hours drivers can operate commercial vehicles, defined (in part) as those with a gross weight exceeding 10,001 pounds.  One limitation requires that commercial drivers must have ten consecutive off-duty hours each day.  (Resp. Addl. Exh. 19; Tr. 2 at 186; see also 49 C.F.R. § 395 (2011)).
  21. The single truck Mr. Greene was using exclusively after May or June 2011 qualified as a commercial vehicle subject to the DOT safety rules because its gross weight exceeded 10,001 pounds as required by Contract 760L2 (6491 AF 15 at 44; 6492 AF 12 at 30; Resp. Addl. Exh. 19; 6491 AF 4; Tr. 2 at 197-99).
  22. The time between the end of Contract 760L2’s afternoon trip at 6:50 P.M. and the beginning of its morning trip at 3:00 A.M. the next day provided only eight hours and ten minutes of consecutive off-duty time (not ten hours).  The period between the end of Contract 760L2’s morning trip at 6:50 A.M. and the beginning of the afternoon trip at 4:40 P.M. provided a maximum of nine hours and fifty minutes of consecutive off-duty time, without regard to the intervening trip for Contract 76048.  (Resp. Addl. Exh. 3 at 31).
  23. Prior to November 8, 2011, Mr. Greene used additional drivers to help him perform the two contracts.  After November 8, 2011, Mr. Greene performed the two contracts by himself.  To do so, Mr. Greene drove from the location where Contract 760L2’s morning trip ended at 6:50 A.M. to the Ft. Worth P&DC where Contract 76048 began at 11:05 A.M.  He also drove from the Ft. Worth P&DC where Contract 76048 ended at 3:40 P.M. to another location where Contract 760L2’s afternoon trip began at 4:40 P.M.  (Tr. 1 at 108, 112-13; Tr. 2 at 128-29, 186-90; Tr. 3 at 48-49; 6491 AF 9).

    24. Performance issues

  24. Between July 5, 2011 and August 31, 2011, the Postal Service issued Mr. Greene thirty-seven Contract Route Irregularity Reports, Postal Service Form 5500 (Irregularity Reports), to document his use of one truck rather than two trucks to perform Contract 760L2 (Resp. Addl. Exh. 6 at 49-51; Tr. 2 at 59, 93-95, 144-45).  Because the amendment modifying Contract 760L2’s schedule to one truck was not effective until November 5, 2011, the Postal Service kept these Irregularity Reports on Mr. Greene’s performance record (Tr. 2 at 136-38; Resp. Addl. Exh. 13).
  25. For Contract 760L2, the Postal Service also issued Mr. Greene twenty-two Irregularity Reports for significant late arrivals between November 16, 2011, and April 25, 2012, and its tracking system recorded many more late arrivals for which Irregularity Reports were not issued.  For Contract 76048, the Postal Service issued Mr. Greene seventeen Irregularity Reports for significantly late arrivals between November 16, 2011 and April 25, 2012.  (Resp. Addl. Exh. 6 at 51-53; Resp. Addl. Exh. 7 at 56-60; Resp. Addl. Exh. 23; Resp. Addl. Exh. 24).  The Postal Service did not issue Mr. Greene Irregularity Reports for lateness caused by a line of vehicles waiting to enter the Ft. Worth P&DC (Tr. 2 at 141-42).  Although the Irregularity Reports allowed Mr. Greene to respond, he did not do so (Tr. 2 at 156; Resp. Addl. Exh. 23; Resp. Addl. Exh. 24).
  26. Beginning in February 2012, the Ft. Worth P&DC network specialists experienced communication problems with Mr. Greene.  They approached Mr. Greene several times at the loading dock to ask about his late arrivals or whether there were any problems that needed their attention.  Mr. Greene typically refused to respond, or even acknowledge them, and he simply walked away silently.  (Tr. 2 at 33-34, 47-49, 103-05, 118, 140-41, 151-52; Resp. Addl. Exh. 4; Resp. Addl. Exh. 5).
  27. On March 30, 2012, a network specialist requested a conference with Mr. Greene on April 10, 2012, to discuss late performance on both contracts (Resp. Addl. Exh. 6 at 1; Resp. Addl. Exh. 7 at 1; Tr. 2 at 108-09).  Mr. Greene told the network specialist that he could not attend, and did not provide an alternate date.  Mr. Greene also contended that the conference was unnecessary because the Irregularity Reports in his file were due to his use of one truck rather than two, a requirement that had been changed by the intervening contract amendment.  The network specialist told Mr. Greene that this issue would be addressed at the conference, which he rescheduled for April 17, 2012.  Mr. Greene responded that he would not be able to attend at that time, and again did not propose an alternate date.  The network specialist warned Mr. Greene that the conference would be held without him even if he did not attend.  (Tr. 2 at 42-43, 44-45, 111-16, 136-38; 6484 AF 9; Resp. Addl. Exh. 9; Resp. Addl. Exh. 11 at 1; Resp. Addl. Exh. 12 at 1; Resp. Addl. Exh. 13; 6484 AF 8 at 17, 18). 
  28. On April 17, 2012, the network specialist held the rescheduled conference with another network specialist and manager.  Mr. Greene did not attend.  The two network specialists and their manager reviewed Mr. Greene’s performance and forwarded the contract file to the contracting officer.  (Resp. Addl. Exh. 14; Tr. 2 at 44-46, 116-17).

    29. Denial of access to postal facilities

  29. On the evening of April 24, 2012, Mr. Greene arrived late at the Ft. Worth P&DC and, as he had done before, refused to explain his lateness to the network specialist.  The network specialist reported the incident to the contracting officer on April 25, 2012, which was the first notice the contracting officer had received about Mr. Greene’s refusal to communicate with dock employees.  (Tr. 2 at 49-52, 152-53; Resp. Addl. Exh. 17 at 85). 
  30. In an April 25, 2012 letter, the contracting officer denied Mr. Greene  access to postal facilities for Contract 760L2 effective that day.  This action was based on Mr. Greene’s repeated refusal to respond to questions at the Ft. Worth P&DC dock, his lack of response to the Irregularity Reports, and his failure to attend the scheduled performance review conference.  Considering the high-level of activity on the loading dock, the contracting officer determined that Mr. Greene’s behavior disrupted operations and potentially was unsafe.  The contracting officer’s letter concluded:
              Despite the temporary denial of access to the mail, it is still your responsibility to ensure that service is provided on this contract.            Specifically, you must hire a driver to perform service on this contract; your failure to operate may result in other action, including a           contract termination for default.
    (6491 AF 13; Tr. 2 at 177-80).
  31. That evening - April 25, 2012 - Mr. Greene arrived at the Ft. Worth P&DC dock.  The transportation manager informed Mr. Greene that he was being denied access and presented him with the contracting officer’s letter.  The manager asked Mr. Greene to surrender his security badge, which was needed to access the facility, but Mr. Greene had misplaced it.  Mr. Greene had not informed the Postal Service that his security badge was missing.  Instead, for weeks he had been following other trucks to gain access through the security gate.  Mr. Greene complied with the transportation manager’s instructions to leave the facility.  (Tr. 2 at 29-30, 52-54, 71-73; 6491 AF 12; 6492 AF 10).  Thereafter, Mr. Greene did not perform either contract again, nor did he hire another driver to perform in his place (Tr. 2 at 54-55, 191; Resp. Addl. Exh. 23 at 166; Resp. Addl. Exh. 24 at 185).
  32. The next day - April 26, 2012 - the contracting officer issued Mr. Greene cure notices for both contracts.  The cure notices highlighted Mr. Greene’s failure to perform service that day, his refusal to communicate at the loading dock, his missing security badge, and his recurring late arrivals.  The contracting officer informed Mr. Greene that he considered these ongoing deficiencies to be nonperformance of the contract, and that termination could result if not cured.  The contracting officer told Mr. Greene that he “must resume and restore satisfactory service . . . commencing on April 30, 2012 maintaining satisfactory service for the duration of the contractual relationship.”  (6491 AF Tab 12; 6492 AF Tab 10; Tr. 2 at 182-83).
  33. Mr. Greene believed that the quoted language meant that he personally must return to the Ft. Worth P&DC on April 30, 2012, to resume service.  He therefore appeared at the Ft. Worth P&DC dock that day.  When Mr. Greene arrived in his truck prepared to perform the contract, two law enforcement officers escorted him off postal premises due to the contracting officer’s ongoing denial of access.  Mr. Greene was profoundly offended by this action, which he felt was embarrassing, defamatory, and contrary to the contracting officer’s direction.  (Tr. 1 at 77; Tr. 2 at 55-57, 184; 6491 AF 10; 6492 AF 7).
  34. On April 30, 2012, Mr. Greene wrote to the contracting officer, denying that the incident on April 24 involving failure to communicate at the dock had occurred.  He also argued that the Irregularity Reports describing his late performance were caused by his truck not being scanned timely on arrival.  (6491 AF 11).
  35. On May 1, 2012, the contracting officer issued Mr. Greene a show cause notice requiring him to show cause why Contract 760L2 should not be terminated for default due to violations of the DOT safety rules since April 10, 2012.  The contracting officer also cited Mr. Greene’s failure to provide any service under Contract 760L2 since April 26, 2012.  (6491 AF 9; Tr. 2 at 185).
  36. On May 8, 2012, Mr. Greene responded to the contracting officer’s show cause notice.  He repeated arguments from his April 30 letter and disputed the basis for his denial of access.  He also denied violating the DOT safety rules.  (6491 AF 8; Tr. 2 at 190-91).

    37. Default terminations and monetary claim

  37. On July 30, 2012, Mr. Greene sent a letter to the contracting officer seeking $20,977.96 for extra service performed from April 23 to November 4, 2011, and challenging the denial of access.  He denied the charge of failure to communicate with postal officials at the Ft. Worth P&DC dock.  (6492 AF 7).
  38. On August 10, 2012, the contracting officer issued another cure notice to Mr. Greene for Contract 760L2.  The cure notice stated that Mr. Greene had not performed since April 26, 2012, and reiterated the contracting officer’s position that Mr. Greene had been violating the DOT safety rules.  The cure notice concluded that the contract was in default.  However, the contracting officer was providing a “final opportunity to resume service. . . .”  To avoid termination, the contracting officer required Mr. Greene, by August 31, 2012, to provide a plan to restore service that would comply with the DOT safety rules.  The contracting officer noted that if Mr. Greene’s plan of operation involved hiring new drivers, these drivers must be screened before performing.  (6491 AF 6).
  39. On August 15, 2012, the contracting officer sent Mr. Greene a letter which restored his access to postal facilities (6491 AF Tab 5).  The contracting officer did so because considerable time had gone by since the communication problems at the Ft. Worth P&DC dock, and he hoped that Mr. Greene would perform the contract if allowed access (Tr. 2 at 193-94).
  40. Mr. Greene responded by email on September 1, 2012.  Rather than present a plan to resume service, he again contested the applicability of the DOT safety rules.  Without identifying a specific plan, Mr. Greene noted that “[two] weeks will be needed to get trucks ready, survey the route the way it is presently operated, and secure funds to make it to the pay period.  The [two] weeks will start upon the day you desire; for example from today I could start on September 15, 2012.”  (Resp. Addl. Exh. 19 at 88-89).
  41. The contracting officer replied by email on September 4, 2012 (the next business day) explaining why the DOT safety rules applied, and that all the trips could not be performed with a single driver.  The contracting officer concluded
              I need you to give me the names of the drivers that you intend to use to operate service on HCR 760L2 and 76048 before I can agree           to allow you to resume service.  Once you give me the names of the drivers - we can finalize a date for you to resume.  Please give           me the names of your proposed drivers by close-of-business Friday September 7, 2012.  
    (Resp. Addl. Exh. 19 at 88 (underlining in original)).  On September 17, 2012, the contracting officer sent another email to Mr. Greene in which he noted that Mr. Greene had not responded regarding his preparations to resume service, and that he must do so by September 19.  (6491 AF 4 at 7).
  42. Mr. Greene and the contracting officer met in person on November 9, 2012.  The contracting officer attempted to convince Mr. Greene to resume service.  Mr. Greene again did not respond with a resumption plan and told the contracting officer that he would not resume service until what he felt was unfair treatment had been resolved.  Upon questioning by the contracting officer though, Mr. Greene did not provide details of what he wanted.  (6491 AF 3; Tr. 2 197-200).
  43. In response to Mr. Greene’s July 30, 2012 claim for $20,977.96, the contracting officer asked for specific information regarding the extra trips and who authorized them.  Mr. Greene declined to provide any information because he asserted that the contracting officer already should know those details.  (Tr. 1 at 104; Tr. 2 at 167, 206-07, 215, 220-21; Resp. Addl. Exh. 20).
  44. The contracting officer then investigated Mr. Greene’s monetary claim, but he was unable to identify a postal employee who had asked Mr. Greene to perform extra service.  Nonetheless, the contracting officer concluded that Mr. Greene had performed extra trips between April and November 2011.2  The contracting officer decided to pay Mr. Greene for the extra trips.  However, the contracting officer decided not to pay Mr. Greene for an extra trip to the Ft. Worth P&DC to transport empty mail containers and equipment because Mr. Greene was required to be present at the Ft. Worth P&DC anyway to perform Contract 76048 (the mid-day trip).  (Tr. 2 at 130, 133, 167, 207-10, 213-15, 218; Tr. 3 at 74-75; 6484 AF 5). 
  45. On September 27, 2012, the contracting officer issued a final decision awarding Mr. Greene $16,066.58 of the $20,977.96 claimed for additional services under Contract 760L2 from April to November 2011.  The decision denied any recovery for unscheduled trips performed to move empty mail containers and equipment from the last stop of the morning trip under that contract to the Ft. Worth P&DC, which was the starting point under Contract 76048.  (6484 AF 4; 6484 AF 5; Tr. 1 at 31-32).
  46. On November 27, 2012, the contracting officer issued final decisions terminating Contract 760L2 and Contract 76048 for default (6491 AF Tab 3; 6492 AF 3).
  47. On December 22, 2012, Mr. Greene appealed the contracting officer’s final decision involving his monetary claim, which the Board docketed as PSBCA No. 6484.  Mr. Greene seeks $4,911.38, which is the difference between the $20,977.96 claimed and $16,066.58 granted by the contracting officer.  (6484 AF 11). 
  48. On February 22, 2013, Mr. Greene appealed both default termination decisions, which the Board docketed as PSBCA Nos. 6491 and 6492 (6491 AF 2; 6492 AF 2). 

    49. DECISION

    Mr. Greene’s Monetary Claim – PSBCA No. 6484

    Mr. Greene filed a claim seeking $20,977.96 for extra service under Contract 760L2, of which the contracting officer granted $16,066.58 (Findings 37, 44, 45).  The Postal Service does not contest entitlement to the portion of the claim which the contracting officer granted, and which, therefore, is not at issue in this case.  As to the remaining $4,911.38 claim (Finding 45), Mr. Greene, as the party seeking affirmative recovery, bears the burden of proof.  See Erol A. Guvenoz, PSBCA No. 5150, 06-2 BCA ¶ 33,423, recon. den., 08-2 BCA ¶ 33,960.

    Mr. Greene’s claim seeks $4,911.38 for an unscheduled trip he performed daily from April 23 to November 4, 2011, between the last stop of the morning trip and the Ft. Worth P&DC to transport empty mail containers and equipment (Findings 19, 44, 45).  The Postal Service did not direct Mr. Greene to perform that trip, and it had a plan to move that empty equipment using its own employees (Findings 18-19, 44).  The Postal Service is not required to pay for any extra-contractual costs caused solely by Mr. Greene’s own decision to perform for his own purposes (Finding 19) and without authorized direction to do so.  See Paoli Plaza Investment Corp., PSBCA Nos. 3711, 4037, 98-1 BCA ¶ 29,445, recon. den., 98-1 BCA ¶ 29,686. Accordingly, Mr. Greene has failed to satisfy his burden of proving entitlement to the remaining portion of his claim.

    The Terminations for Default – PSBCA Nos. 6491 and 6492

    The Postal Service bears the burden of proving that its decision to terminate these contracts for default was justified.  See Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 765 (Fed. Cir. 1987).  If it does so, the burden shifts to Mr. Greene to show an excusable cause for his defaults or to show that the contracting officer abused his discretion.  See JM Carranza Trucking Co. v. United States Postal Service, PSBCA No. 6354, 14-1 BCA ¶ 35,776.

    The Postal Service presents five arguments in support of its default termination decisions.  Among these, it argues that Mr. Greene’s failure to perform any service on either contract after April 25, 2012, justifies the November 27, 2012 default terminations.  Because we uphold the default terminations on this ground, we do not address the Postal Service’s other arguments, or Mr. Greene’s defenses against those arguments.

    There is no dispute that Mr. Greene did not perform any service on either contract between April 26 and November 27, 2012, the date on which the contracting officer issued termination for default decisions (Findings 31, 46).  The complete failure to perform constitutes the most fundamental and material of contract breaches justifying default terminations.  See, e.g., Hubbard Trucking, Inc., PSBCA No. 3701,
    04-2 BCA ¶ 32,667, recon. den., 97-1 BCA ¶ 28,813.3

    Mr. Greene contends, however, that his nonperformance should be excused because the contracting officer, who was aware that he was performing both contracts himself, made it impossible for him to perform when he denied Mr. Greene access to postal facilities after April 25, 2012 (Finding 30).  Mr. Greene is adamant that the underlying denial of access was improper. 

    The Postal Service argues both that the denial of access was appropriate and that the defaults must be upheld regardless of whether the denial was appropriate.  In the latter regard, the Postal Service contends that we should uphold the default terminations because Mr. Greene was required to use substitute employees when he personally was unable to perform. 

    We have examined this issue many times.  In Lynn Susan Mancini, PSBCA No. 4129, 99-2 BCA ¶ 30,577, recon. den., 00-2 BCA ¶ 31,078, we upheld a default termination where a contractor who was driving the route herself could not perform due to an on-the-job injury.  We found that she remained contractually obligated to perform through the use of substitute drivers even if the contracting officer’s subsequent request for medical documentation allowing her to return was unreasonable.  We concluded that the contractor should have complied with that request, or hired replacement drivers and filed a claim if her costs increased as a result.

    In Jean E. Smith, PSBCA No. 5360, 10-2 BCA ¶ 34,546, the contractor refused to wear a required security badge while in the post office, which led to a workplace confrontation.  The contractor was arrested when she failed to cooperate with police investigating that confrontation, and a court ordered her not to return to the post office while the charges were pending.  Despite her inability to perform the contract personally as a result of that court order, and her professed inability to find a suitable substitute, we upheld a default termination, concluding that the contractor remained required to perform.  See also Michelle R. P’pool, PSBCA No. 5294, 08-1 BCA ¶ 33,824 (nonperformance not excused where denial of access and failure to have employees screened for security purposes were found to be the fault of both parties); Andrew M. Johnson, PSBCA Nos. 5175, et al., 07-1 BCA ¶ 33,464, recon. den., 07-1 BCA ¶ 33,582 (default termination upheld where contractor was denied access due to workplace confrontation because he was required to continue to perform with replacement drivers); Benjamin Mullins, PSBCA Nos. 5136, 5173, 05-1 BCA ¶ 32,918 (regardless of merits of denial of access based on workplace confrontation, contractor remained obligated to perform, and performance was not impossible because contractor could have used hired drivers).  These decisions lead to us to conclude that after Mr. Greene became incapable of personally performing due to denied access, he remained contractually obligated to perform using hired drivers. 

    However, Mr. Greene contends that the underlying denial of access was unreasonable and was intended to make it impossible for him to perform.  In Michelle P’pool, 08-1 BCA ¶ 33,824, we observed that nonperformance could be excused if the Postal Service breached its implied duty to cooperate and not hinder performance by taking unreasonable actions to deny access to the mail which prevented or substantially interfered with performance.  See also Samson J. Hypolite, PSBCA No. 5266, 06-2 BCA ¶ 33,337, recon. den., 07-1 BCA ¶ 33,468. 

    The implied covenant of good faith and fair dealing obligates both parties not to interfere with each other’s contract performance so as to destroy the reasonable expectations of the other party regarding the fruits of the contract.  See Metcalf Constr. Co. v. United States, 742 F.3d 984, 991 (Fed. Cir. 2014).  That duty includes the Postal Service’s duty to cooperate with Mr. Greene and not unreasonably hinder his performance.  See Temple Contract Station, LC, PSBCA No. 6430, 14-1 BCA ¶ 35,669.

    The contracting officer expressed significant concern that Mr. Greene’s lack of communication on the loading dock was potentially dangerous, and denied Mr. Greene access as a result (Finding 30).  At that point, the contracts still required Mr. Greene to perform even though he was denied access (Findings 6, 9).  Mr. Greene previously had used hired drivers to perform the contracts (Finding 23).  Had he done so again, his contracts would not have been defaulted.  Mr. Greene then could have claimed additional costs if the contracting officer’s denial of access was inappropriate.  See, e.g., Lynn Mancini, 99-2 BCA ¶ 30,557.  Rather than do so, Mr. Greene continued to argue with the contracting officer about the denial of access and the applicability of the DOT safety rules (Findings 34, 36, 40-42).

    A decision to terminate a contract for default is a discretionary act which we review for abuse of discretion by examining evidence of bad faith, whether the contracting officer had a reasonable contract-based reason for his decision, the amount of discretion given to the contracting officer, and whether an applicable statute or regulation was violated.  McDonnell Douglas Corp. v. United States, 182 F.3d 1319, 1326 (Fed. Cir. 1999).  We conclude that the contracting officer acted reasonably in his termination actions.  He provided several opportunities for Mr. Greene to present a performance plan, pointing out that additional drivers should be used to ensure compliance with the DOT safety rules, and even eventually restored access to Mr. Greene (Findings 30, 32, 35, 38-39, 41-42).  Indeed, many months elapsed between Mr. Greene last having performed and the contracting officer’s final decision to terminate the contracts for default (Findings 31, 46).  Of that time, Mr. Greene was allowed three months after the contracting officer restored his access, and yet he still did not perform (Findings 39, 46).

    To be sure, Mr. Greene was extremely upset by Postal Service actions he believed were unfair, particularly regarding the misunderstanding on April 30, 2012, when he returned to the Ft. Worth P&DC (Findings 33, 42).  Mr. Greene interpreted the contracting officer’s April 26, 2012 instruction in a cure notice letter that he “must resume and restore satisfactory service . . . commencing on April 30, 2012” to mean that he had to appear personally at the Ft. Worth P&DC on April 30 to resume performing the contracts.  The contracting officer had denied Mr. Greene access to postal facilities the previous day, and he intended the April 26, 2012 cure notice to require, as he had explained before to Mr. Greene, that he present a viable plan to restore service by April 30 using substitute drivers.  While Mr. Greene’s interpretation of the contracting officer’s direction and the resulting incident at the Ft. Worth P&DC certainly were unfortunate, they did not provide an excuse for Mr. Greene’s subsequent failure to perform his contractual obligations.

    Nonetheless, on September 1, 2012, Mr. Greene told the contracting officer that he could be ready to perform two weeks from a date the contracting officer could identify.  However, in the same communication, Mr. Greene continued to challenge application of the DOT safety rules and suggested that he intended to perform the contracts alone, something that the contracting officer concluded would violate the DOT safety rules.  (Findings 40-41).  The contracting officer reasonably responded by requiring Mr. Greene to identify his intended drivers.  He did not do so.  (Findings 41-42).  The contracting officer then waited another two months to terminate the contracts.  In the intervening period, he attempted to convince Mr. Greene to resume service.  We view the contracting officer’s actions as having been reasonable.  (Findings 42, 46).

    We see no evidence of bad faith; indeed, the Postal Service approved Mr. Greene’s one-truck schedule allowing him to continue to perform (Findings 10-14).  Rather than terminating the contracts, the contracting officer repeatedly tried to persuade Mr. Greene to perform.  The contracting officer credibly testified that he sought to avoid default terminations if at all possible.  (Findings 35, 38, 39, 41-42).  Further, the contracting officer’s allowance of a substantial portion of Mr. Greene’s monetary claim despite his failure to cooperate to provide supporting information and the contracting officer’s belief that the money was not owed, support our conclusion that the contracting officer acted reasonably throughout this dispute, not in bad faith (Findings 43-45).  The remainder of the elements we consider in an abuse of discretion analysis (reasonable, contract-based reason for the action, amount of discretion given to the contracting officer, and violation of a statute or regulation) similarly favor the Postal Service. 

    CONCLUSION AND ORDER

    We deny PSBCA No. 6484 – Mr. Greene’s appeal of the portion of his monetary claim that the contracting officer denied. 
    We deny PSBCA Nos. 6491 and 6492 – Mr. Greene’s appeals of the terminations for default of both contracts.

    Gary E. Shapiro
    Administrative Judge
    Chairman

    I concur:

    Peter F. Pontzer
    Administrative Judge
    Board Member

    I concur:

    Alan R. Caramella
    Administrative Judge
    Board Member

    1 The Board conducted a three-day hearing in Dallas, Texas.  The transcript for April 7, 2015 is referenced as Tr. 1, April 8, 2015 is referenced as Tr. 2, and April 9, 2015 is referenced as Tr. 3.

    2 The details of these extra trips are not clear in the record.  However, on appeal Respondent does not contest the portion of its final decision granting the claim.

    3 The official citation identifies the decision as 04-2 BCA ¶ 32,667, despite the decision having been issued on November 18, 1996.  The Board issued the reconsideration decision on February 27, 1997.